{"id":520062,"date":"2026-03-07T09:07:09","date_gmt":"2026-03-07T09:07:09","guid":{"rendered":"https:\/\/www.newsbeep.com\/ca\/520062\/"},"modified":"2026-03-07T09:07:09","modified_gmt":"2026-03-07T09:07:09","slug":"everyones-trying-to-figure-out-what-to-do-next-as-oil-tops-us90","status":"publish","type":"post","link":"https:\/\/www.newsbeep.com\/ca\/520062\/","title":{"rendered":"‘Everyone’s trying to figure out what to do next’ as oil tops US$90"},"content":{"rendered":"

\"AlbertaiStock \/ Dan Prat<\/p>\n

Stock and bond markets took one on the chin this week, amid rising oil prices triggered by a new war in the Middle East and a disappointing U.S. jobs report<\/a> on Friday. The April crude oil contract topped US$90 a barrel Friday.<\/p>\n

\u201cIf you\u2019re unable to weather this volatility, then maybe you\u2019re taking on too much risk,\u201d said Greg Taylor, chief investment officer at PenderFund Capital Management Ltd. in an interview with me on Thursday. \u201cYou\u2019re probably overextended.\u201d<\/p>\n

Not a bad message for clients struggling to keep their eye on the long term.<\/p>\n

The S&P\/TSX composite index closed Friday down 3.3% for the week. The S&P 500 fell just 1.5%; the Dow Jones Industrial Average lost 2.4%.<\/p>\n

Taylor said there\u2019s a lot of uncertainty among investors. \u201cEveryone\u2019s trying to figure out what to do next,\u201d he said. \u201cIt\u2019s hard to make any long-term plans, because it seems every morning you come In, the narrative is changing.\u201d<\/p>\n

What was striking this week was how undaunted investors appeared to be, notwithstanding Friday\u2019s losses. Taylor said it seemed to him like they were, \u201cbuying the dip. \u2026 That\u2019s a bit of a dangerous mentality,\u201d he said. \u201cAt some point that\u2019s not going to work, and that\u2019s going to \u2026 hurt some people.\u201d<\/p>\n

Investors have appeared to be betting on a short-term engagement in the Middle East, although today\u2019s results call that narrative into question. The Financial Times reported an interview with Qatar Energy Minister Saad al-Kaabi today forecasting oil at US$150 a barrel if the U.S.-Iran war escalates and shipping in the Strait of Hormuz remains disrupted in the coming weeks.<\/p>\n

That would be considered a worst-case scenario.<\/p>\n

\u201cInflation could come back if oil does spike,\u201d Taylor said. \u201cThere have already been some signs that inflation is being a little stickier at the upside that we had feared. So, I think it\u2019s out there, and the markets have been looking for rate cuts in the second half of the year \u2014 those will come into question if oil stays higher.\u201d<\/p>\n

Canada\u2019s energy sector could benefit<\/p>\n

In a report published Monday<\/a>, Olivier Gervais, director, modelling and forecasting at Scotiabank Economics, wrote that, \u201c[a]s a net energy exporter, Canada benefits from an improvement in its terms of trade when oil prices rise.\u201d<\/p>\n

But gains in sector profits and investment will come amidst a rise in the cost of living. Higher gas prices contribute to inflation, which could force the Bank of Canada\u2019s hand on interest rates.<\/p>\n

\u201cWhat gets me worried as an economist is when I see these prices going up and feeding into [the Consumer Price Index],\u201d Gervais said in an interview on Thursday. \u201cIf inflation expectation starts to become the anchor, then monetary policy has to react more. We\u2019ve seen that. We learned that in the pandemic.\u201d<\/p>\n

Gervais noted in his report that the relationship between the Canadian dollar and the price of oil \u201chas weakened in recent years, especially during supply-driven price spikes.\u201d So, if investors turn to the greenback as a safety measure, we shouldn\u2019t expect the loonie to benefit the way it would have historically.<\/p>\n

And while the U.S. has become a net exporter of oil in recent years, the potential inflationary impact could be significant \u2014 enough to force the Federal Reserve to tighten monetary policy.<\/p>\n

\u201cI think now the market is realizing that the conflict is going to take a bit of time,\u201d Gervais told me. By week\u2019s end, it seemed to have dawned on investors that they might be wrong.<\/p>\n

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\"kevinpress-advisor <\/p>\n

Kevin Press<\/p>\n

Kevin Press is editorial director of Advisor.ca. Reach him at kevin@newcom.ca.<\/p>\n","protected":false},"excerpt":{"rendered":"iStock \/ Dan Prat Stock and bond markets took one on the chin this week, amid rising oil…\n","protected":false},"author":2,"featured_media":520063,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[11],"tags":[45,49,48,19675,46,3241,205310,11054],"class_list":["post-520062","post","type-post","status-publish","format-standard","has-post-thumbnail","category-economy","tag-business","tag-ca","tag-canada","tag-capital-markets","tag-economy","tag-oil","tag-penderfund","tag-scotiabank"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/posts\/520062","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/comments?post=520062"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/posts\/520062\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/media\/520063"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/media?parent=520062"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/categories?post=520062"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/tags?post=520062"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}