North American markets close in the red, following oil lower; loonie edges up

TORONTO – North American markets closed slightly lower Friday in anticipation of this weekend’s meeting of OPEC countries that could culminate in an oil production freeze.

The Toronto Stock Exchange’s S&P/TSX composite index was down 31.09 points at 13,637.20.

New York indexes were also in the red as the dip in oil prices dragged down energy companies.

The Dow Jones industrial average slipped down 28.97 points to 17,897.46. The broader S&P 500 lost 2.05 points at 2,080.73 with energy stocks being the worst performer by far. The Nasdaq composite dipped by 7.67 points at 4,938.22

“There’s a real lack of direction,” said Stephen Carlin, portfolio manager and head of equities at CIBC Asset Management.

The lacklustre closing figures reflect that little noteworthy economic data was being released Friday, he said.

Instead, the markets are waiting to react to news from Sunday’s meeting of some members of the Organization of the Petroleum Exporting Countries in Doha, Qatar.

“Obviously all eyes are on the OPEC meeting this weekend and so there’s some caution,” Carlin said.

Reports and rumours earlier in the week that a production freeze was imminent have been dying out, said Carlin, adding that the market views this as a potential risk, which pushed down oil prices slightly ahead of the gathering.

The May contract for benchmark North America crude closed down $1.14 at US$40.36 a barrel on Friday, adding to losses of the two previous sessions after the commodity closed above US$42 on Tuesday for the first time since late November.

This commodity-sensitive Canadian dollar turned slightly higher after two days of loses. It edged up 0.07 of a U.S. cent to 77.90 cents US.

Earlier in the week, the loonie hit a nine-month high, reaching 78.38 cents US on Tuesday after a reported deal between Russia and Saudi Arabia to cut oil production sent energy prices higher.

The outcome of the OPEC meeting will likely drive Monday’s oil prices and market movement. If OPEC decides to cut back oil production and work towards balancing the current excess oil supply, prices could rise, Carlin said. While the opposite scenario is expected if OPEC does not reach a production freeze deal.

The oil price will then likely drive Canada’s commodity-sensitive loonie and influence energy prices in a similar direction, he said.

Elsewhere in commodities, May natural gas shed 6.8 cents to US$1.90 per mmBtu, while May copper was off nearly two cents at US$2.15 a pound. June gold rose $8.10 to US$1,234.60 a troy ounce.

— With files from the Associated Press

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