crude oil

Oil Prices Rise Over Iran and Nigeria Concerns

A slew of factors are sending oil prices above $103/barrel this morning. Tensions have grown between Iran and Western countries over their nuclear program with Iran threatening to close the Strait of Hormuz if its oil exports are impacted by U.S. and European sanctions.

Country wide protests in Nigeria over high fuel prices and government corruption has also sent crude higher today. Nigeria’s oil production appears to have been unaffected, but that could change as unions representing the oil workers have pledged to strike.

An improving U.S. economy will also send oil prices higher as demand will increase. Investors will be watching fourth quarter earnings from major companies starting this week to get a gauge of how well the economy is doing. “Oil feels like a market that wants to head lower but is being precluded by a steady tone to equities, particularly within the U.S. where good economic news continues”, energy analyst Ritterbusch and Associates said in a report.

China is seeing a six percent annual rise in oil imports. There was also a report out of Germany that China has reduced its imports from Iran.

“Because China has recently much reduced its imports from Iran due to disputes over payment, the country will need to source its demand elsewhere, which could drive prices further upward,” said a report from Commerzbank in Frankfurt.

Crude oil for February delivery is currently trading up 1.79% at $103.12.

Stock Index Futures Fall Today as Stocks Face Worst Week in Two Months. Stocks to Watch: NFLX, AAPL, MS, INTC, BAC, SIRI, AA

Stocks are facing their worst week in two months and their second consecutive week of losses as investors are worried about global growth, along with Europe’s debt crisis and the ensuing contagion creeping throughout the euro zone.

S&P 500 futures fell 7.2 points and were below fair value, a formula that evaluates pricing by taking into account interest rates, dividends and time to expiration on the contract. Dow Jones industrial average futures lost 72 points, and Nasdaq 100 futures sank 14.50 points. U.S. stock markets were closed for the Thanksgiving holiday on Thursday and will be open on Friday until 1 p.m. Usually this day is the lightest volume day of the year.

The Dow has shed 539 points in three trading days. The broad S&P 500 is on a six-day losing streak, sliding 7.6% over the period.

European blue chips fell 0.76%, while the euro fell 0.76% to $1.324. The English FTSE 100 slid 0.38% to 5,108 and the German DAX dipped 0.41% to 5,406.

Italy was forced to pay an average yield of 6.5% on a roughly $10.7 billion auction of six-year bonds, far higher than the 3.5% it paid at its October auction, signaling a much higher risk premium. As a result, the yields on its 10-year bond moved even higher above the 7% level. While the 7% mark does not have any technical significance, it is symbolically important because countries like Greece needed bailouts around that level.

In Asia, the Japanese Nikkei 225 edged lower by 0.06% to 8,160 and the Chinese Hang Seng tumbled 1.4% to 17,689.

The benchmark crude oil contract traded in New York fell 99 cents, or 1%, to $95.46 a barrel. Wholesale RBOB gasoline slipped 1 cent, or 0.58%, to $2.50 a gallon.

In metals, gold dropped $15.00, or 0.84%, to $1,685 a troy ounce. The yield on U.S. government debt ticked higher. The benchmark 10-year note yields 1.939% from 1.883%.

Stocks to watch today include Netflix, Inc. (NASDAQ:NFLX), Apple Inc. (NASDAQ:AAPL), Morgan Stanley (NYSE:MS), Intel Corporation (NASDAQ:INTC), Bank of America Corporation (NYSE:BAC), Sirius XM Radio Inc. (NASDAQ:SIRI) and Alcoa Inc. (NYSE:AA).

Netflix, Inc. (NASDAQ:NFLX) is down 0.98% at $67.83 in pre-market trading today. NFLX trades on average 8.97 million shares a day. Over the past 5 trading sessions, NFLX has been trading lower falling from $80 to less than $70 in that time period. The company has a current market cap of 3.60 billion.

Apple Inc. (NASDAQ:AAPL) is down 0.27% at $366 in pre-market trading. AAPL has traded 9.5 thousand shares as of 8:22 am EST and trades 17.88 million shares on average daily. The past 5 trading sessions has seen AAPL fall from $385 to less than $370. The company has a current market cap of 341.08 billion.

Morgan Stanley (NYSE:MS) is down 0.61% in pre-market trading at $12.95. MS trades about 35.54 million shares on average a day. MS has fallen from $15 a share to less than $13 over the past 5 trading sessions. The company has a current market cap of 25.11 billion.

Intel Corporation (NASDAQ:INTC) is down 0.66% at $22.55 in pre-market trading. INTC has fallen more than $3 in the past 5 days of trading. The stock trades on average 65.43 million shares a day. The company has a current market cap of 115.59 billion.

Bank of America Corp (NYSE:BAC) is down 0.29% at $5.12 in pre-market trading. BAC trades 264.28 million shares a day on average. The stock has fallen nearly $1 in the past 5 trading sessions. The company has a current market cap of 52.1 billion.

Sirius XM Radio Inc. (NASDAQ:SIRI) is down 0.57% at $1.73 in pre-market trading. SIRI trades on average 66.03 million shares a day. Over the past 5 trading sessions, SIRI is nearly unchanged after hitting a high of over $1.90 on Tuesday before falling back down to $1.74 on Wednesday. The company has a current market cap of 6.53 billion.

Alcoa Inc. (NYSE:AA) is down 0.11% at $8.87 in pre-market trading. AA trades 36.88 million shares a day on average. The stock has fallen more than a dollar since last Thursday. The company has a current market cap of 9.45 billion.

Oil Prices Trading Slightly Higher This Morning as Stock Market is Shaky

The price of oil is up in early trading this morning as traders are less concerned about the ‘super committee’s ‘ failure. While the super committee failed to reach an agreement on substantial debt reductions, there will be $1.2 trillion in automatic budget cuts triggered by this failure. Traders are realizing today that this doesn’t effect near term growth as the cuts are spread over 10 years and don’t take effect until 2013.

Crude oil prices for January 2012 delivery are trading up $1.24 this morning at $98.16. OPEC is looking to cut output at their December meeting according to Iraq’s Oil Minister Adbul-Kareem Luaibi. This comes as analysts expect demand for oil in Europe to dip. Luaibi expects oil to trade between $100 and $120. Chad is also reducing oil exports of Doba crude in January.

Expect stocks and commodities to have volatile trading during the holiday week. Holiday weeks are notorious for below average volume which increases volatility.

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