Oil prices burst through $100 (U.S.) a barrel on Tuesday, the biggest rise in four weeks, helping lift stocks in the North American energy sector.
On the Toronto Stock Exchange, Petrobank Energy and Resources shares rose 5 per cent and Suncor gained more than 2 per cent.
The jump in crude prices appears to come from concerns that supplies could be disrupted, following rumours that Iran will hold military drills to close the Strait of Hormuz. Those rumours expanded online into worries that Iran plans to shut down the Strait, which runs between Iran and Oman.
The price of crude jumped almost 4 per cent earlier in the day, but prices have dipped in afternoon trading, following a denial of the rumours by Iran’s foreign ministry.
About one-sixth of the world’s daily consumption of oil passes through the Strait, according to the U.S. Department of Energy.
Another rumour that is being cited for oil’s rise is that the Federal Reserve may announce additional stimulus Tuesday afternoon. But stocks weren’t getting much lift from the speculation, so it’s unlikely oil is either.Report Typo/Error