Oil jumps 4 per cent on Saudi comments
The recent slide in oil prices was reversed Thursday as comments from the Saudi energy minister saw US crude and the international benchmark Brent jump around 4 per cent. Khalid al-Falih gave hope that OPEC members will aim to stabilize the market when they meet next month.
The rise for oil helped equity markets but Toronto’s main index was subdued on news that Valeant Pharmaceutical is facing a criminal investigation into whether its relationship with a specialty pharmacy was hidden from its insurers.
Corporate earnings along with the boost for oil prices helped the three main Wall Street indexes close at record highs and European markets were also generally higher. Asian markets were mixed but will react to oil prices overnight.
The S&P/TSX Composite Index closed up 21.02 (0.14 per cent)
The Dow Jones closed up 117.9 (0.64 per cent)
Oil is trending higher (Brent $45.91, WTI $43.37 at 4.20pm)
Gold is trending lower (1343.40 at 4.20pm)
The loonie is valued at U$0.7704
Gibsons Energy rejects takeover
Calgary-based Gibson Energy has said no to a reported $2.8 billion offer from a foreign entity, believed to be from Singapore. The bidder was not identified but its offer was seriously considered before being rejected as not providing shareholder value, Gibson said.
Nomura economists see interest rate cut
Canada could cut interest rates again this year if exports continue to disappoint according to economists at Nomura. In a client note, economist Charles St-Arnaud wrote that the BoC’s growth forecast needs better results from non-energy exports and without that growth the current 40 per cent expectation for an interest rate cut could rise.
While a rate cut may benefit businesses that are under pressure from cheaper labour and materials costs in Asia and Mexico, it would also raise a familiar concern: “The BoC should be worried if it reignites household borrowing and the housing market, while business investment is currently not very sensitive to rate cuts,” St-Arnaud wrote.
Fewer choices for Canadian job-hunters
The number of job vacancies in Canada declined in the first quarter of 2016 Statistics Canada reported Thursday.
There were 328,000 vacancies, down 17.9 per cent from a year earlier. The vacancy rate was down 0.5 percentage points to 2.8 per cent.
All provinces saw a decline in vacancies but Alberta and Saskatchewan recorded the largest drops.