LONDON: Oil prices hit 29-month highs on Thursday, Feb 24 to near $120 a barrel on growing fears that the unrest in Libya could spread to other oil producing countries in the Middle East, threatening to derail global growth.
World stocks and copper prices fell for the fourth straight day as investors cut their risk exposure, while safe-haven gold, Swiss francs and U.S. Treasury prices rose.
Libyan security has cracked down on anti-government protesters and fighting has spread to the capital Tripoli after erupting in Libya's oil-producing east last week with no signs of leader Muammar Gaddafi stepping down after 41 years in power.
"There has been another spike in oil and the general unrest in the Middle East has knocked all the confidence out the market," Mark Priest, senior equities trader at ETX Capital, said. "We cannot see a turnaround unless suddenly the situation is resolved in Libya."
London Brent crude futures rose 5.4 percent to trade above $117 a barrel after touching a 29-month high of $119.79, while U.S. crude futures advanced 3.9 percent to above $101 a barrel.
The surge in oil prices is threatening to put an end to the recovery in the developed economies and add further inflationary pressure in booming emerging countries.
World equities measured by MSCI All-Country World Index dropped 0.5 percent, falling for the fourth day in a row after hitting a 30-month high on Friday. The index is still up 2.2 percent this year.
MSCI emerging markets index lost 1.1 percent to extend the loss for the year to 5.9 percent as investors shift out of developing economies to developed markets on concerns over higher inflation.
Europe's FTSEurofirst 300 index lost 0.7 percent, down for the fourth straight session. In Asia, Japan's Nikkei average fell to a three-week low, down 1.2 percent.
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SHELTERS SOUGHT
The dollar was down 0.6 percent at 0.9273 Swiss francs and 0.6 percent at 81.95 yen, while the euro lost 0.8 percent to 1.2727 francs.
"There is a lot of safe haven demand for the Swiss and the yen but the dollar's downside against these currencies could be limited because for a lasting trend to arise you need U.S. Treasury yields to fall," said Manuel Oliveri, currency strategist at UBS.
Yields on benchmark 10-year U.S. Treasuries eased 4 basis points to 3.4403 percent, down about 33 basis points from a nine-month high hit earlier this month, while those on German Bunds slipped 1 basis points to 3.120 percent.
Gold added 0.3 percent after gaining 0.9 percent in the previous session, though copper eased 1 percent after falling 4.4 percent in the previous three sessions. - Reuters
World stocks and copper prices fell for the fourth straight day as investors cut their risk exposure, while safe-haven gold, Swiss francs and U.S. Treasury prices rose.
Libyan security has cracked down on anti-government protesters and fighting has spread to the capital Tripoli after erupting in Libya's oil-producing east last week with no signs of leader Muammar Gaddafi stepping down after 41 years in power.
"There has been another spike in oil and the general unrest in the Middle East has knocked all the confidence out the market," Mark Priest, senior equities trader at ETX Capital, said. "We cannot see a turnaround unless suddenly the situation is resolved in Libya."
London Brent crude futures rose 5.4 percent to trade above $117 a barrel after touching a 29-month high of $119.79, while U.S. crude futures advanced 3.9 percent to above $101 a barrel.
The surge in oil prices is threatening to put an end to the recovery in the developed economies and add further inflationary pressure in booming emerging countries.
World equities measured by MSCI All-Country World Index dropped 0.5 percent, falling for the fourth day in a row after hitting a 30-month high on Friday. The index is still up 2.2 percent this year.
MSCI emerging markets index lost 1.1 percent to extend the loss for the year to 5.9 percent as investors shift out of developing economies to developed markets on concerns over higher inflation.
Europe's FTSEurofirst 300 index lost 0.7 percent, down for the fourth straight session. In Asia, Japan's Nikkei average fell to a three-week low, down 1.2 percent.
''
SHELTERS SOUGHT
The dollar was down 0.6 percent at 0.9273 Swiss francs and 0.6 percent at 81.95 yen, while the euro lost 0.8 percent to 1.2727 francs.
"There is a lot of safe haven demand for the Swiss and the yen but the dollar's downside against these currencies could be limited because for a lasting trend to arise you need U.S. Treasury yields to fall," said Manuel Oliveri, currency strategist at UBS.
Yields on benchmark 10-year U.S. Treasuries eased 4 basis points to 3.4403 percent, down about 33 basis points from a nine-month high hit earlier this month, while those on German Bunds slipped 1 basis points to 3.120 percent.
Gold added 0.3 percent after gaining 0.9 percent in the previous session, though copper eased 1 percent after falling 4.4 percent in the previous three sessions. - Reuters
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