Price of oil rises after three-day losing streak; TSX inches higher

TORONTO – The price of oil recouped some of its value Thursday after three consecutive days of losses, while the Toronto Stock Exchange inched higher.

The December crude contract gained 54 cents to US$49.72 per barrel. This was an improvement from Wednesday’s close which saw its three-day losses total US$1.67, after investor sentiment soured following news that Iraq sought an exemption from an anticipated OPEC deal to cut oil production.

Allan Small, a senior investment adviser at Holliswealth, said oil’s gain Thursday can be explained by the regular ups and downs in the price of the commodity.

He said he would be surprised to see oil move significantly higher than the roughly US$49.00 a barrel its been priced at recently, noting that production ramps up when the price reaches or surpasses the US$50 a barrel mark.

“And, all of a sudden, you have a drop in price,” he said.

Strength in the energy sector, which gained nearly two per cent, helped lift the S&P/TSX composite index by a modest 26.19 points to 14,833.75.

Interest rates also helped move markets Thursday, said Small, with yields on 10-year bonds in Canada and America on the rise.

That spurred on the financial sector, he said, which was among the best performing sectors of the day.

Gold was another commodity that saw a small spike, with the December gold contract rising US$2.90 to US$1,269.50 an ounce.

Small said that isn’t a significant increase and he expects the price of gold to drop as the U.S. Federal Reserve will likely hike interest rates in December.

The Canadian dollar dropped 0.03 of a U.S. cent to 74.70 cents US.

South of the border, markets did not fare as well. In New York, the Dow Jones industrial average fell 29.65 points at 18,169.68, while the broader S&P 500 shed 6.39 points at 2,133.04. The Nasdaq composite lost 34.30 points to 5,215.97.

The next two months, though, are historically the best time of the year for market performance, said Small, with American Thanksgiving and Christmas coming up.

“So, a lot of positives on the horizon,” he said, cautioning that it’s still important to be mindful of the upcoming American central bank interest rate decision, the Nov. 8 U.S. election and the Nov. 30 OPEC meeting — all which could “spoil the party a little bit.”

Elsewhere in commodities, December natural gas gained 3.2 cents to about US$3.07 per mmBTU and December copper increased by 1.8 cents to US$2.16 a pound.

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