S&P/TSX composite drops despite surge in crude oil prices above US$40 per barrel

TORONTO — Canada’s main stock index dipped midweek despite a surge in crude oil prices back above US$40 per barrel.

The S&P/TSX composite index closed down 135.61 points at 16,295.66.

The energy sector was the star on the day, gaining 3.2 per cent with producers Vermilion Energy Inc. up 11.1 per cent and Crescent Point Energy Corp. up 7.2 per cent, while Whitecap Resources Inc. and Cenovus Energy Inc. were both 6.3 per cent higher.

The moves came as crude prices climbed 4.9 per cent as U.S. stockpiles fell to their lowest level since April and gasoline inventories were down twice as much as expected.

The October crude oil contract was up US$1.88 at US$40.16 per barrel and the October natural gas contract was down 9.5 cents at nearly US$2.27 per mmBTU.

“Supplies are down, which seems to indicate with the inventories being down that the end of the driving season hasn’t been as bad as people thought,” said Michael Currie, vice-president and investment adviser at TD Wealth.

In addition, Hurricane Sally striking the Gulf Coast is causing production to be taken off-line for a little while.

The oil surge wasn’t enough to pull the composite index up.

Eight of the 11 major sectors on the market were lower.

Technology took the biggest fall, losing nearly 2.4 per cent as all but one of the companies in the sector were lower, led by a 4.9 per cent drop by Shopify Inc.

Consumer discretionary and financials also dropped.

Materials were slightly lower despite higher gold prices as the U.S. Federal Reserve committed to “letting inflation run a little bit hot,” said Currie.

The December gold contract was up US$4.30 at US$1,970.50 an ounce and the December copper contract was down less than a penny at US$3.06 a pound.

The Canadian dollar

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