CM: Oil Falls as Global Equities Slide on Persisting Worries; Gold Weaker
Oil is falling in early morning trade as worries about global economic prospects pushed down equities worldwide. Traders will be eyeing the release of the latest weekly crude inventories data from the American Petroleum Institute later in the day, and from the U.S. Department of Energy Wednesday morning.
Gold is lower too as investors sold off the yellow metal to make up for losses in other markets including stocks and currencies as well as oil. Still, persisting concerns about the possibility of a double-dip recession are likely to boost gold in the longer term.
At 0750 ET, Brent crude is down 0.8% at $72.99 a barrel, while light sweet crude is 1.0% lower at $72.36 a barrel, and natural gas is down 0.2% at $4.06 a million British thermal units.
Gold is down 0.7% at $1,220.10 an ounce, while silver is down 0.6% at $17.94 an ounce, and copper is 1.2% lower at $3.27 a pound.
Korea National Oil Corp said that it will not raise its $2.9 billion bid for Dana Petroleum plc (DNX) as the offer reflects the British energy group's value. At a Seoul press conference, Korea National Oil's CEO Kany Young Won said its offer for Dana is final, even though speculation is abound that Dana will try to convince the Korean group to raise its offer in exchange for the approval of Dana's board.
The Wood Group plc ( WG ) is upbeat about the latter half of the fiscal year as oil projects are expected to restart, but it posted a 24% decline in profit for the first six months of the current fiscal year. Still, a backlog of contracts for engineering prospects has led the company to keep its 2010 forecasts.
Indian Oil Corp ( IOC ) and Oil India Ltd (OILI) are in discussion to buy 20% each in Essar group's gas block in Myanmar, according to the Economic Times. The report did not, however, give any financial details or name sources.
In the mining sector, all eyes are on BHP Billiton plc ( BHP ) as the company will be releasing its latest earnings results Wednesday. Analysts are expecting a strong performance from the mining giant, which in turn is expected to bolster its bid for Potash Corp ( POT ).
Meanwhile, shareholders at Lihir Gold Ltd ( LIHR ) have agreed to be taken over by Newcrest Mining Ltd (NCM) for about $8.8 billion. The deal will create the fourth largest gold miner in the world.
