NEW YORK: Oil jumped more than 3 percent to over $47 a barrel yesterday on speculation producer group OPEC may cut output again and a naval incident between the United States and China, the world’s top oil consumers.
US crude rose $1.65 to $47.17 a barrel by 1743 GMT. London Brent crude fell 9 cents to $44.76 a barrel. Crude prices have dropped from record highs over $147 a barrel hit in July as the economic crisis crimps demand. The Organization of Petroleum Exporting Countries agreed a series of deep cuts last year in an effort to stem the fall, and next meets on March 15 to set output policy again.
OPEC Secretary-General Abdullah El-Badri said the 12-member producer group would consider reducing output again at the meeting. “All options are on the table,” he told reporters in Qatar when asked if OPEC, which pumps more than a third of the world’s oil, would announce another reduction.
Meanwhile, fears of a global recession and persistent concerns about the banking sector lifted the US dollar yesterday as global stocks mostly faltered. In Europe, financials took the most points off the FTSEurofirst 300 index of top European shares as investors continued to flee the financial sector.
In Asia, Japan’s Nikkei average closed at a 26-year low, finishing down 1.2 percent, and other Asian markets slipped on worries about the fate of General Motors and US banks. Struggling British bank HSBC Holdings PLC has plunged more than 24 percent to its worst close in nearly 14 years in Hong Kong as investors dumped the stock ahead of its offering of new shares to raise billions in fresh capital. Shares fell 24.1 percent to close at 33 Hong Kong dollars. The dollar was up against a basket of major trading-partner currencies, with the US Dollar Index up 0.53 percent.
The euro fell 0.12 percent at $1.2625, while against the yen, the dollar rose 0.50 percent at 98.86.
After 1 p.m., the Dow Jones Industrial Average was down 62.76 points, or 0.95 percent, at 6,564.18. The Standard & Poor’s 500 Index was down 4.35 points, or 0.64 percent, at 679.03. The Nasdaq Composite Index was down 18.56 points, or 1.43 percent, at 1,275.29.
