Canadian dollar continues climb after oil rises 5%

The Canadian dollar continued its rise above 76 cents US on Tuesday after oil prices surged by more than five per cent.

The loonie was up a third of a cent at 76.72 at the close of trading.

West Texas Intermediate crude, the main North American contract, was ahead 5.2 per cent or $2.44 at $48.70 US a barrel. That's it's highest level since the end of August.

• Oil price forecaster declares crude at a 'turning point'

Brent, the international oil contract, was ahead 5.6 per cent or $2.75 to $52 a barrel.

Those are the highest prices in a month for crude, which lost momentum in September because of prospects of a slowdown in China that would depress demand for oil.

A worldwide glut of oil has pulled down the price of WTI from above $100 last year to around the $45 level.

Crude glut is easing

But today, the U.S. Energy Information Agency issued a new short-term forecast that said the surplus of crude is easing.

Total world supply is expected to rise to 95.98 million barrels a day in 2016, less than expected because non-OPEC supply has stalled.

At the same time global oil demand will grow the most in six years, rising by 270,000 barrels a day to 95.2 million barrels a day. That prediction finally balances supply and demand around the world.

Oil prices were also buoyed by reports on Monday that Russia, Saudi Arabia and other big producers would hold talks to support the market.

Russia has suffered economically as oil prices fell and sanctions ate into the economy.

Toronto traders have also been buoyed by the prospect of the TransPacific Partnership lowering tariffs on Canadian goods and opening markets for Canadian raw materials.

That helped the energy and resources stocks advance on Tuesday and improved prospects for the loonie as well.

Suncor's takeover bid for Canadian Oil Sands seemed to boost shares of other energy players amid speculation of further takeover action in the oilpatch now energy prices are so low.

The TSX rose 95 points to 13,790 in Tuesday trading.