Source: The Canadian Press

The Toronto stock market could find support from energy stocks at the open as oil prices advanced, bolstered by hopes of rising fuel demand ahead of weekly U.S. inventory figures to be released later in the morning.

The Canadian dollar moved up 0.38 of a cent to 95.75 cents US.

U.S. futures also pointed to a positive open with the Dow Jones industrial futures ahead 38 points to 9,952, the Nasdaq futures were up 5.75 points to 1,797.25 while the S&P 500 futures gained five points to 1,064.2.

The July crude contract on the New York Mercantile Exchange rose 98 cents to US$72.97 a barrel.

Initial inventory data by the American Petroleum Institute on Tuesday showed further substantial drops in crude stocks last week, signalling fuel demand growth, said Victor Shum, an energy analyst at Purvin & Gertz in Singapore.

The market will be watching to see if the more comprehensive Energy Information Administration data due to be released at midmorning confirms the API figures, he said.

Crude is down sharply from around US$87 a barrel from early May, pressured by amid worries of a that demand will be weakened by the European debt crisis, a slowing Chinese economy and renewed doubts about the U.S. economic recovery following disappointing jobs data for May.

Some analysts said oil prices may also spike amid concerns that the hurricane season, along with a drilling moratorium in the Gulf of Mexico due to the BP oil spill, could disrupt production of oil and natural gas in the Gulf.

The TSX could also find support from the mining sector as the July copper contract on the Nymex gained eight cents to US$2.86 a pound.

But gold prices backed away from Tuesday’s record high close with the August bullion contract in New York down $10.90 to US$1,234.70 an ounce.

The euro moved up to US$1.1998. The euro has touched a series of four-year lows in recent days on worries about Europe’s weak growth prospects and the economic effects of deep cuts in public spending announced by major European nations, including Germany and Britain.

Meanwhile, U.S. Federal Reserve Chairman Ben Bernanke is scheduled to testify before the House Budget Committee. He is likely to reiterate his comments from late Monday that the economy is improving, but progress will be slow. His reassurances helped push stocks higher Tuesday.

The Fed is also set to release its beige book report later Wednesday. The report provides a snapshot of regional economic activity. A more positive tone by the Fed, which has been guarded in its assessment of the economy thus far, could provide the impetus to push stocks higher.

In overseas trading, news that China’s stock regulator was considering Agricultural Bank of China’s plans for an initial public offering prompted a rebound in Chinese shares, with the benchmark Shanghai Composite Index advancing 2.8%. The regulator approved the IPO after China’s markets closed.

Hong Kong’s Hang Seng shot up in late trading to finish 0.7% higher and Japan’s benchmark Nikkei 225 stock average finished down 1% to its lowest close since Nov. 30.

Even signs of economic recovery in Japan — its machinery orders rose for a second straight month in April — were not enough to ease investor jitters.

London’s FTSE 100 index was 0.3% higher, Frankfurt’s DAX rose 0.78% while the Paris CAC 40 gained 1.02%.

In corporate news, steel fabricator ADF Group (TSX:DRX) reported that quarterly net income fell to $1.2 million or three cents per share, about half what it was a year earlier as the company felt the impact of client delays of certain projects and the appreciation of Canada’s dollar against the U.S. currency. Revenue declined by $3.2 million to $13.6 million.

Sporting goods retailer Forzani Group Ltd. (TSX:FGL) said Tuesday it narrowed its first-quarter loss as same-store sales grew by 9.8%. Forzani’s loss was $691,000 or two cents per share, compared to $1.1 million or four cents per share a year ago. Revenue was $228.0 million, up from $201.3 million in the first quarter of fiscal 2010.

Grande Cache Coal Corp. (TSX:GCE) saw its fourth-quarter profit fall dramatically, despite higher volumes, as the average price per tonne of coal fell by about two-thirds compared with the same time last year. Its net income dropped to $1.4 million for the three months ended March 31, from $18.9 million a year earlier, even though revenue increased by 31% to $50.8 million.

Western Coal Corp. (TSX:WTN) is offering to exchange common shares for the 45% of Energybuild Group PLC that it doesn’t already own in a deal that values the U.K. company at about C$82.1 million. Energybuild is developing the Aberpergwm mine and anthracite coal reserves in Wales.