Oil still heading lower, TSX off by more than 1 per cent
Oil started the session in decline and has ended it that way too. Benchmark Brent crude and West Texas Intermediate are both below $29 as markets weighed the lifting of Iranian sanctions and the impact that its estimated 500 million barrels a day will have.
Canada’s energy firms led the fall in equities, as they have so many times before, amid speculation that prices could reach $10 this year. The notable exception was Canadian Oil Sands which saw a 12 per cent rise in its stock value as Suncor Energy increased its offer for the business.
Asian and European markets closed lower too while New York was closed for Martin Luther King Day; futures are trending lower.
The S&P/TSX Composite Index closed down 131.3 (1.09 per cent)
Oil is trending lower (Brent $28.78, WTI $28.94 at 4.10pm)
Gold is trending lower (1088.90 at 4.10pm)
The loonie is valued at U$0.6871
Interest rate cut mustn’t happen says National Bank
If the Bank of Canada cuts interest rates Wednesday, it will further fuel the slump in the Canadian dollar and further hit confidence in the economy from both outside and within the country. That’s the view of National Bank Financial Markets’ chief economist Stefane Marion who warned that businesses are already under pressure from the cost of new equipment, which is largely imported and therefore increasing in cost. A range of economic conditions have impacted the loonie, led by the lower oil prices, but Marion says that his team’s expectations that it would drop 10 cents against the greenback have been far exceeded; the loonie has dropped 25 cents.
Suncor now willing to pay more for COS
Suncorp said Monday that it has increased its offer for Canadian Oil Sands from 0.25 of its shares for each COS share to 0.28. That makes the offer worth around $8 billion, up from the original $6.6 billion and is worth $8.74 per COS share, rather than the $7.81 it previously offered. Currency fluctuations will vary the deal. CBC News reports that investor Seymour Schulich, who has very publicly called for COS shareholders to reject the original offer, now backs the new deal. The offer will now expire on Feb 5 at 4pm.