Canadian Stocks Advance on Forecast for Higher Oil Demand; TD Bank Gains

Canadian stocks rose, led by commodity producers and banks, as oil gained on a forecast of stronger global demand and reports of economic growth in Asia.

Canadian Natural Resources Ltd., the country’s second- largest energy company by market value, advanced 3.9 percent after the International Energy Agency raised its estimate for 2010 oil consumption. Oil and gas producer Storm Exploration Inc. surged 19 percent after agreeing to be bought by ARC Energy Trust. Royal Bank of Canada, the country’s biggest bank, increased 1.8 percent as lenders climbed.

The Standard & Poor’s/TSX Composite Index rallied 185.21 points, or 1.6 percent, to 11,635.85.

“People are basically saying what’s happening in Europe doesn’t have any impact on the economic situation” because of strong numbers from Asia, said Stephen Gauthier, who helps manage C$500 million ($485 million) at Fin-XO Securities Inc. in Montreal. “It’s not a disaster so far in China.”

The S&P/TSX has fallen 3.3 percent this quarter on concerns austerity measures in Europe and efforts to prevent the Chinese economy from overheating may inhibit the global economic recovery. Oil has dropped 9.4 percent and copper 19 percent during the period.

The U.S. dollar retreated the most against the euro in two weeks after European Central Bank President Jean-Claude Trichet said the bank will keep buying government bonds to fight the debt crisis.

Oil Use

The IEA, based in Paris, said oil use should rise 2 percent this year to a record 86.4 million barrels. The increase of 60,000 barrels from last month’s estimate is due to an acceleration in demand from North America.

Also today, Japan revised its first-quarter gross domestic product increase to an annualized rate of 5 percent from the previously reported 4.9 percent, and China said exports jumped 48.5 percent last month from a year earlier.

Crude futures gained for a third day, advancing 1.5 percent to $75.48 a barrel in New York.

Canadian Natural climbed 3.9 percent to C$37.16. Suncor Energy Inc., the country’s largest oil and gas company, rose 2.7 percent to C$33.39. Cenovus Energy Inc., the oil company spun off from EnCana Corp. in December, gained 3.6 percent to C$29.66.

Storm Exploration

Storm Exploration, which operates in western Canada, soared 19 percent, the most in 19 months, to C$13.63 after agreeing to ARC’s offer, which the companies valued at about C$680 million ($660 million). ARC, which also produces energy in Canada, dropped 3.5 percent to C$20.15.

Petrobank Energy & Resources Ltd. rallied 5.5 percent to C$42.52. Petrominerales Ltd., in which Petrobank has a 66 percent interest, announced it would begin paying quarterly dividends beginning July 15.

Methanex Corp., the world’s largest methanol supplier, jumped 5.2 percent to C$22.32. The company’s products are used as an additive in gasoline, and Asia accounts for most of its revenue.

All eight Canadian publicly traded banks gained. Toronto- Dominion Bank, the country’s second-largest bank, advanced 1.6 percent to C$70.02. Royal Bank increased 1.8 percent from a nine-month low to C$52.98. Bank of Nova Scotia, the No. 3 lender by assets, climbed 2 percent to C$49.66.

An index of base-metal and coal producers rallied the most in 10 days as copper rose for a third day.

Teck Resources Ltd., Canada’s largest base-metals producer, rose 5.3 percent to C$34.19. First Quantum Minerals Ltd., Canada’s second-largest copper producer, surged 7.9 percent to C$55.44 after Reuters reported that its president said a new project may double revenue. Western Coal Corp. gained 4.6 percent to C$4.79 after reporting fourth-quarter earnings that beat the average analyst estimate.

Potash Corp. of Saskatchewan Inc., the world’s largest fertilizer producer, advanced 3.7 percent to C$103.54 after Richard Davis, a managing director at BlackRock Investment Management, told a conference the company has “the best” potash assets.

To contact the reporter on this story; Matt Walcoff in Toronto at mwalcoff1@bloomberg.net

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