Hong Kong: Crude oil prices touched new peaks as its prices rose to 2-1/2 year highs on Monday.
The price hike is apparently due to worries about supply disruption and deepening unrest in Libya, while Asian stocks slipped as concerns about the Middle East and higher energy prices weighed on equities.
Asian markets have see-sawed following volatile oil prices in recent weeks, but the MSCI ex-Japan index .MIAP00000PUS is barely a percent away from a 2-1/2 year peak tested in January, indicating markets have been largely resilient to the Libyan crisis.
Still, investors are worried that a prolonged period of high oil prices could stifle economic growth and erode corporate profits, while adding to inflationary pressures in emerging economies.
On Monday, the MSCI ex-Japan index was down more than half a percent.
U.S. crude oil futures jumped 1.6 percent, topping $106, to the highest price in 2-1/2 years on Monday as a counter-offensive by Libya’s Muammar Gaddafi against rebels deepened concerns that a civil war is brewing in Africa’s largest holder of oil reserves.
ICE Brent crude for April was trading at $117.28 a barrel, up 1.1 percent.
“The concern is that with what we are seeing in Libya, it’s purely fear driving the market,” said Jonathan Barratt, managing director at Commodity Broking Services in Sydney.
“Each time the price moves up a little, people are forced into the market. Once it’s feeding itself, it will continue to rise,” Barratt said, adding $120 may be the peak without further supply disruptions.
A reasonably strong batch of U.S. data on Friday that showed the jobless rate falling to a near two-year low failed to boost sentiment, as investors remained firmly focused on the developments in the Middle East and the resulting longer-term impact on oil.
U.S. crude is up by more than a fifth in the last two weeks.
The spike in oil combined with soaring food prices present fresh problems for central banks in Thailand, Malaysia, South Korea and New Zealand who head for policy meetings this week.
The region is a big importer of oil and market players are worried that sharp increases in prices would stifle growth and fuel inflationary pressures.
Dear TNT Reader,
At The News Tribe, our mission is to bring you free, independent, and unbiased news and content that keeps you informed and empowered. We are committed to upholding the highest standards of journalism, as we understand that we are a platform for truth.
Apart from independent global news coverage, we also commit our unique focus on the Muslim world. In an age marked by the troubling rise of Islamophobia and widespread misrepresentation of Muslims in Western media, we strive to provide accurate and fair coverage.
But to continue doing so, we need your support. Even a small donation of 1$ can make a big difference. Your contribution will help us maintain the quality of our news and counteract the negative narratives that are so prevalent.
Please consider donating today to ensure we can keep delivering the news that matters. Together, we can make a positive impact on the world, and work towards a more inclusive, informed global society.
Donate Monthly Subscription Annual Subscription