Bulk oil prices surge
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