Oil Stocks Overshadow Tech Gains

Ivaylo
23 Oct, 2006
New York City

Crude oil prices shed more than 1% on commodities exchanges, despite comments that Saudi Arabia was ready to join other OPEC members in production cuts. This news weakened the energy sector but was good news however, for European airlines and other heavy users of petroleum products. The FTSE 100 in London shed 0.1%, while Frankfurt Xetra Dax remained marginally higher at 6,207.22 and the CAC 40 in Paris fell 0.1%.

[R]6:30 AM Falling oil stocks push European markets lower despite tech gains.[/R]
European markets were lower by mid morning on Monday. The FTSE 100 in London shed 0.1% to 6,150.8, while Frankfurt Xetra Dax remained marginally higher at 6,207.22 and the CAC 40 in Paris fell 0.1% to 5,372.91.

Decliners

Oil stocks were lower on Monday. Finnish refiner Neste Oil lost 3.5%, Norsk Hydro was off 2.7% and Repsol of Spain was down 1.3%.

Advancers

Airlines advanced on falling oil prices. German carrier Lufthansa gained 2%, British Airways added 2%. Akzo Nobel, the chemicals and drugs group, gained 1.1% despite a downgrade by ING.

Technology shares also gained. SAP in Germany was one of the early advancers, up 1%. Banks were led higher by Standard Chartered, after reports it was in the running to take over DBS Group of Singapore. Its shares gained 2.6%. French insurer CNP Assurances added 1.8% after its rating was raised by JPMorgan from neutral to overweight.

The steel sector remained in demand after ThyssenKrupp denied weekend press reports that it was considering a counterbid for Corus, the Anglo-Dutch group which has agreed to be purchased by Tata Steel. Shares in Corus gained 0.1% in Amsterdam, while Thyssen climbed 0.2%.

Oil and gold

Oil trade was range-bound on Monday amid market doubts about a decision by OPEC to cut production. December contracts for light sweet crude oil were up 2 cents at $59.35 a barrel on the NYME. Brent crude futures on London ICE exchange shed 1 cent to $59.67.

Gold traded in London at $588.50 per troy ounce, down from $594.30 late Friday.

Currencies

The U.S. dollar was higher against other major currencies in European trading Monday morning. The euro was quoted at $1.2561, down from $1.2620 late Friday in New York. The British pound traded at $1.8744, down from $1.8843. The dollar bought 119.19 Japanese yen, up from 118.65.

[R]5:00 AM Gold prices declined due to falling demand and dropping oil prices.[/R]
December gold dropped $6.10 to end at $596.40 a troy ounce at the NYME. December silver fell 19.5 cents to close at $11.965 an ounce. October platinum ended the session $12.70 lower at $1,082.10 an ounce while December palladium shed $6.90 to finish at $330.50 an ounce. The most-active December copper contract fell 4.75 cents to settle at $3.4620 per pound.

November light, sweet crude oil settled down $1.68 at $56.82 a barrel after earlier falling to $56.55, the least for the front-month contract since Nov. 30. November heating oil lost 4.01 cents to end at $1.6800 a gallon. November unleaded gasoline settled down 2.22 cents at $1.4672 a gallon. November natural gas settled up 10.9 cents at $7.241 a million British thermal units.

On the New York Board of Trade, December Arabica coffee futures closed 20 points higher at $1.0205 a pound. March futures on raw sugar in foreign ports closed up 0.12 cent at 11.71 cents a pound.