Jan 6, 2015 8:11 AM
Oil falls further, but stocks stabilize after Asia losses
The Associated Press
BEIJING (AP) The price of oil extended its slump on Tuesday, though stock markets in Europe recovered their footing despite losses earlier in Asia.
KEEPING SCORE: In early trading, Germany's DAX was up 0.5 percent at 9,524.24 and Paris's CAC-40 rose 0.1 percent to 4,116.72. London's FTSE 100, which lists many energy companies, was off 0.4 percent at 6,391.30, as the U.S. benchmark for crude oil futures slipped to $49 a barrel.
Wall Street looked set for a stable open. Dow and S&P 500 futures were up both 0.1 percent.
ENERGY: U.S. benchmark crude dropped $1.01 to $49.03 a barrel in electronic trading on the New York Mercantile Exchange. On Monday, the contract briefly dipped below $50 before closing down $2.65 at $50.04 per barrel. Brent crude, used to price international oils, was down $1.02 at $52.09 a barrel. It plunged $3.31 on Monday.
OIL IMPACT: The prolonged slide in oil prices should help economic growth by reducing energy costs but the depth of the downturn has fueled concern it might foretell a global slowdown. Also, as the price of oil falls, energy companies might cut jobs, put off investment or go out of business. On Monday, Transocean, a company that provides offshore drilling services to oil companies, was one of Wall Street's biggest decliners, losing 7.1 percent.
EURO JITTERS: The possibility that Greece's anti-austerity Syriza party might win national elections this month has fed doubts about whether the country will stick to terms of its bailout and remain in the euro bloc. Meanwhile, a new survey showed that economic growth in the eurozone was weak at the end of 2014, suggesting a robust recovery is still a dim prospect. The news helped keep pressure on the euro, which was down 0.2 percent to $1.908, near a nine-year low.
ANALYST'S TAKE: "The unwind in equities has continued with markets mostly risk-off on flaring oil and Greece concerns. As oil prices venture to levels not seen in over five years, the energy space is predictably the hardest hit," said IG market strategist Stan Shamu in a report. "Being a net importer of oil, the eurozone should have been a beneficiary of this drop in oil prices but things are a little complicated for the region at the moment."
ASIA'S DAY: Tokyo's Nikkei 225 tumbled 3 percent to 16,883.19 and Seoul's Kospi shed 1.7 percent to 1,882.45. Hong Kong's Hang Seng declined 1 percent to 23,485.41. The Shanghai Composite Index was barely changed at 3,351.45. India's Sensex was off 2.7 percent at 27,102.70. Benchmarks in Taipei, Singapore, Sydney and New Zealand also declined.
OTHER CURRENCIES: The dollar declined to 119.08 yen from the previous session's 119.44 yen.