CTV: Oil prices climb as Libyan official warns of $130 crude
Oil prices climbed again today as a Libyan oil executive warned crude could hit $130 (U.S.) a barrel as the violence escalates.
Shokri Ghanem, chairman of the country's National Oil Corp., told Reuters in an interview that production has dropped in Libya to between 700,000 and 750,000 barrels a day from its normal 1.6 million. Companies have suspended operations and foreign workers have fled the country.
Overseas stock markets sank this morning amid continuing concern over the turmoil in the Middle East and North Africa, and its impact on oil prices.
Tokyo’s benchmark Nikkei fell 2.4 per cent, while Hong Kong’s Hang Seng lost 1.5 per cent and the Shanghai composite 0.2 per cent. In Europe, London’s FTSE 100, Germany’s DAX and the Paris CAC 40 were down by between 0.7 per cent and 1.1 per cent by about 6:30 a.m. ET. Dow Jones industrial average and S&P 500 futures were up, but only marginally.
“Rising oil prices on both sides of the Atlantic continue to drive safe haven capital flows with the Swiss franc and gold and silver being the main beneficiaries,” said CMC Markets analyst Michael Hewson. “Gold made a new all-time high overnight, while silver made new 30-year highs as fears about unrest spreading to Iran amongst others, rattled markets.”
Added BMO Nesbitt Burns economist Robert Kavcic: "Markets are mixed this morning with European equities under heavy pressure, playing catch up with yesterday’s sell-off in North America, but U.S. futures point to a steady open. Oil prices are firm again, with [West Texas Intermediate] now sitting at $99.90 after pushing through the $100 level at one point overnight, while gold is steady at $1,433. Treasuries are slightly weaker with the 10-year yield inching up to 3.42 per cent, while the C$ is still down from yesterday’s pre-[Bank of Canada announcement] level—it’s currently sitting above parity at US$1.0255."
Oil rises as Libya warns of $130 crude
Governments move against Gadhafi
Governments around the world are scrambling to freeze the billions of dollars of assets of the Gadhafi regime, and have ordered monetary authorities to be on the lookout for suspicious transactions as the violence in Libya escalates.
The U.S. Treasury Department, for example, said yesterday it has seized at least $30-billion (U.S.) in Libyan assets under an order issued by President Barack Obama to seize the holdings of Moammar Gadhafi and four of his children, and those of the government and agencies that include the central bank and the country’s sovereign wealth funds.
“These U.S. efforts come alongside a series of recent actions by the international community,” said David Cohen, the Acting Under Secretary for Terrorism and Financial Intelligence, citing a UN Security Council resolution to freeze such assets.
“We believe that substantial additional Libyan state-owned assets may be located outside the United States, particularly in Europe,” Mr. Cohen added. “We further believe that Moammar Gadhafi and other family members designated by the United Nations Security Council may continue to exercise control over Libyan state-owned assets. Accordingly, as a matter of compliance with the UN Security Council’s Resolution and as a means of preventing Gadhafi from diverting state assets towards illicit ends, we would urge global financial institutions to freeze all Government of Libya assets, including accounts held by the Central Bank of Libya and the Libyan Investment Authority.”
In Canada, Ottawa also urged the banks to watch closely for transactions involving funds from Libya, Egypt and Tunisia. Canada has already frozen $2.3-billion (Canadian) in assets in the wake of the sanctions against the Gadhafi regime, The Globe and Mail’s Campbell Clark, Tara Perkins and Grant Robertson report today.
Banks told to scrutinize Egyptian, Tunisian and Libyan transactions
Kleptocrats: The dictators' guide to amassing wealth
Egypt, Tunisia assets already frozen
What’s the difference between a ruling despot and an ousted despot? Whether or not the Swiss freeze your money.
After Egyptian leader Hosni Mubarak was ousted, the Swiss froze his family assets.
Switzerland rightly froze the assets of the former Egyptian and Tunisian regimes to protect them for legitimate successor governments, but there remains something troubling about the fact that it takes a revolution against oppressive regimes before countries and bankers will take any steps.
Buffett orders big from Bombardier
Warren Buffett is giving a boost to Canada's Bombardier Inc. .
Mr. Buffett's NetJets Inc. has struck a deal to order up to 120 jets from Bombardier for $6.7-billion (U.S.) - that's a firm order for 50 and options on another 70 - in the biggest sale ever for the aircraft manufacturer.
"You’ll have to wait until May to see it, but the new order book for Canadian manufacturing will advance on today’s news that Montreal-based Bombardier is the winner behind an order for up to 120 plans by NetJets Inc.," said Scotia Capital economists Derek Holt and Gorica Djeric.
National Bank Financial analyst Cameron Doerksen boosted his stock price target to $7.50 from $7 after the deal was announced.
"This is the first time NetJets, the largest fractional jet operator in the world with a fleet of over 800 planes, has ever ordered jets from Bombardier," he said. "It is a strong endorsement of Bombardier’s global family of high-end business jets."
Bombardier lands its biggest business jet order with Warren Buffett's NetJets
Analysts boost BMO
Analysts are boosting their price target on shares of Bank of Montreal after its first-quarter earnings yesterday and its decision to scale back an equity issue to $400-million from $800-million related to its proposed acquisition of U.S. bank Marshall & Ilsley Corp.
Desjardins Securities analyst Michael Goldberg pushed up his target to $70 from $68, while UBS Securities Canada analyst Peter Rozenberg boosted his to $66 from $65.
"We see BMO making good progress in its current operations and view the MI acquisition as a positive, significantly strengthening its U.S. P&C banking franchise," Mr. Goldberg said.
Added Mr. Rozenberg: "Overall, we viewed the results positively consistent with moderate growth, improving credit trends, and higher, but more uncertain capital market revenues, due to a cyclical rebound."
BMO to slash share offering in half
Hearings on TMX-LSE deal to begin
The Ontario government today begins hearings into the blockbuster deal between TMX Group Inc. and London Stock Exchange Group Inc.
Streetwise columnist Boyd Erman will be tweeting from the hearing in Toronto, where the province's finance minister, Dwight Duncan, has raised questions over the merger.
Boyd Erman's Morning Meeting
GMP Capital Inc. reported a 39-per-cent jump in fourth-quarter revenue as capital markets set a record. Profit almost doubled, enabling GMP to boost its dividend by a third to 8 cents a share per quarter, Streetwise columnist Boyd Erman reports today.
