|
 The Dow Jones industrial average fell more than 100 points Monday on Wall Street as investors cashed in profits from the market's best week in nearly five years. Meanwhile, the Nikkei 225 stock index fell 0.82 percent in Tokyo on Tuesday and Hong Kong's Hang Seng was down nearly 1 percent in late trade.
Energy investors often view stocks as a proxy for economic growth, and in some recent sessions, movements in the oil market have closely followed that of global equities.
Light, sweet crude for March delivery lost 87 cents to $89.15 a barrel by noon in European electronic trading on the New York Mercantile Exchange.
Brent crude declined 68 cents to $89.79 a barrel on the ICE Futures exchange in London. "The market is in uncertain territory as worries about the economy in the U.S. continue to weigh
-- it's unclear how deep the recession will be, if there is a recession," said Victor Shum, an energy analyst with Purvin & Gertz in Singapore.
"Meanwhile, the market tends to move in tandem with global equities markets."
Oil prices should drop further in the coming weeks as demand diminishes with the end of the Northern Hemisphere winter, Shum said.
"We're entering the shoulder season between the Northern Hemisphere winter, which is ending, and before the U.S. summer driving season ... pricing should soften," he said.
The Schork Report, edited by energy analyst Stephen Schork, said at least one market mover
-- OPEC -- already appeared to have made up its mind about the state of the U.S. economy, with bullish consequences likely.
[to top of second column]
 |
 Noting that the Organization of Petroleum Exporting Countries at its Vienna meeting last week had referred to a "full-blown U.S.
'financial crisis,'" the news letter concluded that "with demand, both seasonal and economic, for crude oil drying up, the odds of a cut when OPEC meets again next month are shortening."
The contract rose $1.06 to settle at $90.02 a barrel on Monday after the U.S. government reported strong data on factory orders, raising hope that the world's largest economy will dodge a recession that would curtail demand for energy.
A temporary closure of the Houston Shipping Channel and a ship channel near Port Arthur, Texas, both key waterways used to transport crude oil to Texas refineries, also pushed prices higher Monday.
Also supporting prices Monday were new reports of violence in northern Iraq and Nigeria. Turkish warplanes bombed 70 Kurdish rebel sites in northern Iraq, while a Nigerian rebel group attacked security forces near a Royal Dutch Shell PLC oil-pumping station, killing three soldiers. Violence in both regions contributed to oil's rise to $100 a barrel earlier this year.
Heating oil and gasoline fell by more than 2 cents to $2.4608 and $2.2893 a gallon (3.8 liters) while gasoline natural gas futures added more than 6 cents to $7.933 per 1,000 cubic feet.
[Associated Press; By GEORGE JAHN]
Associated Press writer Gillian Wong contributed to this report from Singapore
Copyright 2007 The Associated Press. All rights reserved. This
material may not be published, broadcast, rewritten or
redistributed. |
