Oil, shares set for nervous weekgreenspun.com : LUSENET : Grassroots Information Coordination Center (GICC) : One Thread
Sunday, 15 October, 2000, 12:18 GMT 13:18 UK Oil, shares set for nervous week
Global stock and oil markets are expected to remain turbulent in the week ahead. News that the Organisation of Petroleum Exporting Countries (OPEC) may increase oil production before its next meeting on 12 November may help trigger a drop in the oil price.
Last week, the oil price surged - triggering a sell-off in global shares - as violence in the Middle East sparked fears that oil supplies may be interrupted.
Most stock markets recovered some of their losses on Friday, but the extreme volatility witnessed is expected to continue in the week ahead.
Oil prices also retreated on Friday. In London, the price of the world benchmark Brent crude for November delivery closed at $32.60 a barrel, down $1.99 after earlier spiking to more than $35 a barrel.
Saudi Arabia's oil minister Ali al-Naimi said on Sunday that Opec was concerned about high oil prices and may increase production before its meeting on 12 November.
"Everything is possible, even before the meeting. This depends on the price," Saudi Arabia's oil minister Ali al-Naimi said.
"Our aim is to get an average price of $25 a barrel," he told an energy conference in the United Arab Emirates.
Other ministers however warned that Opec must not rush to raise output, stressing that the rise in oil prices was linked to the violence in the Middle East not global output.
The mixed messages emerging from oil producers are likely to inject more nerves into markets already charged with adrenalin.
US financial markets rebounded strongly on Friday, led by a spectacular surge in technology stock prices.
The technology-dominated Nasdaq composite index leapt 242.09 points, or 7.87%, to end at 3,316.77, registering its second-largest percentage gain in a day ever.
The recovery fed through to UK, French and German markets, which all ended higher on the day.
However, analysts cautioned that Friday's recovery was likely to be a technical correction after Thursday's losses rather than the start of any sustained strengthening.
US markets will also have to contend with fresh economic data this week, including the consumer price report.
Concern is likely to remain about fresh outbreaks of violence in the Middle East as well as the struggling single European currency - the euro - which remained sunk at $0.8562 when currency markets closed in New York.
On Thursday, the Nasdaq index closed at its lowest level for almost a year.
Then, investors had been put off by the high price of oil, profit warnings and euro weakness.
-- Martin Thompson (email@example.com), October 15, 2000