Oil Stocks Pressure Europe

Ivaylo
17 Nov, 2006
New York City

European stocks fell after crude prices plunged to their lowest levels in nearly a year overnight on forecasts of a mild winter in the northern hemisphere. Hopes of a mild winter, together with indications that the US is well supplied with oil, made benchmark crude prices end lower overnight which pressed European oil stocks down. By mid morning, the FTSE 100 in London was 0.2% lower, Frankfurt Xetra Dax gained 0.1%, and the CAC 40 in Paris lost 0.4%.

[R]6:30AM European markets dropped in early trading Friday on weak oil shares.[/R]
European markets were lower in early trading on Friday. By mid morning, the FTSE 100 in London was 0.2% lower to 6,239.8, Frankfurt Xetra Dax gained 0.1% to 6,449.23, and the CAC 40 in Paris lost 0.4% to 5,483.12.

Decliners

Oil stocks led the decliners on Friday. Norsk Hydro fell 4.1%, while domestic rival Statoil shed 4.1%. Finnish refiner Neste Oil was down 2.1%, Repsol of Spain lost 2%, while French Total fell 1.9%.

Advancers

Richemont, the Swiss luxury goods group, gained 2.8% after reporting a better-than-expected 22% rise in first-half net profit, thanks to growth in demand for expensive watches. The company said it was confident that full-year results would be significantly ahead of last year.

French luxury goods maker Hermes International gained 3.7%. German chipmaker Infineon gained 1.8% after ABN Amro raised its rating on the company from hold to buy and lifted its price target. Hypo Real Estate, the German property lender, gained 2.1% after West LB raised its price target on the stock from add to buy.

Oil and gold

Oil declined $56 on Friday to its lowest level in a year. U.S. crude was down 76 cents at $55.50 a barrel. London Brent crude was 48 cents lower at $58.06.

Gold opened Friday at a bid price of $617.80 a troy ounce, down from $624.40 late Thursday.

Currencies

The euro edged slightly down against the dollar Friday on positive economic news from the United States. The euro bought $1.2776 in late morning European trading, compared with $1.2795 in New York late Thursday. The British pound slipped to $1.8848 from $1.8882. The dollar was up against the Japanese yen, buying 118.35 yen from 118.19 yen on Thursday.

[R]5:00AM Gold and copper futures declined on Thursday on profit-taking.[/R]
December gold lost $2.10 to settle at $621.70 a troy ounce on the NYME. December silver finished unchanged at $12.945. January platinum gained $18.50 to end at $1,189.30 an ounce, down from a peak of $1,199. December palladium advanced $3.45 to close at $322.25 an ounce. Most-active December copper slipped 5.35 cents to end at $3.0410 per pound, after dipping to a fresh 4 1/2-month low of $3.0305.

Crude oil futures on the NYME plunged to a one-year low. The front-month December light, sweet crude contract closed down $2.50 at $56.26 a barrel. December heating oil lost 3.19 cents to $1.6605 a gallon and December gasoline settled down 5.25 cents at $1.5296 a gallon. December natural gas dipped 36.5 cents to end at $7.755 a million British thermal units.

On the New York Board of Trade, December Arabica coffee futures moved 1.65 cents lower to close at $1.1650 a pound, after reaching a seven-month high of $1.2020 a pound. March futures on raw sugar in foreign ports settled 0.26 cent lower at 11.53 cents a pound.