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Oil moves above $50 a barrel
November 21, 2008
Alex Kennedy
THE ASSOCIATED PRESS
SINGAPORE–Oil prices rose off a three-year low, creeping above $50 a barrel Friday in Asia as investors took a cue from a rebound in regional stock markets.
Light, sweet crude for January delivery was up 80 cents to $50.22 a barrel in electronic trading on the New York Mercantile Exchange by midafternoon in Singapore, after falling to $48.25 earlier in the session, the lowest level since May 18, 2005.
The December contract, which expired Thursday, fell overnight by $4.00 to settle at $49.62.
"Right now, oil is just following stock market sentiment," said Gerard Rigby, an energy analyst at Fuel First Consulting in Sydney.
Asian stock markets initially followed their U.S. counterparts down Friday, but then rallied. Japan's benchmark Nikkei index rose 2.7 per cent, Hong Kong's Hang Seng index gained 2.3 per cent and South Korea's key index was up 5.8 per cent.
Traders are still worried that a global recession will undermine energy demand. Already, oil prices have tumbled by two-thirds from their peak of nearly $150 a barrel in mid-July.
The Dow Jones industrial average fell 5.6 per cent Thursday to its lowest level since March 2003 after the Labor Department said new applications for jobless benefits exceeded analyst estimates and rose to the highest level of claims since July 1992.
The S&P 500 index fell 6.7 per cent Thursday to an 11-year low. The S&P 500 has dropped more than 52 per cent below its October 2007 record, making this the second-biggest bear market on record, exceeded only by the 83 per cent drop between 1930 and 1932.
"$50 was a psychological support level," Rigby said. "Since we haven't traded this low for so long, it's hard to find a new support level."
The Organization of Petroleum Exporting Countries, which accounts for about 40 per cent of global supply, may cut production before its next official meeting on Dec. 17, Rigby said. OPEC President Chakib Khelil has signaled the group may announce output reductions at the meeting, but some members, such as Iran, have called for earlier cuts.
OPEC lowered production quotas by 1.5 million barrels a day last month.
"Their revenues are dropping so much, I think OPEC will have to call an extraordinary meeting and cut quotas to try to support the market," Rigby said. "Their last cut had zero impact on the market."
In other Nymex trading, gasoline futures rose 1.89 cent to $1.03 a gallon. Heating oil gained 1.91 cents to $1.69 a gallon while natural gas for December delivery slid 5.9 cents to $6.26 per 1,000 cubic feet.
In London, December Brent crude fell 68 cents to $47.40 on the ICE Futures exchange.
Friday, November 21, 2008
Oil moves above $50 a barrel
Thursday, November 20, 2008
Second worst day ever for TSX
It was an absolute drubbing in Toronto Thursday, with the mining and financial sectors pushing the S&P/TSX to its second-worst percentage loss in its history.
The S&P/TSX closed down 9.02 per cent, or 765.80 points, to 7,724.76 as the price of oil slid as low as $49.50 (U.S.) a barrel. It's the first time the index has closed below 8,000 since December, 2003.
The market's worst day on record was Black Monday in October of 1987, when the benchmark index fell more than 11 per cent.
The energy subindex was pulled down 14.08 per cent, with heavyweights such as Canadian Natural Resources down 21 per cent, Suncor down 13.9 per cent and Encana off 12.3 per cent.
The financial sector also suffered a double-digit loss, down 12.82 per cent after Toronto-Dominion Bank pre-announced its fourth quarter, and said it would take a $350-million hit on credit trading. Its shares were 12.74 per cent lower. Manulife fell 16.5 per cent, while the Royal Bank was down 11.2 per cent.
The Dow Jones industrial average ended the day down 5.56 per cent, or 444.99 points, to 7,552.29 as the worst unemployment numbers in 12 years and uncertainty about the future of the auto sector acted as drags. The broader S&P 500 was down 6.71 per cent, or 54.14 points, to 752.44.
Citigroup led the losers on the Dow, down almost 25 per cent despite the promise of increased investment by one of the bank's largest shareholders, Saudi prince Prince Alwaleed bin Talal. JP Morgan & Chase & Co was down 15 per cent, while Alcoa traded 13 per cent lower.
Copyright 2001 The Globe and Mail
TSX 500-point drop
TSX 500-point drop midday
DAVID FRIEND
Thursday, November 20, 2008
TORONTO — The Toronto stock market revived from a 500-point tumble Thursday morning but was still showing deep triple-digit losses as mining stocks crumbled and the banking industry revealed more bad news.
The S&P/TSX composite index was down 335.61 points to 8,154.95 at midmorning after going as low as 7,947, down 544 points. That was the first time the benchmark index had been below 8,000 since December 2003, and represented a drop of 47 per cent from the market's peak just five months ago at 15,073.
The Canadian dollar accelerated its slide, losing 2.17 cents to 77.66 cents US, after dropping 1.48 cents Wednesday. The currency traded as low as 77.31 cents.
Toronto financial stocks were down 7 per cent after TD Bank disclosed $350-million in quarterly credit trading losses. Its stock lost $3.49 to $46.44, and all the other big Canadian banks were also sharply lower. Royal Bank lost 8 per cent to $37.95 and CIBC fell 9 per cent to $44.
Metal stocks slid 10.3 per cent. Teck Cominco Ltd. was down 23 per cent to $4.00 after it suspended dividends, slashed capital spending plans by $730-million and sold assets to cut debt taken on for the $14-billion (U.S.) takeover of the Fording Canadian Coal Trust.
Kinross Gold Corp. rose 41 cents to $14.35 (Canadian) on word it is paying $250-million (U.S.) to buy the Lobo-Marte gold site in Chile from Teck Cominco and Anglo American PLC.
The TSX energy sector fell 5.3 per cent as crude oil dipped under the $50-a-barrel mark, reviving slightly in later trade to lose $2.94 at $50.68 a barrel on the New York Mercantile Exchange.
On Wall Street, the Dow Jones industrial average declined 145.76 points to 7,852. The Nasdaq composite was off 20.60 at 1,366 and the S&P 500 shed 19.88 to 787.
A jump in weekly U.S. unemployment claims to a 16-year high was the latest piece of depressing economic data. The Labour Department said applications for jobless benefits rose to a seasonally adjusted 542,000 last week, from a downwardly revised 515,000 in the previous week.
Overseas, Japan's main stock index plummeted 6.9 per cent and other markets were also solidly in the red.
Tokyo's benchmark Nikkei 225 average slid 570.18 points to 7,703.04 as data showed exports in October sank 7.7 per cent, the biggest decline since 2001. The rare trade deficit follows confirmation earlier this week that Japan is in recession. Hong Kong's Hang Seng index fell four per cent.
Losses deepened as the day went on in Europe, with the FTSE 100 index down 4.1 per cent in the afternoon in London.
The German DAX fell 4.5 per cent and the Paris CAC-40 lost 4.6 per cent after French automaker PSA Peugeot Citroen said it will cut 2,700 jobs from its 200,000-person workforce in response to skidding European car sales.
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