“Brent is rising with sharply lower gasoline stocks at the start of the driving season,” said Eugene Weinberg at Commerzbank. “Refinery utilization is also at its highest in five years, which is bullish news, as it will translate into increasing crude consumption.”Jeff McIntosh/For The Globe and Mail
The Canadian dollar was higher against the U.S. greenback Wednesday amid rising commodity prices while traders kept a wary eye on the euro zone debt crisis.
They also took in the latest reading on U.S. retail sales. Data for May showed sales dropped by 0.2 per cent, although most of the weakness was focused on a drop in gasoline prices.
The commodity-sensitive loonie was up 0.05 of a cent to 97.45 cents U.S.
Oil prices strengthened, with the July contract on the New York Mercantile Exchange ahead 50 cents at US$83.82 a barrel.
"Brent is rising with sharply lower gasoline stocks at the start of the driving season," said Eugene Weinberg at Commerzbank. "Refinery utilization is also at its highest in five years, which is bullish news, as it will translate into increasing crude consumption."
Bullion prices climbed $9.20 to US$1,623 an ounce while July copper edged up one cent to US$3.34 a pound.
Traders were cautious amid concerns about the effectiveness of a Spanish bank rescue announced over the weekend and a downgrade of the country's banks by ratings agency Fitch.
Markets are expected to remain choppy ahead of a Greek vote on Sunday and on fears that Spain's financing problems may spread to Italy. The question of whether Greece will remain in the euro zone after the election and the potential impact of Europe's woes on global economic growth also weighed on stocks.
"The market moved higher after the EIA data but the euro's strengthening against the dollar at nearly the same time may have been more responsible for crude's move higher than the data," said Michael Fitzpatrick, editor of industry newsletter Energy Overview in New York.
Contagion has spread to other heavily-indebted countries. Italy paid 3.972 per cent interest rates — up from 2.34 per cent last month — to sell C6.5 billion in 12-month paper. The bond auction enjoyed strong demand. The sale was a warm-up for Thursday's weightier longer-term paper auction.
The debt crisis is not just rattling financial markets, but also affecting households and businesses by creating uncertainty over the future of the economy.
The latest report from Eurostat, the EU statistics agency, showed industrial production in April among the 17 countries that use the euro slipped 0.8 per cent. Analysts noted that even that poor showing is worse than it seems because a cold Spring pushed up energy demand.
The Dow Jones industrial average was down 18.54 points, or 0.15 per cent, at 12,555.26. The Standard & Poor's 500 Index was down 1.85 points, or 0.14 per cent, at 1,322.33. The Nasdaq Composite Index was up 0.19 points, or 0.01 per cent, at 2,843.26.
In Europe, the FTSEurofirst 300 index of top regional companies was down 0.5 per cent to 984.82.
With files from The Associated Press and Reuters