Oil Prices Retreat

Elena
21 Jul, 2006
New York City

Crude oil prices declined Friday morning, following comments by the U.S. Federal Reserve Chairman Bernanke that surging oil prices have negative effect both on economic growth and inflation. Oil prices have retreated from recent highs after data showed an increase in U.S. petroleum inventories last week, but there are still lingering concerns about the Middle East crisis.

[R]8:00AM Oil prices declined Friday morning.[/R]
Crude oil prices declined Friday morning, following comments by the U.S. Federal Reserve Chairman Bernanke that ‘the increase in energy prices is clearly making the economy worse off both in terms of real activity and in terms of inflation. There is no question about it.’

Light, sweet crude for September delivery slipped 18 cents to $74.09 a barrel in Asian electronic trading on the Nymex. Gasoline futures Friday rose slightly to $2.2485 a gallon, while heating oil prices were slightly up to $1.9369 a gallon. Natural gas futures dropped 19.8 cents to $5.893 per 1,000 cubic feet. September Brent on London''s ICE Futures exchange was down 32 cents to US$73.40 per barrel.

Oil prices have retreated from recent highs after data showed that U.S. petroleum inventories grew across the board last week, but there are still lingering worries about the Middle East crisis. The fighting between Israel and militants in Lebanon that started last week lifted crude futures to a record $78.40 last Friday, on fears that the fighting would escalate into a regional war and disrupt supplies.


[R]7:00AM Asian markets closed in the red. The Nikkei lost ground.[/R]
Asian-Pacific benchmarks sharply reversed from yesterday’s strong rally due to a heavy sell-off on profit taking. Negative sentiment was also generated by lower close on Wall Street, following disappointing quarterly results from Intel Corp. and weaker manufacturing data. The Nikkei rebounded from 3.1% advance Thursday to close down 0.84%, with notable weakness in property shares-Mitsubishi Estate off by 2.4% and Sumitomo Realty & Development, down 1.7%. Among other losing stocks, Softbank lost 3%, Yahoo Japan declined 2%, and Toyota Motor lost 0.7%. Across the region, Hong Kong’s Hang Seng finished down 0.27%, South Korea’s Kospi lost 0.1%, and Australia’s benchmark slid 0.72%. China’s Shanghai Composite rose 0.6%, led by financial stocks, benefiting from strength of the yuan against the dollar.

European stocks moved lower at mid-day trading Friday, reflecting weaker U.S. markets close overnight and disappointing earnings reports from heavyweights in the tech sector. Following disappointing quarterly results from Intel Corp., European tech stocks came under pressure after German chip maker Infineon Technologies dropped 4% on 23% revenue growth but 1% drop on a sequential basis. Swedish telecom equipment maker Ericsson also contributed to the weakness in the sector, falling 0.9% on Q2 profit decrease, despite improved sales. Online poker operator PartyGaming advanced 0.9% on Q2 revenue jump by 49%. The German DAX 30 slipped 0.3%, the French CAC 40 declined 0.2%, and London FTSE 100 dropped 0.3%.