Toronto stock market faces weaker oil prices

A drop in commodity prices dragged the Toronto stock market lower on Friday as Wall Street finished early for the U.S. Thanksgiving holiday.

The S&P/TSX composite index closed down 56.95 points at 13,368.24 — a decline of half a per cent on the week — with mining and energy issues leading the way lower.

Energy shares fell 1.44 per cent as the price of oil slid on the heels of weak Chinese economic data, which resurrected oversupply concerns.

The January contract for benchmark crude oil was down $1.33 to US$41.71 a barrel while January natural gas dropped nine cents to US$2.21 per mmBtu.

Next week, OPEC will convene for a meeting that could see the oil cartel rein in production or keep it at current levels. The decision could determine the direction of oil prices in the coming months.

Analysts widely anticipate oil prices will remain under pressure well into next year.

“It’s not looking great for the next year because you still are seeing (energy) producers in survival mode and they are going to maximize production,’’ said Cavan Yie, equity analyst of investments at Manulife Asset Management.

“You are going to have to see oil low for a while before you see these bankruptcies happen and supplies permanently run off.’’