TORONTO - The Toronto stock market headed for a negative start to the trading day Wednesday as oil prices fell further after the OPEC cartel cut its forecast for 2015 world oil demand, and also said supplies from non OPEC countries will rise more than forecast next year.
The Canadian dollar shed 0.11 of a cent to 87.3 cents US.
New York futures were mainly lower with the Dow Jones industrial futures down 42 points to 17,738, the Nasdaq futures rose 1.7 points to 4,292.5 while the S&P 500 futures slipped 5.2 points to 2,052.3.
OPEC forecast that demand for its oil would drop to 28.9 million barrels a day next year, compared with 29.4 million barrels a day in 2014, the weakest amount in 12 years. The cut comes amid lower demand and rising supplies, especially from the U.S.
It also followed the decision by OPEC last month to leave production levels unchanged.
Oil has plunged about 35 per cent from mid-summer highs while markets work out a huge imbalance between supply and demand. On Wednesday, the January crude contract on the New York Mercantile Exchange dropped $1.30 to US$62.52 a barrel.
Meanwhile, Iran's President Hassan Rouhani says the sharp fall in oil prices is the result of "treachery," in an apparent reference to regional rival Saudi Arabia, which opposed production cuts to lift prices.
Elsewhere on commodity markets, metal prices declined with February gold down $1.40 to US$1,230.60 after traders looking for a safe haven pushed gold up $37 on Tuesday.
March copper gave back most of Tuesday's four cent gain, down three cents to US$2.90 a pound.
The TSX registered a 52-point gain on Tuesday as buyers bought into resource companies that have been hit hard by a late-autumn selloff that has left the Toronto market up only about four per cent year to date. Energy stocks in particular have suffered with the sector down 24 per cent year to date.
There was some positive economic data from China. Inflation in the world's second-largest economy fell further in November as the rise in food prices moderated, giving Chinese leaders room if needed to pump more stimulus into the slowing economy. Consumer prices rose 1.4 per cent over a year earlier, down from October's already low 1.6 per cent increase. Low inflation gives Beijing room to cut interest rates or launch new stimulus spending with less concern about setting off a price spike.
Economic growth fell to a five-year low of 7.3 per cent in the latest quarter. Beijing cut interest rates Nov. 22 in an apparent move to stop the deepening downturn.
On the corporate front, oil giant BP has warned that plans to streamline its business will cost it US$1 billion over the next year.
The changes are part of the company's move to downsize and simplify its operations following $43 billion worth of divestments since the 2010 Gulf of Mexico oil spill.
