Skip to main content

An oil pump works at sunset March 7, 2013, in the desert oil fields of Sakhir, Bahrain. THE CANADIAN PRESS/AP, Hasan JamaliThe Associated Press

The Toronto stock market recovered from a negative opening Thursday in the wake of a report indicating the world will be needing a lot less oil for the rest of this year.

The S&P/TSX composite index was up 25.63 points to 15,497.52.

The International Energy Agency expects global oil demand to grow by 0.9 million barrels a day in 2014, a decrease of 65,000 barrels a day compared with last month's forecast and down by 300,000 barrels a day since July. The IEA blames economic weakness in Europe and China.

The Canadian dollar dropped 0.53 of a cent to 90.92 cents (U.S.) as weaker than expected Chinese inflation pressured commodity-based currencies.

U.S. indexes were also in the red with the Dow Jones industrials down 60.11 points to 17,008.6, the Nasdaq shed 15.38 points to 4,571.14 while the S&P 500 index declined 5.81 points to 1,989.88.

The IEA also said that oil demand growth in the second quarter was at its lowest in more than two years and the lower growth outside North America is expected to weigh on demand.

The glum picture for oil consumption comes at a time when the TSX energy sector has been a major reason the Toronto market is up 13.6 per cent year to date. The energy sector is up about 13 per cent so far this year.

On Thursday, the energy sector lost 0.85 per cent, while the October crude contract in New York fell 89 cents to $90.78 (U.S.) a barrel after closing at an eight month low Wednesday. The Organization of the Petroleum Exporting Countries (OPEC) had announced it was cutting production amid slow growth and increasing U.S. production.

Traders considered better than expected earnings reports from Empire Co., the parent of grocer Sobeys and yoga retailer Lululemon Athletica.

Empire's consolidated quarterly net earnings were $123.1-million (Canadian) or $1.33 per diluted share. That was up from $65-million or 95 cents a share a year earlier.

Adjusted net earnings were $131.7-million or $1.43 per share, well ahead of analyst expectations of $1.35 per share on $6.21-billion of revenue.

Revenue jumped more than 35 per cent to $6.22-billion, reflecting Empire's acquisition of grocery chain Canada Safeway and its shares gained 37 cents to $74.79.

Lululemon reported a lower second-quarter profit of $48.7-million (U.S.) or 33 cents per share, compared with $56.4-million, or 39 cents per share a year ago. Revenue for the quarter was up 13 per cent to $390.7-million. Its stock jumped 16 per cent to $44.52 in New York as the Vancouver-based company also raised its full-year adjusted earnings guidance after having lowered it in June.

Discount chain Dollarama gained 93 cents to $94.80 (Canadian) as it increased its second-quarter net profit to $68.8-million, or $1.03 per share, compared with $59.7-million, or 82 cents per share, in the same quarter of the last fiscal year. Sales increased by 12 per cent to $572.6-million. It also announced a two-for-one stock split.

Meanwhile, tour package operator Transat said quarterly net earnings came in at $25.8-million, or 66 cents per share, compared with $41.1-million, or $1.07 per share, in the same quarter of 2013, largely because of the impact of fuel-hedging accounting during 2013. Revenues were up at $941.7-million, compared with $927-million year-over-year and shares gained 16 cents to $9.

Meanwhile, China's consumer inflation eased in August amid signs of cooling economic growth. Prices rose two per cent from a year earlier, down from July's 2.3 per cent increase. The rise in consumer prices was well below the government's target for the year of 3.5 per cent and raised fresh questions as to whether Beijing might try to shore up economic growth.

The Chinese data helped depress the December copper contract, which was down three cents to $3.08 (U.S.) but the base metals sector was slightly higher.

The gold sector was unchanged as December gold faded $1.50 to $1,243.80 an ounce.

Interact with The Globe