Gas prices are shown at a gas station in Beaverton, Ont., on Saturday Dec. 20, 2014.Doug Ives/The Canadian Press
Energy stocks pushed the Toronto stock market lower as oil prices retreated further amid a weak pricing forecast from investment bank Goldman Sachs.
The S&P/TSX composite index fell 255 points to 14,129.89 with the energy sector down almost four per cent.
The February crude contract in New York dropped $1.96 US$to 46.40 a barrel after energy analysts at Goldman Sachs reduced forecasts for global benchmark crude prices, predicting inventories will increase over the first half of this year. It forecast that West Texas Intermediate — the North American benchmark — will trade at US$41 a barrel and global benchmark Brent at $42 in three months. It had previously forecast WTI at $70 and Brent at $80 for the first quarter.
Meanwhile, another major energy player is responding to the collapse in oil prices with lower capital spending plans. Canadian Natural Resources Ltd. is reducing its 2015 capital spending plan by nearly 30 per cent and now plans to spend $6.19-billion in 2015, or $2.- billion less than expected in November. Prices have plunged more than 55 per cent since the highs of last June amid an oversupply of crude. Canadian Natural dropped 72 cents to C$32.45.
The Canadian dollar shed 0.36 of a cent to 83.91 cents US, its lowest level since the end of April, 2009.
New York indexes were also negative as the Dow Jones industrials fell 142.1 points to 17,595.31, the Nasdaq dropped 48.09 points to 4,655.98 and the S&P 500 index lost 19.66 points to 2,025.15.
Elsewhere on the TSX, the base metals group was down almost three per cent while lower demand prospects sent copper to a 4 1/2 year low with the March contract four cents lower to US$2.72 a pound.
Other market weights included industrials, down 1.15 per cent and financials fell one per cent.
The gold sector was the only positive sector, ahead two per cent while February bullion gained $6.90 to US$1,223 an ounce.
The Toronto market had a dreadful start to the 2015 trading year, with the TSX losing 369 points or 2.5 per cent last week. The energy sector led losses, falling six per cent in addition to the 20 per cent plunge for all of 2014.
On the corporate front, Lululemon Athletica Inc. says it's more optimistic about the revenue and profit that the clothing company will generate in the current quarter, which includes the Christmas-New Years period. The Vancouver-based retailer now estimates revenue in the its fourth quarter will be between $595 million and $600 million, .about $15 million higher than previously estimated. Lululemon also estimates earnings of between 71 and 73 cents US per share — two to four cents per share above the top of its previous range and its shares gained $3.17 to US$61.80.
The Globe and Mail reported that Guelph, Ont.-based Linamar Corp. plans to create 1,200 jobs amid a $50- million investment from the federal government. A formal announcement was expected later in the morning. Linamar shares climbed 32 cents to $69.12.
Private equity firm Onex Corp. is buying British survival equipment provider Survitec Group Ltd. for $680-million. The company has more than 2,000 employees and operates seven manufacturing facilities around the world. For its most recent fiscal year, ended March 31, 2014, Survitec generated approximately $370-million in revenues. Onex edged up six cents to $65.57.