March 20 (Bloomberg) -- Canadian stocks retreated from a record high for a second day, as the biggest decline in oil prices in seven months sent shares of energy producers such as EnCana Corp. lower.

The Standard & Poor's/TSX Composite Index extended its drop in the afternoon as investors waited for confirmation from U.S. Federal Reserve Chairman Ben S. Bernanke in a New York speech later in the day that inflation is under control.

``The market will find it difficult to go higher if oil falls further,'' said Patricia Croft, who helps oversee $41 billion as chief economist at Phillips Hager & North Investment Management in Toronto. ``There are lingering concerns about Ben Bernanke and whether interest-rate increases are really close to being finished as the market seems to be anticipating.''

The S&P/TSX slid 71.41, or 0.6 percent, to 11,929.32. The benchmark index reached a record high of 12,085.65 on March 16.

A measure of energy shares, which accounts for 30 percent of the S&P/TSX's value, lost 2.3 percent for the worst performance among 10 industry groups.

Crude oil for April delivery tumbled 3.7 percent to $60.42 a barrel in New York, the biggest drop since August. U.S. inventories approached a seven-year high, easing concern about supply disruptions in Nigeria and Iraq.

EnCana, the country's biggest natural-gas producer, fell C$2.18 to C$53.09. Suncor Energy Inc., the world's No. 2 miner of oil sands, dropped C$2.23 to C$83.60.

Gains for stocks in the heavily weighted financial sector helped limit losses. Manulife Financial, Canada's largest insurer, rose 90 cents to C$74.90

Bernanke Speech

Longer-term rates will stay low as long as the Fed controls inflation and the U.S. looks attractive to global investors, Bernanke may say in a 7 p.m. speech before the Economic Club of New York. Policy makers, who have lifted the Fed's main interest rate 14 straight times, meet again on March 28.

Speculation that the Fed is closer to ending its series of interest-rate increases helped send the S&P/TSX to a record last week and pushed the S&P 500 to a four-year high.

The Bank of Canada may increase its benchmark rate to 4 percent by June 30 and pause there through the end of the year, based on the median forecast of 15 economists in a Bloomberg survey taken between Feb. 28 and March 7. The bank next meets on April 25 and May 24.

The following shares had unusual price changes. Stock symbols are in parentheses after company names.

Centurion Energy International Inc. (CUX CN) rose 84 cents, or 6.4 percent, to C$13.91, for the biggest gain in the S&P/TSX. The oil company said Royal Dutch Shell Plc's Egyptian units will help it explore for natural gas in the Nile Delta.

Sino-Forest Corp. (TRE CN) lost 42 cents, or 6.4 percent, to C$6.10, for the biggest decline in the S&P/TSX. The largest foreign-owned lumber company in China postponed to an unspecified date its fourth-quarter and annual 2005 results, saying BDO McCabe Lo & Company needed additional time to complete its first audit of the company.

EnCana Corp. (ECA CN)
Suncor Energy Inc. (SU CN)

To contact the reporter on this story: John Kipphoff in Toronto at jkipphoff@bloomberg.net.

Last Updated: March 20, 2006 17:00 EST