Business

Canadian dollar moves above 71 cents as oil recovers

The Canadian dollar is at its highest level in three weeks after oil surged overnight in Asia and remained strong in North American trading.

TSX has 3 days of gains, but is still down 3% on the year

Oil surged by as much as seven per cent on Thursday on rumours that the Saudis may be preparing to cut production. (Matthew Brown/Associated Press)

The Canadian dollar is at its highest level in three weeks after oil surged overnight in Asia and remained strong in North American trading.

The loonie is up one quarter of a cent at 71.18 cents US, the highest it's been since the beginning of the year. 

Oil briefly traded above $34 US per barrel as the Russian government continued talks with Saudi Arabia and OPEC about cutting production.

"If there was a cut, it would be very bullish and there's a reaction that's pushing oil higher," said Brenda Kelly, head analyst at London Capital Group.

Within an hour of that report, however, a Saudi spokesman for OPEC poured cold water on the notion of a production cut.

West Texas Intermediate, the benchmark North American contract, finished the day up 3.5 per cent or $1.44 at $33.74 US a barrel. 

Brent, the international contract, rose $1.31 to $34.41 US, returning it to levels it passed heading downwards during the first week of January.

The strength in oil was good for Toronto stocks, which have been gaining for the past three days. The TSX was up 213 points at 12,591, with the energy sector up 3.5 per cent.

However, it is still down three per cent on the year.

In New York, the Dow Jones industrial average rose 122 points to 16,067.

Facebook shares surged after it reported that its profit more than doubled Thursday, while eBay's shares tumbled.

With files from Reuters News Agency