Oil prices surged to a new peak over $114 US a barrel yesterday and the U.S. dollar rose after surprisingly strong U.S. inflation and manufacturing data suggested the U.S. Federal Reserve may slow its interest rate-cutting campaign.
In Canada, the record high for oil prices drove the Toronto Stock Exchange’s main index higher, with stronger resource issues overshadowing lingering worries about a weak earnings season.
The jump in oil and rising inflation, boosted by higher prices for energy and food, gave investors pause. British Prime Minister Gordon Brown urged OPEC members to boost production to counter rapidly rising oil prices, which have shot up 80 per cent since a year ago.
In Europe, shares rose after five days of losses, as upbeat results by supermarket operator Tesco boosted food retailers and record oil prices lifted the energy sector.