Oil Futures Surge as Unrest in Libya Spreads, European Markets Fall

Bikram Pandey
21 Feb, 2011
New York City

Oil moved in focus as the popular uprising takes a serious turn in Libya, Yemen and Iran. Oil companies began to evacuate non-essential staff. Futures of crude oil surged as much as 4.8% and European indexes declined on the growing worries that supplies from Libya could be interrupted in the region.

[R]3:00 PM New York – Oil moved in focus as the popular uprising takes a serious turn in Libya, Yemen and Iran. Oil companies began to evacuate non-essential staff. Futures of crude oil surged as much as 4.8% and European indexes declined on the growing worries that supplies from Libya could be interrupted in the region.[/R]

Stocks in Europe declined as unrest and tensions reach at a new high in Libya. Oil futures rose sharply in London trading.

The Middle East unrest spread to Libya and Morocco and oil companies began to evacuate non-essential staff from Libya. New York Crude oil futures in European trading surged as much as 4.5% to $90.10 and Brent crude in London soared $2.20 to $104.81a barrel.

Monday lived up to its reputation and BP Plc and India based oil giant Reliance Industries announced a $7.2 billion deal.

BP plc said it would acquire interests in 23 oil and gas blocks of Reliance Industries Ltd., India''s largest private sector company, for an aggregate consideration of $7.2 billion plus completion adjustments. BP will also form a joint venture with Reliance to source and market gas in India.

Under the partnership, BP would take a 30% stake in 23 oil and gas production sharing contracts that Reliance operates in India, including the producing KG-D6 block.

The European indexes fell on escalating unrest in the Middle East. Euro area private sector activity strengthened and German business confidence improved in February. Canada-based Nordion divested Belgian operations. Merck revenues rose and TNT net surged.

The UK indexes slid on civil unrest in Libya. Home prices surged 3.1% in February. Diageo agreed to acquire Turkey-based Mey Icki for £1.3 billion. Shell agreed to sell African downstream business for $1 billion.

Stocks in Japan advanced as tensions in the Mideast rise and central bankers and finance ministers struggle to devise scorecard to prevent next financial crisis. Stocks in Tokyo rose for the sixth day in a row and climbed 2%. Softbank led the gainers after its China social networking affiliate plan a listing to raise $500 million.

China indexes closed higher despite the increase in bank reserve ratios over the weekend. China lifted fuel prices for the first time in the year. Banks and airlines declined. The Shanghai index rose 1.1% and the Shenzhen benchmark index gained 2.1%.

Stocks in Mumbai surged on the expectations of growth oriented budget and higher incentives for export oriented industries. The Sensex index added 1.2% and gold rallied for the seventh day in a row. Steel Authority plans to invest $12 billion to build four overseas steel plants.

Stocks in Australia traded lower on the rising tensions in the Middle East and China increase reserve requirements. West Australia agreed to acquire Seven Group for $4.1 billion to create the largest locally based media company. Woodside net rose and BlueScope net loss doubled.