LONDON, 22 February 2003 — Oil prices surged yesterday after news of a massive blast at an oil and gas facility off Staten Island in New York sparked panic on a market already nervous about the threat of war in Iraq.
The price of reference Brent North Sea crude oil for April delivery rose to as high as $32.50 before easing back to $32.10, up 54 cents from Thursday’s close.
In New York, the price of a barrel of light sweet crude for April delivery hit a peak of $35.95 before settling back slightly to $35.40, still up 66 cents on the day.
“We shot up pretty strongly, more than a dollar a barrel change on the day,” said AG Edwards analyst Bill O’Grady in New York. Reports were unclear about the extent of the disaster, he said.
“If it is in the distribution arm and the refinery is not affected, no big deal, except it does really beg the question: How did this happen?” O’Grady said.
“With the country on an orange-level terror alert, until it is completely clear that this was just an accident and not sabotage or a terrorist strike of some sort, prices are going to remain elevated,” he added.
An ExxonMobil spokeswoman confirmed that the company is the owner of the facility.
GNI trader Paul Goodhew in London said the fire had left the oil market “a little bit panicking.” “The incident will take more oil out of the market,” he said.
News of the blast added to concerns about US oil supplies at a time when crude oil stock levels are at a 27-year low, the United States is preparing for war in Iraq and Venezuelan exports continue to be disrupted by a strike.
Meanwhile, stocks fell sharply yesterday morning after a fuel barge exploded in New York waterways, rattling investors’ nerves, but the market turned positive later on the belief the fire was an accident.
US Coast Guard officials said the facility was owned by ExxonMobil, the world’s largest oil company. Exxon Mobil shares were up 26 cents at $33.89.
The Standard & Poor’s 500 Index was up 8.99 points, or 1.07 percent, at 846.09, having dipped to as low as 831.48. The Dow Jones Industrial Average moved up 83 points, or 1.05 percent, to 7,998 after dropping about 80 points. The NASDAQ Composite Index was up 7.61 points, or 0.57 percent, at 1,338.84, having earlier fallen about 1 percent.
The FTSE 100 closed at 3727.1 points, up 39.9 or 1.08 percent, rising 115.2 points over the week. The DAX index ended at 2648.87 points, up 57.61 or 2.22 percent, 25.59 points lower on the week. The CAC-40 index closed at 2829.83 points, up 25.34 or 0.90 percent, up 2.08 points from last Friday.
The Swiss market index closed at 4228.7 points, up 14.7 or 0.35 percent, a loss of 44.3 points since last week. The All Share Mibtel index closed at 17,120 points, up 234 or 1.39 percent. The index gained 293 points on the week. The AEX index closed at 282.9 points, up 1.29 or 0.46 percent, up 1.43 points from a week ago. The BEL-20 index closed at 1773.13 points, down 10.99 or 0.62 percent, 4.62 points lower on the week.
Asian stock markets were mostly lower in lackluster trading yesterday. The Nikkei-225 average of the Tokyo Stock Exchange dropped 137.38 points to end the day at 8,513.54. In Hong Kong, the key Hang Seng index lost 139.62 points or 1.49 percent to close at 9,250.86.
In Sydney, The All Ordinaries index was down 2.1 points at 2,804.4. In Singapore, the Straits Times Index rose 2.62 points to 1,315.03.
The dollar rallied in late trade yesterday.
The single European currency traded at 1.0792 dollars from 1.0823 late on Thursday in New York. The dollar rose to 118.73 yen from 118.37 on Thursday.
The euro was changing hands at 1.0792 dollars from 1.0813 late on Thursday in New York, 128.16 yen (128.00), 0.6809 pounds (0.6755) and 1.4685 Swiss francs (1.4672).
Gold climbed higher in Europe yesterday .Spot gold was quoted at $352.35/353.10 an ounce at 1506 GMT, up from $352.25/353.00 an ounce at the New York close on Thursday but off a session traded high of $354.50 as the Dow made opening gains.
Dollar weakness in currency markets also helped bullion as the euro rose to its highest in a week against the dollar, propped up by weak US economic data in the previous session.
