New oil potential fuels optimism for Canadian energy companies
By Ashley Lau
SAN FRANCISCO (MarketWatch) — Stocks in Toronto finished higher on Wednesday, with shares of Canadian energy companies advancing on oil-price gains and positive news from the country’s oil industry.
The S&P/TSX Composite Index (CA:$ISPTX 12,383, +103.94, +0.85%) rose 103.9 points, or 0.9%, to 12,382.8.
Toronto’s main energy shares index (CA:TTEN 281.82, +5.65, +2.05%) rose 2.1%, as Canada’s Suncor Energy Inc. (CA:SU 33.19, +0.68, +2.09%) shares gained 2.1%.
“In Alberta, especially with oil, prices are the prime mover of stocks,” Peter Howard, president of the Canadian Energy Research Institute, told MarketWatch. Howard forecasts that the energy sector will advance further on rising oil prices (CLX10 77.56, -0.30, -0.39%) and technological developments that will allow energy companies to extract more oil from current reserves.
Energy companies also advanced on news that Canadian oil fields could produce as many as 15 billion barrels that wasn’t expected to be extracted, according to a report released Tuesday by CIBC World Markets Inc.
Cenovus Energy Inc. (CA:CVE 29.60, +0.79, +2.74%) shares also advanced, rising 2.7%. The Canadian energy company last week announced it received regulatory approval for its $2-billion Foster Creek expansion.
Research In Motion Ltd. (CA:RIM 50.04, +1.64, +3.39%) (RIMM 48.36, +1.45, +3.09%) made a comeback, bolstering the information technology sector, with RIM shares rising for the first time since Monday, when the BlackBerry maker introduced its PlayBook tablet. RIM shares on the TSX rose 3.4% to $50.04 per share.
Financial shares also turned around, with the TSX financial shares index (CA:TTFS 176.51, +0.67, +0.38%) rising 0.4%, despite continued European banking concerns as demonstrators took to the streets to protest against the proposed government austerity measures.
Canadian gold shares also reversed direction, with Toronto’s main gold shares (CA:TTGD 407.78, +0.39, +0.10%) index rising 0.1% as bullion prices advanced into record territory Wednesday.
Bullion prices climbed to $1,311, up 2 cents a share on the Comex division of the New York Mercantile Exchange. The rising prices sent mixed results to Canadian gold mining giants Barrick Gold Corp. (CA:ABX 48.57, +0.31, +0.64%) and Goldcorp Inc. (CA:G 45.55, 0.00, 0.00%) forward, with Barrick’s Toronto shares rising 0.6% and Goldcorp shares unchanged at $45.55.
Shares of Canadian health-care companies also fell, leading the decliners, with Toronto’s main health-care index (CA:TTHC 47.01, -0.32, -0.68%) falling 0.7% amid growing concern of the state of Canada’s health-service providers. The Canadian Cancer Society on Wednesday released a poll showing only one-third of Canadians believe that the country’s health-care system will be able to provide affordable cancer drugs.
The Canadian Health Council earlier this week said that Canada continues to “lag behind” many other countries in the use of health-information technology.
In currency trading, the Canadian dollar (USDCAD 1.0336, +0.0016, +0.1550%) weakened by 0.2% against its U.S. counterpart, with one U.S. dollar now buying C$1.0324, up from C$1.0301 on Tuesday. But strategists at Brown Brothers Harriman said Wednesday that the Canadian loonie is poised to reverse, saying that the loonie will be better positioned if the U.S. embarks on more quantitative easing. Read more about the currency report.
“Like minded traders may want to consider long Canada-short Mexico positions near current levels,” said Marc Chandler, global head of currency strategy at BBH.
