TORONTO (Reuters) - The Toronto Stock Exchange’s main index ended sharply higher Tuesday as shares of energy companies rose along with the price of oil, while take-over talk in the aluminium industry boosted Alcan Incorporated and mining stocks.The Toronto Stock Exchange S&P/TSX composite index closed up 131.22 points, or one percent, at 13,171.76.

“The market, after a few days of a tough period, was looking for an excuse to be a little bit buoyant,” said Michael Sprung, president at Sprung & Co. Investment Counsel.

“Perhaps we saw a lot of the cash that was sitting on the sidelines begin to come into the market.”

U.S. crude climbed more than two percent to above $59 a barrel as the International Energy Agency boosted its 2007 demand forecast and predicted oil market fundamentals would tighten, sending energy shares up 1.4 percent.

Among oil shares, EnCana jumped C$1.25, or 2.2 percent, to C$57.34, while Suncor Energy rose C$2.16, or 2.6 percent, to C$86.59.

“The supply-demand situation continues to be tight and even a slight increase in global demand can have a positive effect on crude oil prices and that’s precisely what’s happening today,” said Elvis Picardo, chief market strategist at Global Securities, in Vancouver.

All but two of the TSX index’s 10 main groups were higher, with the heavyweight materials sector up 2.1 percent. The consumer discretionary and utilities groups lost ground.

Aluminium producer Alcan rose C$2.65, or 4.3 percent, to C$63.90 on a report that rival producer Alcoa Inc. may be the target of a take-over attempt.