TORONTO — Resource stocks accounted for the majority of gains on the Toronto stock index Wednesday as the latest figures from the U.S. showed an unexpectedly large drawdown last week in crude stocks.
The S&P/TSX composite index was ahead 64.01 points to 15,633.21, with energy, gold and materials stocks leading advancers.
The U.S. Energy Information Administration reported that crude oil stocks fell by 5.2 million barrels last week — a bigger decline than expected and a signal that demand may pick up.
Ian Scott, an equity analyst at Manulife Asset Management, said analysts had only been expecting an average drop of two million barrels. The bigger downturn was attributed to a decline in imports.
“Imports have been stubbornly high, a figure which investors have been watching,” he said.
“That number can give you a reading on OPEC and (the impact of) their cuts. We definitely want to see inventory numbers coming down.”
OPEC, the 14-member cartel, is set to meet on May 25 to discuss whether they will continue with current caps on production levels.
Oil prices rallied on the news, with the June crude contract jumping $1.45 at US$47.33 per barrel, while the June natural gas contract was up seven cents at US$3.29 per mmBTU.
The Canadian dollar was ahead 0.30 of a U.S. cent to an average value of 73.14 cents US.
In other commodities, the June gold contract advanced $2.80 at US$1,218.90 an ounce and the July copper contract was unchanged at US$2.49 a pound.
In New York, the Dow Jones industrial average lost 32.67 points to 20,943.11. The S&P 500 index gained 2.71 points to 2,399.63 and the Nasdaq composite index added 8.55 points to 6,129.14 — record highs for both indices.
Scott said it was a bit surprising that there didn’t seem to be any market reaction to U.S. President Donald Trump’s abrupt firing of FBI Director James Comey.
“The markets are learning that he’s great at generating a lot of noise but he hasn’t actually gotten a lot done action wise,” he said of Trump.
“There’s been some executive orders but I think you kind of have to take everything he says with a grain of salt now.”
