Oil Rises on Mid-East

Elena
18 Jul, 2006
New York City

Oil prices rebounded Tuesday, recovering from a steep decline yesterday as ongoing fighting in the Mideast added more tension to the already jittery market. U.S. inventory figures were also awaited with expectations of drops in gasoline supplies and a slight increase in crude levels.

[R]8:00AM Oil prices rebounded amid the ongoing Mideast conflict.[/R]
Oil prices rebounded Tuesday, recovering from a steep decline yesterday as ongoing fighting in the Mideast added more tension to the already jittery market. The conflict built on persistent market concerns about the West''s nuclear standoff with Iran, threats of supply disruptions in Nigeria and the Gulf of Mexico hurricane season. U.S. inventory figures were also awaited with expectations of drops in gasoline supplies and a slight increase in crude levels.

Light, sweet crude for August delivery on the Nymex rose 37 cents to $75.67 a barrel in electronic trading by midday in Europe. September Brent crude futures on London''s ICE Futures exchange rose 17 cents to $76.09 a barrel. Gasoline and heating oil futures rose more than 2 cents to $2.299 and $2.030 a gallon, respectively, on Tuesday. Natural gas futures were essentially flat at $5.780 per 1,000 cubic feet.


[R]7:00AM Asian markets closed in the red. The Nikkei dropped 2.75%[/R]
Asian-Pacific benchmarks finished in the red as modest U.S. gains overnight and retreating oil failed to prevent the heavy sell-off. The ongoing violent conflict in the Middle East also weighed on sentiment. Stock exchanges in Japan and South Korea reopened after a national holiday to close sharply lower following Monday session of broad decline. The Nikkei dropped for a fifth consecutive session, down 2.75%. The leading losers were blue-chip exporters, with Toyota Motor losing 2.6%, Sony Corp. falling 3.6%, Mitsubishi Motor slipping 4.04%, and Softbank, down 6.27%. South Korea''s Kospi tumbled 1.73%. Hong Kong’s Hang Seng lost 0.13%, with some telecom stocks falling down. Singapore’s Straits Times followed suit to close down 0.98%, while Australia’s benchmark lost 0.66%. China’s Shanghai Composite edged up 0.08% reflecting upbeat GDP data, showing 11.3% economic growth in the second quarter. Oil stocks dropped, with China’s largest oil company CNOOC falling 0.8% and oil refiner Sinopec, down 1.18%.


European stocks slightly advanced at mid-day trading, benefiting from improved guidance at Heineken, which helped offset some losses amid the ongoing Mideast fighting. The shares of the brewer rose 3.3% in Amsterdam after the company lifted its 2006 profit outlook. Among declining stocks, a notable loser was the French IT services group Atos Origin, which dropped 16.7% on revenue warning for the full year. U.K. online gaming stocks sharply dropped for a second straight session, with Party Gaming down 6.8%, and Sportingbet slipping 21.2%. A downbeat update from peer Empire Online also added pressure, with the stock falling 8%. The German DAX 30 added 0.2%, the French CAC 400 advanced 0.2%, while London FTSE 100 added a fraction of a percentage point at 5,701.