Oil, gold climb as Middle East tension escalates; stocks fall

Oil, gold climb as Middle East tension escalates; stocks fall

London: Oil rose the most in three weeks and gold rallied for a sixth day surpassing $1,400 an ounce, as tension in the Middle East escalated. Stocks fell, with Eni SpA leading energy companies with operations in Libya lower.

Gold climbed 0.9% and silver added 2.1%. The Stoxx Europe 600 Index slid 0.6%, with Eni sinking the most since May.

The German 10-year bund yield declined six basis points to 3.19%, while the New Zealand dollar strengthened against all 16 major peers. US markets were closed for the Presidents’ Day holiday.

Libyan security forces attacked anti-government protesters as demonstrations spread across the Middle East and North Africa, a region that accounts for 36% of global crude output. Chinese authorities blocked foreign news reports on protests across the country to stamp out any movement toward pro-democracy revolts.

“You’ve got to be very concerned, particularly because it can affect the oil price, and if you have the oil price spike up another $20, $30, you could reenter a global recession," Bill Belchere, global chief economist at Mirae Asset Securities, said in a Bloomberg Television interview in Hong Kong.

Oil jumped as much as 4.2 % to $89.78 a barrel in New York, before trading at $89.34.

Brent for April settlement on the London-based ICE Futures Europe exchange climbed as much as $2.56 to $105.08 a barrel, the highest since 25 September and traded at $104.62 at 2.40 pm local time.

Gold climbed as high as $1,403.75 an ounce, and silver rose to a 30-year high of $33.4825 an ounce.

Eni, the largest foreign oil and gas producer in Libya, lost 4%, while OMV AG, central Europe’s biggest oil company, which has been in Libya since 1975, also slid 4 %. Tekfen Holding AS, a Turkish builder with projects in the North African country, lost 5.7%.

Carlsberg A/S, the Nordic region’s biggest brewer, fell 1.4 % after profit missed estimates. Merck KGaA gained 3.6% as earnings beat forecasts.

Alpha Bank SA rose 13% as the shares resumed trading following a takeover bid from National Bank of Greece SA.

The MSCI Emerging Markets Index added 0.1%, led by by commodity producers.

Russia’s Micex Index rose 1.1% and South Africa’s benchmark gauge advanced 0.7% on higher oil and precious metals. Turkey’s ISE 100 National index lost 0.9%.

Vietnam’s VN Index slumped 4%, the most since November 2009, after the government said it will raise electricity prices by a record 15.3%.

The yield on the German two-year note dropped one basis point to 1.39% after Chancellor Angela Merkel’s Christian Democratic Union lost an election in the city-state of Hamburg to the Social Democrats.

The New Zealand dollar appreciated 0.3% against the US currency on speculation Auckland-based Fonterra Cooperative Group Ltd will raise its forecast for payouts to farmers, boosting the nation’s economic recovery. The euro weakened 0.1% versus both the dollar and the yen.

Claudia Carpenter, David Merritt, Daniel Tilles and Jason Webb in London also contributed to this story.