Canadian energy stocks including Suncor Energy Inc. may climb along with prices of crude oil.

Gains in the broader market may be limited after a report that U.S. producer prices rose more than forecast in May stoked concern that higher inflation may cause the central bank to raise borrowing costs in Canada's biggest export market.

The Standard & Poor's/TSX Composite Index gained 135.19, or 1 percent, to 13,859.52 yesterday in Toronto. The Canadian benchmark is still 2 percent below its June 4 record, after falling last week on rising bond yields and concern higher global interest rates may reduce profits and stifle takeovers.

Crude oil for July delivery rose 37 cents, or 0.6 percent, to $66.63 a barrel in 8:29 a.m. electronic trading in New York, after a U.S. government report showed refineries cut their operating rates, raising concern fuel supplies may fall short of demand this summer.

Suncor Energy, the world's second-biggest oil-sands producer, may climb 52 cents to C$93.32, based on bids already submitted on the Toronto Stock Exchange. EnCana Corp., Canada's biggest natural gas producer, may add 34 cents to C$67.40, bids indicated.

A measure of energy shares accounts for more than a quarter of the S&P/TSX's value.

Prices paid to U.S. producers increased 0.9 percent in May, the Labor Department said in Washington. Economists forecast prices paid to factories, farmers and other producers would rise 0.6 percent, according to the median of 76 estimates in a Bloomberg News survey.

Inflation Concerns

The report underscores Federal Reserve concerns that inflation won't moderate as forecast, economists said.

The Fed won't change its target for the benchmark overnight lending rate between banks for the rest of the year, according to the median forecast of economists in a Bloomberg News survey this month. Economists in May had predicted a fourth-quarter cut.

Bank of Canada governor David Dodge yesterday signaled that he may raise interest rates to cool the economy.

U.S. and Canadian 10-year government bonds sold off following the inflation report, pushing up yields. Yesterday, U.S. and Canadian stock markets rallied as bond yields eased.

Interest-rate sensitive financial stocks may fall on speculation about higher borrowing costs, which may crimp their earnings and reduce the appeal of their dividends.

Toronto-Dominion Bank, Canada's third-largest lender, may drop 58 cents to C$72.60, bids indicated. Bank of Montreal, the nation's fourth-biggest bank, may slip 8 cnets to C$69.04.

Shares of Crystallex International Corp. may jump 75 cents to C$5. The Canadian company that plans to develop a Venezuela mine that may contain 14 million ounces of gold, said it completed the final step needed to get a permit to develop the deposit.

U.S. Stock-Index Futures

U.S. stock-index futures pared early gains after the producer price report. CBOT Holdings Inc., operator of the Chicago Board of Trade, rose after a report said the Chicago Mercantile Exchange Holdings Inc. will raise its bid for CBOT.

Standard & Poor's 500 Index futures expiring in September added 0.8 to 1531 at 9:01 a.m. in New York. Dow Jones Industrial Average futures increased 5 to 13,610. Nasdaq-100 Index futures advanced 3 to 1940.25.

The following shares may have unusual price changes. Prices are from yesterday's close.

Canfor Corp. (CFP CN): The lumber producer said it will curtail production at some sawmills, a strand board mill and a plywood plant because of ``poor'' market conditions. The production cuts represent about 66.2 million board-feet of lumber, 14 million square feet of oriented strand board and 8.5 million square feet of plywood, Vancouver-based Canfor said today in a statement. The cuts will start June 29. The shares slipped 5 cents, or 0.4 percent, to C$13.35.

CryptoLogic Inc. (CRY CN): The maker of Internet gambling software said in a statement carried on RNS that it has been approved for an additional listing of its shares on the London Stock Exchange. The shares added 28 cents, or 1.1 percent, to C$26.51 in Toronto. They also trade on the Nasdaq stock market.

Finning International Inc. (FTT CN): Speedy Hire Plc, the U.K.'s largest tool-rental company, agreed to buy Finning International's Hewden Tools business for 115 million pounds ($227 million) in cash to add branches and boost its range of drills, scaffolding and generators. Finning shares gained 11 cents, or 0.4 percent, to C$30.11.

Gerdau Ameristeel Corp. (GNA CN): Gerdau SA, Latin America's largest steelmaker, agreed to buy Valley Placers Inc., a Las Vegas- based steel fabricator, for an undisclosed price. The deal will be made through Pacific Coast Steel, a joint venture of Gerdau Ameristeel. The shares added 14 cents, or 0.9 percent, to C$16.28.

MacDonald Dettwiler & Associates Ltd. (MDA CN): The information systems company put its surveillance and space business up for sale, the Wall Street Journal reported, citing people it didn't name who are familiar with the details. Four U.S. defense contractors are interested, though they've expressed resistance to the reported $1 billion asking price, the newspaper said. The four are: Lockheed Martin Corp., Raytheon Co., Northrop Grumman Corp. and Alliant Techsystems Inc., the Journal said.

Neither MacDonald Dettwiler nor the four U.S. companies would comment, the newspaper reported. MacDonald Dettwiler shares added 24 cents, or 0.6 percent, to C$43.90.

Transcontinental Inc. (TCL/A CN): Canada's second-biggest commercial printer by sales is scheduled to report second-quarter earnings. The shares were unchanged at C$20.55.