TSX closes 55 points lower as oil rises; dollar surges

Tourmaline Oil Corp rose 3.6 percent to C$37.55 as USA crude prices settled up $1.62 at $51.06 a barrel.

The Organization of the Petroleum Exporting Countries (OPEC) has agreed to cut production by roughly 1.2 Mb/d to 32.5, which equates to a 4.5-4.6 percent cut per member country. "They have seen their earnings decline significantly from last year as they grind through an oil price downturn now in its third year", according to CNBC.

The energy group climbed 3 percent, adding to a almost 8 percent jump on Wednesday after OPEC members and Russian Federation agreed to limit their oil output in a bid to prop up prices.

The agreement came as a surprise to stock markets, which had been fraught with worry over the past few weeks that the historically disagreeable group would not be able to reach a consensus with all its members.

While Wall Street has rallied since the November election on hopes that President-elect Donald Trump's policies would be market friendly, technology stocks have gained the least, rising by a mere 0.6 percent.

The Saudis have always been hesitant to shoulder the lion's share of a cut, while Iran had resisted reducing its own production, arguing that it has yet to recover its output levels hit by years of sanctions. USA stocks climbed near historic highs in early trading today on strength in the oil patch as Opec members reached an agreement to cut petroleum production. Our position is more earnings-based over the next 2 -3 quarters than anything else (crude oil prices).

The energy group, which accounts for one-fifth of the Toronto Stock Exchange's S&P/TSX composite index, jumped 7 percent as crude prices soared.

In mid-2014, a barrel of oil hovered around the US$100 mark, dropping to below US$30 at the start of this year. The deal also shows that the OPEC cartel, which is responsible for a third of the world's crude supply, still holds clout.

"They've found a way to get it done", said Bryden Teich, portfolio manager at Avenue Investment Management.

Asian equities rallied as a deal to cut global oil output fuelled gains in energy shares, while evidence of strength in the U.S. economy sank bonds and supported the United States dollar.

The index ended up 83.04 points, or 0.55 percent, at 15,082.85, for a 2 percent gain in November.

In other commodities, the February gold contract fell $3 to US$1,190.80 an ounce, March copper contracts were down six cents at US$2.61 a pound, and January natural gas contracts were barely changed at US$3.32 per mmBTU.

With files from The Associated Press.