Bulk oil prices surge

Townsville Bulletin - - Investor -

OIL prices have surged on grow­ing concern about a wave of in­sta­bil­ity across the Mid­dle East and North Africa, send­ing stock mar­kets tum­bling af­ter a poor session on Wall St.

New York’s bench­mark crude oil fu­tures con­tract shot back above $ US100 a bar­rel in Asian trade, to $ 100.22 in late morn­ing, hav­ing crossed the psy­cho­log­i­cal thresh­old last week for the first time since Oc­to­ber 2008.

Brent North Sea crude for de­liv­ery in April was up 58 cents at $ 116.00, hav­ing hit $ 120 last week.

Prices of safe-haven gold were also high, open­ing at $ 1429.50-$ 1430.50 an ounce in Hong Kong, af­ter strik­ing a new record on the Lon­don Bul­lion Mar­ket of $ 1434.50.

On the stock mar­kets Tokyo’s Nikkei dived 2.2 per cent, Shang­hai’s Com­pos­ite was off .74 per cent and Hong Kong’s Hang Seng fell 1.77 per cent by the break.

Syd­ney’s S& P/ ASX 2 0 0 ended .48 per cent, or 23.2 points, lower at 4803.2.

John Mil­roy, a wealth in­vest­ment ad­viser at Mac­quarie in Syd­ney, said po­lit­i­cal pres­sures ap­peared to be ris­ing in the Mid­dle East, with Libya still in tur­moil and re­newed un­rest seen on the streets of Tehran on Tues­day.

‘‘ The sell­ing has been fairly in­dis­crim­i­nate con­sid­er­ing that even the oil stocks have c o me underpressure,’’ Mil­roy told Dow Jones Newswires. Kazuhiro Taka­hashi, an in­vest­ment strate­gist at Daiwa Se­cu­ri­ties Cap­i­tal Mar­kets, said: ‘‘The mar­ket is closely watch­ing if tur­bu­lence spreads to Iran’’, the world’s fourth largest oil pro­ducer.

Mar­kets were partly re­spond­ing to Wall St, where sen­ti­ment was dented by com­ments from Fed­eral Re­serve chief Ben Bernanke.

He said ris­ing oil and other com­mod­ity prices could threaten US eco­nomic re­cov­ery, al­though he added that such rises were likely to be tem­po­rary and the Fed would re­spond if nec­es­sary to keep re­cov­ery on track.

The Dow Jones In­dus­trial Av­er­age fell 1.38 per cent, the S&P 500 in­dex dropped 1.57 per cent and the tech­fo­cused Nas­daq fell 1.61 per cent. In Asia, high oil prices were seen as pos­i­tive for Chinese and other oil com­pa­nies.

Traders on the main­land and in Hong Kong were also adopt­ing a cau­tious attitude ahead of the an­nual meet­ing of China’s Na­tional Peo­ple’s Congress, start­ing on Satur­day, for signs of any changes in pol­icy direc­tion.

Aus­tralian stocks also weak­ened af­ter GDP growth for the Oc­to­ber-De­cem­ber quar­ter came in at .7 per cent, com­pared with ex­pec­ta­tions of .8 per cent.

UN­CER­TAIN TIMES: Libya’s state of un­rest is caus­ing gen­eral in­sa­tia­bil­ity in the mar­kets

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