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TSX May Open Lower As Commodities Slide

Canada's benchmark index looked set to open lower on Thursday, dragged down by the weakness in commodity prices.

Stock futures for the June quarter on the S&P TSX index were down 0.1% recently.

Action Economics said front-month WTI futures were down after the weekly API report showed U.S. inventories rise by 1 million barrels in the week to May 25, which was nearly double the median forecast. There is a cautious disposition in crude markets presently, with participants looking for clarification from OPEC and Russia on their supply intentions. Market sources cited by Reuters suggest that Saudi Arabia and Russia have been discussing rising output by 1 million barrels per day to offset the loss in Venezuelan supply. The next OPEC meeting, in three weeks, will be a particular focus following indications that a softening in the OPEC-led supply accord could be afoot, although a Gulf source, also cited by Reuters, suggested that Saudi is of a mind to maintain prevailing quotas through to year-end while making up any supply shortfalls (such as Iranian supply, which is facing an embargo from the U.S.)

The TSX surged 126 points on Wednesday, with energy stocks leading the advance.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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