02/03/2015 10:59 EST | Updated 04/05/2015 05:59 EDT

TSX surges after oil gains 13% in 3 days

The Toronto stock market shot up nearly 200 points in early trading Tuesday after oil continued the climb that has seen it gain 13 per cent in the last three sessions.

The S&P/TSX composite index was ahead 196 points at mid-morning Tuesday to 15,096, with strong advances by energy and mining companies.

The TSX energy sector was ahead 3.7 per cent after a 4.5 per cent gain on Tuesday.

The Canadian dollar was up 0.14 of a cent US to 79.83 US continuing its upward momentum from Monday.

News of a drop in the number of U.S. oil drilling rigs has spurred hope that the glut of oil might ease in the near future.

West Texas Intermediate, the main North American oil contract traded in New York, rose $1.21 to $50.88 US a barrel. Brent, the most common international oil contract, rose $1.27 to $56.02.

Western Canada Select, the blend of oil coming out of Canadian oilsands producers, was up 99 cents at $38.56 US a barrel.

Oil companies are delivering earnings reports this week, and many have cut their capital spending for 2015.

On Tuesday, British Petroleum reported a loss of $4.4 billion for the fourth quarter of 2014. BP also said it would pull back on investment, reducing capital spending to $20 billion worldwide, down from its previous guidance of $24-26 billion.

Oil investors also were buoyed by news that the U.S. manufacturing sector expanded in January at the same pace as in December, meaning demand for energy products could rise.

The U.S. dollar, which has made its goods more expensive in the rest of the world, slipped 0.5 per cent against a basket of currencies.

U.S. stocks rose broadly on higher oil prices and signs that the new Greek government won't press for a write-off of its bailout loans.

The Dow Jones industrial average rose 158 points to 17,519, the S&P 500 index climbed 14 points to 2,034 and the Nasdaq was up 21 points to 4,697.