Oil Continues to Surge

Elena
28 Jul, 2006
New York City

Oil prices moved higher on Friday, on news that OPEC has no power to stop price surges caused by geopolitical tensions. In other Nymex trading Friday, gasoline futures remained steady at $2.2960 a gallon, while heating oil futures rose 0.75 cent to $1.9871 a gallon. Natural gas futures were up 4.5 cents to $7.168 per 1,000 cubic feet.

[R]8:00AM Crude oil prices advanced.[/R]
Oil prices moved higher on Friday, on news that OPEC has no power to stop price surges caused by geopolitical tensions. The ongoing violent conflict in the Middle East also added to fears of possible supply disruptions in the region, as well as a U.S. government report showed a surprising decline in natural gas inventories last week on stronger demand.

Light, sweet crude for September delivery was up 16 cents to $74.750 a barrel in midmorning Asian electronic trading on the Nymex. At London''s ICE Futures exchange, Brent crude for September rose 32 cents to $75.33 a barrel. In other Nymex trading Friday, gasoline futures remained steady at $2.2960 a gallon, while heating oil futures rose 0.75 cent to $1.9871 a gallon. Natural gas futures were up 4.5 cents to $7.168 per 1,000 cubic feet.

Late Thursday, Venezuelan Oil Minister Rafael Ramirez said he would be discussing oil prices with other members of the OPEC in Qatar. He said the limits of worldwide refining capacity and of OPEC members to lift output made it difficult to counteract the surge in prices and suggested that oil prices could reach $100 a barrel ‘given certain factors.’


[R]7:00AM Asian markets closed mixed.[/R]
Asian-Pacific benchmarks finished mixed on Friday in a light trading session, with many traders away for summer holidays. The Japanese Nikkei advanced 1.07% to close up at 15,342.87 points, boosted by stronger-than-expected earnings from leading tech companies. The strength in the tech sector was contributed by Sony Corp., up 4.1%, Canon Inc., up 1.3%, and NEC, surging 5.6%. Across the region, Hong Kong’s Hang Seng gained 0.23%, with China Mobile rising 3.3%. South Korea’s Kospi ended almost flat as profit taking in the automotive sector offset earlier gains. The index edged up 0.1%. Taiwan’s Weighted Index closed up 0.3%, lifted by construction-related companies and electronic firms. Australia’s index declined 0.88%.


European stocks pulled back at mid-day trading Friday, dragged by surging oil prices and concerns about U.S. economy. Strong crude oil prices of $74.72 a barrel hurt airline companies like Lufthansa and British Airways. Resource stocks like Rio Tinto and Anglo American also moved to the downside. Among European movers German supermarket chain Metro gained d 2.3% after it agreed to buy the German operations of Wal-Mart Stores Inc. U.K. insurance company Prudential dropped 2.9% due to a first-half loss for its internet banking operation, Egg. The German DAX 30 lost 0.2%, followed by the French CAC 40 and London FTSE 100 which also fell 0.2%.