December 15, 2008 / 3:42 PM / 10 years ago

CANADA STOCKS-TSX rises with oil prices ahead of OPEC

*Oil rises above $49 a barrel ahead of OPEC meeting

*Gold, most base metals firmer; materials up 2 pct (Adds details)

TORONTO, Dec 15 (Reuters) - Toronto’s main stock index edged higher on Monday morning as oil prices rose on expectations that OPEC will agree on a deep supply cut this week to prop up prices, and as firmer metals prices boosted mining shares.

Heavily weighted stocks that moved higher included oil companies such as Suncor Energy (SU.TO), up 5.4 percent at C$26.41, Canadian Natural Resources (CNQ.TO), up 5 percent at C$48.26, and EnCana (ECA.TO), which was 2.7 percent higher at C$56.43.

The big energy sector rose 3 percent as oil rose above $49 a barrel on expectations OPEC will agree on a deep supply cut this week to try to prop up prices, while a weaker U.S. dollar also helped boost oil. [ID:nSP382169]

“From an oil producer’s standpoint, the point that they’re likely to cutback in production is a good thing because at the moment ... we have slowing global growth and slowing demand,” said Bob Gorman, chief portfolio strategist at TD Waterhouse.

“This would reduce supply side in a period of slack demand.”

Shortly after 10:00 a.m. (1500 GMT), the S&P/TSX composite index .GSPTSE was up 35.11 points, or 0.41 percent, at 8,550.56, with three of its 10 main groups higher. The index briefly turned negative before rising again.

The resource-laden materials group rose 2 percent as gold was higher as the U.S. dollar weakened [ID:nL1449620]. Base metals were also higher although oversupply fears could keep gains in check. [ID:nLF132376]

Goldcorp (G.TO) rose 2.3 percent to C$35.59.

Financials capped the gains and were down 1.9 percent, as money flowed into the commodity-related sectors. There did not appear to be any specific headline news related to financial sector, Gorman said.

“Higher oil prices are a negative in the States and might put a little pressure on the U.S. economy that it doesn’t need at this point and that may be reflected in the financials,” he said.

Manulife Financial (MFC.TO) fell 3.8 percent to C$20.44, while Bank of Nova Scotia (BNS.TO) dropped 1.4 percent to C$30.46. ($1=$1.23 Canadian) (Reporting by Jennifer Kwan editing by Peter Galloway)

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