Energy sector soars on OPEC deal, pushing stocks to 18-month high
OPEC deal to cut output pushes oil close to $50 US a barrel
Canadian stocks soared to an 18-month high on Wednesday following the news that OPEC had reached an agreement to cut its daily oil output by 1.2 million barrels.
The TSX index closed up 83.04 points at 15,082.85, its highest level since the spring of 2015.
The energy sector powered ahead as the market anticipated a deal to cut world oil output from the Organization of the Petroleum Exporting meeting in Vienna. The TSX energy index ended the day up 5.01 per cent.
Among the big gainers in energy stocks:
- Suncor, up 6.79 per cent at $42.78.
- Canadian Natural Resources, up 8.78 per cent at $45.33.
- Cenovus, up 9.55 per cent at $20.77.
- Whitecap Resources, up 14.11 per cent at $11.97.
- Crescent Point Energy, up 12.5 per cent at $17.10.
In addition to cuts by OPEC members, the oil cartel projected further cuts by non-OPEC producers beginning in January, including 300,000 barrels a day by Russia.
Oil rose 9.6 per cent on the news, with the West Texas Intermediate contract up $4.21, closing at $49.44 US a barrel in New York. Brent, the main international contract for February, was selling above $51 US.
It was also the first trading day after the announcement that the federal government had approved Line 3 and the Trans Mountain pipeline, a development that opens the way for oilsands producers to more easily export their product.
U.S. markets had similar gains on a strengthening energy sector.
The Dow industrial average, which has been on a tear since the election of Donald Trump, closed the day up 1.98 points to 19,123.58. Earlier it touched an all-time high of 19,225.
The S&P 500 energy sector closed up 5.43 per cent, boosted by gains in Exxon and Chevron.