TSX drifts ahead of OPEC meeting

There was little movement across Toronto and New York stock markets Wednesday, as traders wait to see what emerges from this week’s meeting of the Organization of Petroleum Exporting Countries (OPEC).

The S&P/TSX composite index was in negative territory for a third straight day, but down a mere 2.24 points at 14,063.54.

Wall Street indexes were up slightly in the face of mixed economic reports out of the United States and China.

The Dow Jones industrial average added 2.47 points to 17,789.67, while the broader S&P 500 gained 2.37 points to 2,099.33.

The Nasdaq edged up 4.20 points to 4,952.25.

Oil ministers from the 13 members of OPEC are meeting in Vienna on Thursday to discuss whether a production cap is needed to prop up still weak crude oil prices. Total daily production from OPEC is now at 32 million barrels a day.

“I don’t think they will come to any type of agreement in terms of production caps. They’re all defending market share,” said Kevin Headland, senior investment strategist at Manulife Investments.

“It seems like prices are starting to work in favour of OPEC members. I don’t think there is any reason for them to take measures . . . to cap production at this point,” he explained.

Crude prices have been steadily rising in recent weeks to their current level of about $50 (U.S.) a barrel, but are still a far cry from the $100 level seen just two years ago.

Headland said oil will continue to stay volatile until the markets can find a balance between supply and demand.

On Wednesday, the July contract for benchmark North American crude pulled back nine cents to $49.01a barrel. However, the Canadian dollar, which usually follows oil prices, was up 0.25 of a U.S. cent at 76.53 cents.

In other commodities, the July contract for natural gas posted another strong advance, up nine cents at $2.38 per mmBTU after having shot up 12 cents on Tuesday.

August gold bullion was down $2.80 at $1,214.70 a troy ounce and July copper lost two cents to $2.07 a pound.

In economic news, the Institute for Supply Management said its manufacturing index expanded for the third straight month in May, rising to 51.3 from 50.8 in April. Anything above 50 signals growth.

Meanwhile, the U.S. Commerce Department reported construction spending dropped 1.8 per cent in April after a 1.5-per-cent gain in March for the biggest monthly decline since a 4.1-per-cent plunge in January 2011.

In China, two surveys released Wednesday showed that factory activity remains feeble.