TSX sags again on weak oil prices

An oversupply in crude inventories pulled down oil prices on Friday as the Toronto stock market finished lower.

The S&P/TSX index was down 51.76 points at 13,075.42, its lowest level since Sept. 29, as several key sectors weakened.

The financials index slid 1.2 per cent, with all of the major banks lower, while the metals and mining sector moved back 1.5 per cent.

On commodity markets, the December crude contract was down $1.01 (U.S.) at $40.74 a barrel.

The fall came after the International Energy Agency said that commercial inventories reached almost three billion barrels at the end of September, which is a record.

Oil prices have been driven down recently by weakening demand that is running against a growing supply level.

Adding extra pressure to energy prices was fresh data from oilfield services company Baker Hughes that showed that U.S. oil rigs rose by two to 574 for the first time in 11 weeks.

Macan Nia, director of the capital markets and strategy team at Manulife Asset Management, said that he expects weak oil prices to persist.

“We’re in the camp where we think we’re lower for longer,” he said.

“A couple weeks ago we saw oil in the mid 40s, then up to the high 40s, and it as quickly retracted to where we are today.”

In other commodities, the January contract for natural gas was up eight cents at $2.53 per mmBtu while the December gold contract slipped 10 cents to $1,080.90 an ounce.

South of the border, a week of dismal figures for the retail industry soured the spirit going into the crucial holiday season.

Department store operator Nordstrom became the latest major retailer to post disappointing results, showing both a slowdown in sales and traffic in the United States.

Its shares dropped 15 per cent to $53.96. The Dow Jones was down 202.83 points at17,245.24, while the broader S&P 500 index declined 22.93 points to 2,023.04 and Nasdaq lost 77.20 points to 4,927.88.

The Canadian dollar was down 0.20 of a cent at 75.09 cents U.S.

Nia said North American stock markets will likely continue to face pressure in the coming weeks, as the ripple effects of last week’s U.S. jobs report have left investors expecting the Federal Reserve to begin raising its benchmark interest rate in December.

“It’s just continued volatility going into the end of the year that’s only been increased by the recent jobs number.”

In Canada, Montreal-based Aimia Inc. shares briefly hit a low of $9.39 (Canadian) before rising slightly higher to close 14 per cent lower at $9.65 on the TSX, after the company announced job cuts.