The S&P/TSX composite index edged up 3.09 points to 14,312.5 while U.S. markets were shuttered for the Martin Luther King Jr. holiday.
The Canadian dollar advanced 0.14 of a cent to 83.7 cents US ahead of the Bank of Canada's announcement on interest rates on Wednesday.
The TSX energy sector declined 1.6 per cent and oil prices fell in electronic trading in New York after JPMorgan Chase became the latest financial institution to slash its oil price forecast for 2015.
The bank said Monday that Brent crude — a global benchmark for oil — will average out at US$49 a barrel, well down from its previous forecast of $82 a barrel. JPMorgan Chase expects to see a U-shaped recovery in oil prices, rising to $90 a barrel in 2019.
"We've seen five years into this recovery it's been a demand story. We're now starting to see the supply side come into it, which has obviously pushed prices lower," said Craig Fehr, Canadian markets specialist at Edward Jones in St. Louis.
"One of the continuing challenges for investors is to find or feel out this new equilibrium price for oil."
Late Monday afternoon, the February crude oil contract in New York dropped $1.17 to US$47.52.
Oil has plunged 55 per cent from the highs of June 2014 and is down 40 per cent just since the end of November after OPEC refused to cut production levels to support prices.
Meanwhile, oilpatch companies continue to react to the collapse in oil prices.
CanElson Drilling Inc. (TSX:CDI) shares gave back 17 cents or 4.3 per cent to C$3.78 as the company said it will reduce its quarterly dividend by 50 per cent to three cents and reduce its capital budget by 80 per cent to $12.9 million
The base metals sector led advancers, up 0.8 per cent even as copper fell amid speculation about how the Chinese economy fared in the latest quarter. China is expected to report Tuesday that economic growth slowed to an annual 7.2 per cent rate from 7.3 per cent in the prior quarter.
Fehr said there is the potential for a lower number, but the end result is the same.
"If it is seven, 7.1, 7.2, it's kind of splitting hairs — the result is the Chinese economy continues to slow down its growth rate and that’s probably not a trend that is going to subside or reverse any time soon."
The gain in the metals sector followed a 15 per cent plunge last week after copper at one point fell below US$2.50 a pound and the World Bank revised downward its economic growth forecast. On Monday, the March copper contract in New York was down four cents in electronic trading to US$2.57 a pound.
The gold sector rose 0.5 per cent while the February bullion contract added 30 cents to US$1,277.20 an ounce.
Goldcorp Inc. (TSX:G) has offered to buy full control of Probe Mines Ltd. (TSXV:PRB) and its Borden gold project near Chapleau, Ont., in a friendly, all-stock takeover valued at $526 million. Goldcorp currently owns about 9.3 per cent of Probe. Its shares were up 18 cents to $28.67 while Probe was up 50.6 per cent at $5.06.