Oil Gains as European Hopes Rise; Gold Slips But Seen Retaining Longer-Term Sheen

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Oil is continuing to gain in early morning trading, with hopes climbing particularly for an improved economic outlook for Europe, reflected in the euro's rise. Market eyes will be on the release of the latest weekly stockpile from the American Petroleum Institute later in the day, and the U.S. Department of Energy Wednesday for clues in the U.S. market.

Gold is down slightly, but is expected to face upward momentum moving forward as investors are seen buying on dips amid longer-term concerns about the global economic recovery.

At 0755 ET, Brent crude is up 0.8% at $76.28 a barrel, while light sweet crude is up 0.8% at $75.68 a barrel, and natural gas is up 1.6% at $5.09 a million British thermal units.

Gold is down 0.1% at $1,223.80 an ounce, while silver is down 0.1% at $18.39 an ounce, and copper is up 0.2% at around $3.00 a pound.

BP plc ( BP ) remains in the hot seat, not least as its credit rating was slashed by six levels to BBB from AA by Fitch, or two levels above junk level. Fitch said it reduced its rating for the oil giant amid concerns about the cost of cleaning up after the Gulf of Mexico as well as worrries about future liabilities from the worst environmental disaster in U.S. history.

As for Exxon Mobil Corp. ( XOM ), its CEO Rex Tillerson stated in prepared remarks to members of the House Energy and Commerce Committee to assess whether BP took risks "went beyond industry norms." Chevron Corp. ( CVX ) CEO John Watson and ConocoPhillips ( COP ) CEO James Mulva too will be appearing before legislators this morning. As for BP's CEO Tony Hayward, he will be appearing before lawmakers on Capitol Hill Thursday.

RAM Energy Resources Inc. ( RAME ) said it is considering the possibility of sale, refinancing, or recapitalization as it looks to get its finances back on track.

In the mining sector, BHP Billiton Ltd ( BHP ) and Rio Tinto Ltd ( RTP ) will pay an extra 3 million Australian dollars in mining roaylties in Western Australia, but are negotiating for more concessions, according to the Australian Financial Review.

Australia's Focus Minerals LTD ( FML ) has acquired a 75% stake in the Lake Cowan gold and copper project in Western Australia from Semro. Focus will issue 3 million worth of fully paid shares to Semro, and spend 200,000 Australian dollars on exploration over the next 12 months.



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This article appears in: Investing , Commodities


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