Toronto stock index dips as oil falls below US$50 a barrel amid OPEC deal Toronto stock index dips as oil falls below US$50 a barrel amid OPEC dealFinancial market highlights on Thursday: S&P/TSX 15,410.73, down 8.76 pointsFinancial market highlights on Thursday: S&P/TSX 15,410.73, down 8.76 pointsICE Futures Canada Thursday: Canola futures prices lower, barley unchangedICE Futures Canada Thursday: Canola futures prices lower, barley unchanged

MARKETS CLOSE

TORONTO — The price of oil fell below the US$50 mark Thursday as investors expressed disappointment over OPEC’s decision to only extend production cuts by another nine months.

The July crude contract plunged $2.46 at US$48.90 per barrel, marking its biggest decline in more than two months.

Oil prices have rallied in the last several weeks on expectations of an extension, but some had been hoping for deeper and longer cuts from the 14-member OPEC cartel and 10 other countries led by Russia.

The new agreement means that the reductions of 1.8 million barrels a day agreed on last November will stay in place until March 2018.

Chief market analyst Colin Cieszynski of CMC Markets Canada says investors had already priced in the likelihood that there would be an extension for at least six months, but others had a “pie in the sky” notion that the group might agree to a 12-month extension.

When that didn’t materialize Thursday, it resulted in some profit taking with the price of oil, he said.

OPEC and non-OPEC members are facing stiff competition from U.S. shale producers, who have returned to the market since crude prices have risen due to the cuts. Many are determined to resume operations if crude prices go even higher.

“That’s why we didn’t see them cut any further really, because if they cut more it would just get replaced by U.S. production and they don’t want that,” Cieszynski said.

A price of US$50 a barrel is still less than half the commodity’s level from early 2014, though above the low of below US$30 in early 2015.

The weakness in crude weighed on the S&P/TSX composite index, which fell 8.76 points to 15,410.73.

Losses from the energy sector were partially offset by gains in financials stocks, as three of the county’s largest banks — TD Bank (TSX:TD), Royal Bank (TSX:RY) and CIBC (TSX:CM) — reported strong quarterly results.

The Canadian dollar was up 0.04 of a U.S. cent to an average price of 74.33 cents US.

New York indices gained for a sixth straight sessions as the Dow Jones industrial average added 70.53 points to 21,082.95. The S&P 500 index advanced 10.68 points to 2,415.07 and the Nasdaq composite index gained 42.24 points at 6,205.26 — both hitting record highs.

In other commodities, the June gold contract gained $3.30 to US$1,256.40 an ounce, the July copper contract was up a penny at US$2.60 a pound, and July natural gas contract was down three cents at US$3.28 per mmBTU.

FINANCIAL HIGHLIGHTS

Highlights at the close Thursday at world financial market trading.

Stocks:

S&P/TSX Composite Index _ 15,410.73, down 8.76 points

Dow _ 21,082.95, up 70.53 points

S&P 500_ 2,415.07, up 10.68 points (record high)

Nasdaq _ 6,205.26, up 42.24 points (record high)

Currencies:

Cdn _ 74.33 cents US, up 0.04 of a cent

Pound _ C$1.7422, down 0.06 of a cent

Euro _ C$1.5082, up 0.19 of a cent

Euro _ US$1.1211, up 0.20 of a cent

Oil futures:

US$48.90, down $2.46

(July contract)

Gold futures:

US$1,256.40 per oz., up $3.30

(June contract)

Canadian Fine Silver Handy and Harman:

$24.021 per oz., up 4.5 cents

$772.28 per kg., up $1.45

ICE FUTURES CANADA

WINNIPEG — ICE Futures Canada closing prices:

Canola: July ‘17 $3.30 lower $520.40; Nov. ‘17 $4.40 lower $493.90; Jan. ‘18 $4.60 lower $499.20; March ‘18 $5.00 lower $503.70; May ‘18 $4.90 lower $506.60; July ‘18 $4.60 lower $507.60; Nov. ‘18 $1.50 lower $500.00; Jan. ‘19 $1.40 lower $500.20; March ‘19 $1.40 lower $500.20; May ‘19 $1.40 lower $500.20; July ‘19 $1.40 lower $500.20.

Barley (Western): July ‘17 unchanged $138.00; Oct. ‘17 unchanged $140.00; Dec. ‘17 unchanged $140.00; March ‘18 unchanged $140.00; May ‘18 unchanged $140.00; July ‘18 unchanged $140.00; Oct. ‘18 unchanged $140.00; Dec. ‘18 unchanged $140.00; March ‘19 unchanged $140.00; May ‘19 unchanged $140.00; July ‘19 unchanged $140.00.

Thursday’s estimated volume of trade: 250,720 tonnes of canola; 0 tonnes of barley (Western Barley). Total: 250,720.


Five-day delivery plus unlimited digital access for $185 for 260 issues (must live in delivery area to qualify) Unlimited Digital Access 99 cents for the first four weeks and then only $15 per month Five-day delivery plus unlimited digital access for $15 a month