TORONTO — The Toronto stock market headed for a sharply higher open Tuesday as a strong rally in oil prices extended to a third day, with cutbacks by major producers raising hopes that crude prices have hit a bottom and some recovery may be in sight.
The Canadian dollar was little changed, down 0.02 of a cent to 79.49 cents US after charging ahead more than eight-tenths of a cent on Monday.
U.S. futures were mixed with the Dow Jones industrials ahead 33 points to 17,332, Nasdaq futures down 4.7 points to 4,180.8 and the S&P 500 futures edged up 4.1 points to 2,021.2.
Oil prices have surged 10 per cent over the last two sessions amid news of a big drop in U.S. drilling rig counts. On Tuesday, the March contract in New York was up $1.28 to US$50.83 a barrel but prices are still down about 50 per cent from the most recent highs reached last June because of a huge oversupply of crude on world markets.
Besides drastically cutting the number of drilling rigs, oil companies have also responded to oversupply by slashing capital spending plans and in some cases cutting production.
BP joined a growing list of such companies on Tuesday as it announced that capital expenditure in 2015 will total around $20 billion, significantly lower than its previous guidance of $24 billion to $26 billion.
It also reported a loss of $4.4 billion for the fourth quarter of 2014.
Elsewhere on commodity markets, March copper jumped seven cents to US$2.56 a pound.
April bullion lost $2.20 to US$1,274.70 an ounce.
In other earnings news, WestJet Airlines Ltd. posted a record fourth quarter profit of $90.7 million or 70 cents a share, in line with estimates. That was up 34 per cent from $67.8 million a year ago. Revenue was $994.4 million, up 7.3 per cent from a year ago and also in line with estimates.
On the economic front, U.S. home values rose at a modest pace in December as real estate data provider CoreLogic says home prices rose five per cent from 12 months earlier. That is down from the 5.5 per cent price gain recorded in November. It’s much lower than the double-digit gains that occurred last year.
Later in the morning, investors will digest U.S. factory orders data for December.
And on Friday, they will take in the major report of the week — the U.S. government’s employment report for January, which is being released Friday.
Canadian job numbers for January also come out Friday.