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Canadian stocks dip as demand for crude slows down

Xinhua, September 14, 2016 Adjust font size:

Canada's main stock market in Toronto Tuesday dropped by more than 200 points for the second time in three trading days following an International Energy Agency (IEA) report that suggested the supply for crude oil had surpassed the demand.

The Toronto Stock Exchange's benchmark Standard & Poor's/TSX Composite Index dipped 248.04 points, or 1.70 percent, to 14,349 points. All 10 of the TSX index's sub-sectors saw losses on the day.

In their monthly Oil Market Report released on Tuesday, IEA indicated that "global demand is slowing at a faster pace than initially predicted."

"Supply-demand dynamic may not change significantly in the coming months," the Paris-based publication added.

The report also outlined that OECD countries have built up record high level of crude oil inventories where "supply will continue to outpace demand at least through the first half of next year."

As a result, oil prices fell; with U.S. light sweet crude for October delivery falling 1.09 U.S. dollars to 44.97 dollars a barrel in New York while Brent crude for October delivery in London retreating 1.17 dollars to 47.15 dollars a barrel.

The TSX Energy sector fell 3.33 percent as Calgary-based energy firms Baytex Energy Corp. and Encana Corporation saw shares fall 7.61 percent to 4.12 dollars and 5.60 percent to 9.60 dollars, respectively.

The Materials sector, which includes miners of gold and other precious metals, dipped 2.85 percent on the day. Vancouver-based First Quantum Minerals Ltd. saw shares plummet 6.56 percent to 10.11 Canadian dollars. Meanwhile, Barrick Gold, the world's largest gold mining company saw shares shed 1.77 percent to 17.32 dollars.

A day following the announcement of their planned merger, Agrium Inc. and Potash Corporation of Saskatchewan Inc. shares fell as many believe the U.S. regulatory bodies will scrutinize the deal before it can be finalized. Agrium Inc. shares fell 3.61 percent on the day, while Potash closed the day down 2.57 percent.

The Canadian dollar traded retreated to 0.7593 dollars, compared with Monday's closing rate of 0.7669 dollars. Endi