Toronto stock market down slightly on lower oil price as U.S. markets closed

TORONTO Canada’s main stock index closed slightly lower on a very quiet day of trading Thursday even though the key energy sector rose despite a slide in the price of oil.

The S&P/TSX composite lost 3.44 points to 15,091.58 with just 83.3 million shares traded.

The January crude contract was down US78 cents in international trading at US$53.85 per barrel and the December natural gas contract was down 21.6 cents at US$4.23 per mmBTU.

The decrease in the price of West Texas Intermediate followed a report by Saudi Arabia suggesting production had hit record levels, says Candice Bangsund, portfolio manager for Fiera Capital.

“So that’s obviously weighing on crude prices this afternoon and further reinforcing that market concern about the re-emergence of a supply glut in the crude market, in addition to yesterday’s weekly rise in crude inventories,” she said.

“Oil’s been having a pretty tough time, though we saw a little bit of a recovery a couple of days ago.”

A clearer picture about where prices will settle for the rest of the year will emerge when OPEC meets Dec. 6 to decide on production levels.

Bangsund said the market didn’t react to the federal government’s fall economic update, which was largely in line with expectations.

“If anything, it probably reinforces that the Bank of Canada will continue on its path towards policy normalization,” she said, adding that the accelerated write-down of all capital costs should help to close the competitiveness gap with the U.S.

“Our hope is that this boosts business spending and business spending intentions and accordingly Canadian growth. So that should keep the Bank of Canada firmly only its path to higher interest rates in the coming year.”