Oil Leads Europe Higher

Ivaylo
20 Oct, 2001
New York City

European markets hit new five-year highs in early trading on Friday morning, as companies gained strength from overnight upbeat close on U.S. markets and as oil producers advanced after the OPEC oil cartel agreed on a deeper-than-anticipated production reduction. OPEC agreed on a cut of 1.2 million barrels a day, topping the forecast 1 million barrels. The U.K. FTSE 100 gained 0.44%, the German DAX 30 rose 0.4%, the French CAC 40 advanced 0.5%.

[R]6:30AM European stocks advance on oil cuts and strong overnight U.S. finish.[/R]
European markets were higher by mid-morning on Friday. The U.K. FTSE 100 gained 0.44% at 6,183.30, the German DAX 30 rose 0.4% at 6,204.16, the French CAC 40 advanced 0.5% at 5,384.01.

Advancers

BP and Royal Dutch Shell each advanced 1%, boosted by the unexpected oil production cut by OPEC. Shares of PartyGaming gained 1.6%, following its statement that in the few days since U.S. customers were prevented from accessing the real money sites, average daily gross revenue of the non-U.S. facing business has been 2% below that of the third quarter.

Valeo, a French auto parts maker, also gained after recent slips. Valeo shares jumped 6.8% after it reported that its quarterly profit sank76%. Valeo agreed on a memorandum of understanding to sell its electrical motors and actuators unit for an undisclosed price.

Decliners

Corus Group declined 1.5% as investors were disapponted that it gave its agreement to be bought by Tata Steel for 4.3 billion pounds ($8 billion). Wolfson Microelectronics, a Scottish chipmaker producing chips for the iPod music device of Apple Computer, fell 30% after registering a build-up of inventory in consumer electronics products, leading to a fourth-quarter revenue guidance between $52 million and $57 million.

Oil and gold

Crude oil for November delivery advanced 40 cents to $58.90 a barrel in on the NYME. December Brent crude on London ICE Futures exchange rose 33 cents to $61.20 a barrel.

Gold opened on Friday at a bid price of $600.15 a troy ounce, up from $596.00 late Thursday.

Currencies

The euro was steady against the U.S. dollar Friday, holding onto gains that it made on disappointing U.S. economic data. The euro bought $1.2624 in morning European trading, barely changed from its level of $1.2626 in New York late Thursday. The British pound was unchanged at $1.8777. The dollar rose to 118.32 Japanese yen from 118.15 yen.

[R]5:00AM Gold and silver prices rallied on Thursday, boosted by the oil increase.[/R]
The most-active December gold gained $9.90 to end at $602.50 a troy ounce at the NYME. The most-active December silver contract held onto gains and settled 34 cents higher at $12.16 an ounce. January platinum gained $1.70 to finish at $1,094.80 an ounce, while December palladium edged up $4.90 to close at $337.40 an ounce. The most-active December copper contract rose 1.35 cent to end at $3.5095 per pound.

November light, sweet crude oil settled up 85 cents at $58.50 a barrel. November heating oil advanced 2.42 cents to stop at $1.7201 a gallon. November unleaded gasoline moved up 1.91 cents to close at $1.4894 a gallon. November natural gas settled up 32.5 cents at $7.132 a million British thermal units.

On the New York Board of Trade, December Arabica coffee futures closed 0.40 cent lower at $1.0185 a pound, with March down 0.40 cent at $1.0585. Futures on raw sugar in foreign ports for March finished unchanged at 11.59 cents a pound, with May steady at 11.74 cents.