Petroleum product prices to be reduced Aug 1: Asim

LAHORE: Adviser to the Prime Minister on Petroleum, Dr Asim Hussain, said on Tuesday that the prices of POL products would be reduced on the first of August because the government had adjusted the margins of oil marketing companies (OMCs) which had made huge profits in the past.

Speaking at the Lahore Chamber of Commerce and Industry, he said the Oil and Gas Regulatory Authority had been directed to make public oil companies’ formula to fix prices on Thursday.

He said the petroleum development levy was a fixed tax and it was far less than the amount levied in other countries.

Dr Hussain said the government had decided to open 90 petrol pumps across the country where ethanol blended petrol called E-10 gasoline would be sold. The fuel was not only cheaper but also environment-friendly, he added.

He said oil, gas and water crises could aggravate in the coming years because consumption was increasing fast.

He said industry was on the priority list for provision of gas, but line losses in Pakistan were eight to nine per cent of total consumption.

He said the government was working on short-, medium- and long-term solutions to overcome energy crisis and was expecting foreign investment of $10 to 15 billion in this sector during the next five years.

The adviser said that the country faced 650 mmcf gas shortage last year which was expected to go up to 800 to 850 mmcf with the setting up of 2,000 new CNG stations in Punjab and 450 in Sindh. The situation required serious efforts for energy preservation, he added.

In his address, LCCI President Mian Muzaffar Ali stressed the need for reducing the margin of OMCs.

He said the high price of petroleum products were adding to the cost of doing business and making products less competitive for the international market. The petroleum development levy was a huge burden on consumers because the general sales tax was already being collected on the sale of petroleum products, he added.

The LCCI chief called upon the adviser to open more blocks for exploration of oil, gas and other valuable minerals. The deal with Qatar for import of liquefied natural gas was very appreciable but there was need to expedite the matter, he added.

Talking to newsmen after a meeting with businessmen at the Governor’s House, Dr Hussain said the country was producing 3.9 billion cubic feet (bcf) of gas against a requirement of eight bcf.

He said the government had adopted a three-pronged strategy to tackle gas shortage. Under short-term measures, liquefied natural gas would be imported next year while liquefied petroleum gas projects were being installed.

The adviser said foreign companies would also be invited to invest in oil and gas exploration projects under a mid-term strategy while new projects to explore alternative energy sources would be initiated under a long-term policy.

To a question, Dr Asim said that a gas project with Iran would be completed within the next few years.

He said the Sui Northern Gas Pipelines had started a topographic survey for the Iran-Pakistan gas pipeline project and an area spread over 100 kilometres had been covered.

The oil price imbroglio

The National Assembly should debate and find a way out of the current imbroglio on oil pricing. This requires a critical review of the skewed tax regime.

In the first week of July, fuel prices were raised, cut and raised again. The price of petrol has now been fixed at Rs62.13 a litre, the same as it was after imposition of carbon tax on July1.

Instead of capitalising on the public goodwill to kick-start the sagging economy, the elected government seems to be doing all in its means to loose its most valuable asset — the public support — by accepting what it calls, ‘politically difficult decisions’ to appease foreign lenders.

The imposition of carbon tax in place of petroleum development levy by the Gilani government from July 1, its termination on the order of the Supreme Court on July seven and restoration of petroleum development levy the next day on July eight through a presidential ordinance were extraordinary measures with a direct impact on the wellbeing of the people.

The carbon tax that was projected to raise Rs122 billion this fiscal year for the government hiked the prices of petroleum products by 7-15 per cent when poverty and unemployment are on the rise.

The increase in the transport charges pushed up the cost of production, in some cases by as much as 10 per cent, and energised the price spiral. Post-July 1, market reported increase in price of many consumer and producer items such as edibles and cement.

There was resentment in the public over the government decision. The decision of the Supreme Court pleasantly surprised the public as prices of petroleum products fell back to June 30 level. The Presidential Ordinance ‘restored’ petroleum development levy with an increase equivalent to the raise announced under the garb of carbon tax.

Dr Asim Hussain, advisor to prime minister on petroleum, defended the position of the government. ‘The government needed revenue from petroleum products to cut the Rs722 billion budget deficit.’

‘The government is bogged down with pricing of wheat, sugar cane, power, gas, oil products for the better part. Let the market determine the prices of products and services and the government should focus on improving the fundamentals to create the right economic environment for growth and development,’ a member of the government research team said on the condition of anonymity.

The biggest opposition party — PML(N) — tried to champion the cause of the downtrodden by opposing the carbon tax but for this, it chose the apex court instead of the parliament.

‘They (PML N) sat through the prolonged marathon budget sessions of the assembly and voted for passing the budget with carbon tax. Coming out of the assembly they headed for the court. What is this? Delayed reaction or hypocrisy? Why did they not tear it (carbon tax) down on the floor of the assembly in the full public view? Which democrat would push the Supreme Court to overrule the decision of the parliament?,’ asked a seasoned analyst from Islamabad.

Even if we cut the dramatics out, it would be wise not to drag the Supreme Court on issues that can well be debated and resolved in the assembly. The solution should be acceptable for donors but must not be against the wishes of deprived people.

‘If this is the beginning of another round of animosity between the two key institutions— the executive and the judiciary, only time would tell. This, however, would not fare too well for the country faced with turmoil and recession,’ commented a worried businessman.

A country’s health dependent on net foreign inflows for growth, cannot, perhaps, afford to be indifferent to its balance sheet. It needs to project itself as financially responsible to achieve credit-worthiness to be able to get the support it desperately needs from development partners.

But why should the burden of narrowing fiscal and current account deficit be borne by ordinary citizens in an inequitable society? Indirect taxes on essential commodities such as oil disproportionately burden the poor. It would be apt for the government to focus on enlarging the tax net and making tax administration efficient and corruption-free.

To show a presentable current account position, it may take drastic measures to cut wasteful spending. There is a huge room to reduce the size of government without compromising its capacity to govern. There are scores of departments that have become redundant.

By publicising and honouring members of assemblies who pay most in taxes, examples could be set for others to follow. What FBR has not been able to achieve by hounding high net worth individuals could perhaps be achieved by setting examples.

‘Instead of squeesing more revenues out of a sliding economy through taxation, would it not be better if the government trims its non-development expenditure, drop orders for new cars for ministers’ chief ministers’ MNAs’ and MPAs,’ cut on lavish parties and extended dinners, stop travelling in company of friends and relatives around the world?

It is the typical behaviour of the private sector to internalise gains and externalise pains. The government is expected to reconcile the competing interests in a society that also suit the interests of the majority. It is also supposed to be a custodian of public interest. It is supposed to keep self-serving interests and socially costly practices in check by laying down rules and regulations that promote social justice.

It is inappropriate, in the first place, to rename a tax to cover up the inefficiency of the government in mobilisation of internal resources.

This is not only the government, the attitude of the opposition is equally intriguing. The PML(N) legislators like other members of the National Assembly took little interest in the budget which was passed once the business of grant approval was completed without any meaningful debate.

It, however, opted to file a petition in the Supreme Court against the carbon tax on oil products instead of tearing it down in the assembly with the help of legislators.

Asian markets crude prices at the end of week falling

SINGAPORE: Oil prices lingered near $50 a barrel Friday in Asia as investors weighed a possible second-half recovery of U.S. crude demand against recent dismal economic data reflecting a severe recession.

Benchmark crude for May delivery fell 33 cents to $49.65 a barrel by midday in Singapore in electronic trading on the New York Mercantile Exchange. The contract on Thursday rose 73 cents to settle at $49.98.

Oil prices have bobbed around $50 a barrel this month as the current backdrop of high unemployment, weak consumer demand and falling corporate profits has tempered investor optimism about an eventual economic rebound.

Falling crude demand and rising inventories have kept prices from rising higher. Storage facilities for crude oil in the U.S. have been swelling since the end of February, bloating to a nearly 19-year high last week.

Oil higher in Asian trade

Oil higher in Asian trade SINGAPORE: Oil prices were higher in Asian trade Thursday, pushed up by a smaller-than-expected rise in US crude reserves, analysts said.

New York’s main contract, light sweet crude for May delivery gained 1.48 dollars to 50.86 dollars. Brent North Sea crude for May delivery advanced 1.50 dollars to 53.09 dollars.

Oil higher in Asian trade

SINGAPORE: Oil prices were higher in Asian trade Thursday, pushed up by a smaller-than-expected rise in US crude reserves, analysts said.

New York’s main contract, light sweet crude for May delivery gained 1.48 dollars to 50.86 dollars. Brent North Sea crude for May delivery advanced 1.50 dollars to 53.09 dollars.

HUBCO receives Rs35.458 bln from WAPDA

KARACHI: The Hub Power Company (HUBCO) has received a payment of outstanding amount of Rs35.458 billion from WAPDA through circular debt settlement arranged by the federal government.

According to HUBCO communique despatched to KSE, Rs30.156billion were immediately paid to Pakistan State Oil (PSO) in accordance with settlement procedure. After this settlement, the receivables against WAPDA are estimated at Rs27.8 billion while HUBCO has to pay Rs24 billion to PSO against the supply of furnace oil.

Oil refineries production sees over 4 per cent growth

ISLAMABAD: The total production of oil refineries has witnessed a growth of 4.14 percent during the corresponding fiscal year 2007-08.

The total production (energy and non-energy) by the refineries during the year amounted to 11.10 million tons as compared to previous year’s 10.66 million tons, posting a growth of 4.14 percent, according to official sources.

All the refineries, except National Refinery Limited (NRL) registered increase in production during the period, while the production by Bosicor refinery was significantly higher due to its increased production capacity resulting from revamping and de-bottle-necking of crude distillation unit.

PARCO’s annual growth for the year under review stood at 3735.8 tons against the previous year’s 3586.2 tons, showing increase of 4.17 percent.

NRL could not perform well in 2007-08 as its production fell to 2585.1 tons from last year’s 2664.5 tons, registering decrease by 2.98 percent.

While, Attock Refinery Limited and Bosicor Pakistan Limited exhibited good performance by attaining 5.39 percent and 16.29 percent respectively.

Oil weaker in Asian trade

SINGAPORE: Oil weakened in Asian trade Friday after an overnight rally driven by the surge in US equity markets, analysts said.

New York’s main contract, light sweet crude for May delivery dropped 29 cents to 54.05 dollars. Brent North Sea crude for May delivery was off 21 cents to 53.22 dollars.

Crude prices likely ran out of steam amid worries the worst is not over for the US economy, analysts said.

Oil prices up in Asian trade

SINGAPORE: Oil prices rose in Asian trade Monday, driven by optimism in the financial markets ahead of an expected US government announcement of a plan to sell toxic assets, analysts said.

New York’s main futures contract, light sweet crude for delivery in May, was up 30 cents to 52.37 dollars a barrel. The Nymex contract for April delivery expired on Friday.

Brent North Sea crude for May delivery gained 45 cents to 51.67 dollars.

“Right now, the crude oil market is primarily driven by the financial markets,” said Victor Shum, an analyst with energy consultancy Purvin and Gertz in Singapore. “What we are seeing in the crude oil market is a financial rally.”

The US government is expected to to unveil the plan as early as Monday to sell toxic assets weighing down the financial system.

US Treasury Secretary Timothy Geithner would detail the “Public Private Investment Programme” to entice hedge funds and other private investors into investing in bad assets choking banks’ balance sheets, US officials said.

Oil price soars above 50 dlrs

NEW YORK: Oil prices jumped above 50 dollars Thursday after the Federal Reserve moved to inject another trillion dollars into the US financial system to boost the world’s biggest economy.

New York’s main futures contract, light sweet crude for delivery in April, ended 3.47 dollars higher from Wednesday’s close to 51.61 dollars per barrel, topping 50 dollars for the first time in four months.

In early trading Thursday, the contract surged to 52.25 dollars — the highest level since November 28, 2008.

Brent North Sea crude for May delivery rose 3.01 dollars to 50.67 in London after breaching 51 dollars.

Analysts attributed the price jump to Wednesday’s announcement by the US Federal Reserve that it would pump 1.15 trillion dollars into the financial system. The move also has pulled down the US dollar against key currencies.

“You need to put this action in the context of what has happened in the last few weeks in the market. There has been a shift in market sentiment,” said Constanza Jacazio of Barclays Capital.

“From a market where demand was the only driver of price action and sentiment, there seems to have been a shift in a more balanced view,” he said.

Crude futures had slid Wednesday on news of a larger-than-expected increase in US energy reserves that highlighted weak American energy demand, but trimmed losses after news of the Fed plan.

“Oil prices took a rollercoaster ride yesterday (Wednesday), with bearish (US) inventory data … firstly prompting a fall in the April (New York) contract to 47 dollars before the Fed’s surprising announcement,” said Dresdner Kleinwort analyst Eugen Weinberg.

The US central bank said Wednesday that it would buy up to 300 billion dollars in long-term US Treasury bonds over the next six months “to help improve conditions in private credit markets.”

World oil prices below 49 dollars

SINGAPORE: World oil prices retreated in Asian trade Wednesday after topping a two-month high above 49 dollars overnight on concerns over weak global energy demand amid the economic downturn, analysts said.

New York’s main futures contract, light sweet crude for delivery in April, fell 65 cents to 48.51 dollars a barrel in morning trade.

It had jumped 1.81 dollars in New York trade Tuesday to close at 49.16 dollars after hitting 49.82, its highest level since January 6.

Brent North Sea crude for May delivery was down 47 cents to 47.77 dollars. The April contract expired Monday at 43.98 dollars.

“Demand is still the key. Yet we still have to see the demand for oil and natural gas increase before we get too excited about a change in trend,” said Phil Flynn of Alaron Trading in the United States.

“Oil demand in the US is weak and we need to see that change… If oil closes above 50 dollars a barrel we may need to start getting a bit bullish.”

The market was also waiting for the release later Wednesday of the weekly US energy inventories report, which is closely watched because the United States is the world’s biggest oil consumer.

Analysts said speculation that the Organisation of Petroleum Exporting Countries (OPEC) would slash production during their next meeting in May should support prices.

OPEC, which pumps about 40 percent of the world’s crude, opted at their last meeting Sunday in Vienna to leave production quotas unchanged.

Oil rises slightly in Asian trade

SINGAPORE: Oil prices rose slightly Wednesday in Asia after hitting a three-year low overnight as investors try to gauge how much the slowing U.S. and Chinese economies will hurt demand for crude.

Light, sweet crude for January delivery was up 74 cents to $47.70a barrel in electronic trading on the New York Mercantile Exchange by midday in Singapore. The contract fell $2.32 overnight to settle at $46.96, after touching $46.82, the lowest level since hitting $46.20 intraday on May 20, 2005.

Oil falls over $1 in Asia

SINGAPORE: Oil fell more than a dollar on Monday, towards $53 a barrel, after producer cartel OPEC decided to delay a decision on a third supply cut to its next meeting later in December as economic woes cripple oil demand.

Gulf producers want to see strict compliance with recent output curbs of 2 million barrels per day (bpd) before considering further cuts when the Organization of the Petroleum Exporting Countries (OPEC) meets in Algeria on Dec. 17.

U.S. light crude for January delivery fell 96 cents to $53.47 a barrel, after having dipped below $53 earlier. Oil settled down 1 cent at $54.43, against its Wednesday settlement in thin trading in a shortened, post-Thanks giving holiday session on Friday.

London Brent crude slid $1.04 to $52.45. “We certainly weren’t surprised with OPEC’s decision not to cut at the Cairo meeting. However, there will most likely be repercussions and we fully expect the market to test the $50 level again,” said Jonathan Kornafel, Asia director of Hudson Capital Energy.

Artificial shortage of oil will be investigated: Secretary

ISLAMABAD: Sufficient supplies of oil exist in the country, while the artificial shortage will be investigated.

In an exclusive talk with Geo News here, Ministry of Petroleum and Natural Resources (MP&NR) Secretary, G. A. Sabri told this. He said that the diesel stocks for 22 days and petrol stocks for 9 day exist in the country. He further said that Oil Companies Advisory Committee (OCAC) has already been given permission to import one lac tons of diesel. G. A. Sabri said that the government would retain reserves of petrol for at least 10 days from January 1.

Oil prices fall further

SINGAPORE: World oil prices fell further below 50 dollars on Friday at levels unseen in more than three years on growing fears that a worldwide recession could ravage energy demand, analysts said.

New York’s main futures contract, light sweet crude for January delivery, dropped 88 cents to 48.54 dollars a barrel.

The December contract plunged 4.00 dollars a barrel before ending at a closing price of 49.62 on the New York Mercantile Exchange Thursday, when it expired. The contract earlier hit an intraday low of 48.64, a level last seen in May 2005.

Brent North Sea crude also plunged through the psychological barrier of 50 dollars a barrel. On Friday the contract was 48 cents lower at 47.60 dollars a barrel. Brent settled down 3.64 dollars at 48.08 dollars in London on Thursday.

Oil prices plunge below 50 dollars per barrel

NEWYORK: Oil prices crashed below 50 dollars a barrel on Thursday as plunging equities and weak US data sparked fresh fears that a worldwide recession would ravage energy demand.

In New York, light sweet crude for delivery in December plunged 4.00 dollars a barrel to close at 49.62.

The December contract expired at the close after hitting an intraday low of 48.64 dollars, a level last seen in May 2005.

The contract had not been below the 50-dollar level since January 18, 2007.
The New York contract broke the psychological barrier shortly after Brent North Sea crude for January crashed it in London.

Brent fell as low as 47.82 before settling 3.64 dollars lower at 48.08 dollars a barrel.
Analysts said sentiment was hammered by a dismal unemployment report in the United States, the world’s biggest energy consumer.

Official data showed initial claims for unemployment benefits shot up to a 16-year high last week as the economy appeared to be heading into a deep recession.

“The hits to the economy keep on coming. Initial jobless claims rose 27,000 to 542,000 for the week, the highest since 1992. Energy prices were under pressure all night, and the losses have accelerated on the back of the claims data,” said John Kilduff, analyst at MF Global.

“Given the rapidity of the decline, the current lows and lower are tentatively a value zone for us, and should be considered a buying opportunity,” Kilduff added.

Oil prices have now plunged by about two-thirds since striking record highs above 147 dollars in July as a global economic slowdown slashes worldwide demand for energy.

“The oil market is reacting to yet more negative news on the prospects for the global economy,” said IHS Global Insight oil analyst Simon Wardell.

“With stock markets continuing to fall around the world, and particularly in Asia, there is just no positive news out there which could help restore confidence in oil markets.”

Wardell said that “the market is still searching for a floor and until there some stronger signs that supply is being cut, we are likely to see continued price weakness.”

Oil market sentiment was also dampened this week after US bank Goldman Sachs said it would close all of its oil trading recommendations, saying it “did not expect significant upside potential.

“The volatility in the past few weeks has mostly been to the downside and the pressure on the oil complex has increased,” Goldman Sachs said in a report.

In addition, the US Federal Reserve on Wednesday sharply cut its outlook for the US economy for 2009, highlighting the potential for recession over the next year while leaving the door open for more interest rate cuts.

The health of the US economy is vital for the oil market because the United States is the world’s biggest oil consuming nation

Oil refineries, distribution Cos’. profits decline

KARACHI: The profits of the oil refineries and distribution companies during the first quarter of the current fiscal year plummeted by 24 and 376 percent respectively.

According to the statistics available here, the profits of the oil refineries during July-September current fiscal year declining by 24 percent on annual basis stood at Rs18.60 billion, while the profit of the oil distribution companies as compared to the same period previous year plunging by 376 percent amounted to Rs8.79 billion.

Invest Capital analyst, Khurram Shahzad attributed oil sector plummeting profit mainly to the descending international market crude oil price and the depreciation of rupee against dollar. However, the profits of the oil and gas exploration companies during the same period increased annually by 55 percent.

Oil price slump below 53 dollars

LONDON: Oil prices sank under 53 dollars a barrel here on Wednesday, hitting the lowest level since January 2007, as traders worried about weaker demand for energy amid a gloomy economic outlook.

In afternoon London trade, Brent North Sea crude for delivery in December plunged to 52.88 dollars a barrel, a level last seen on January 22, 2007.

New York’s main contract, light sweet crude for December, dropped to 56.41 dollars a barrel, which was last witnessed on March 20, 2007.

Oil prices sink in Asian market

SINGAPORE: World oil prices sank below 60 dollars in Asian trade Friday, with the market gripped by worries energy demand would be hit by a global economic downturn, dealers said.

New York’s main contract, light sweet crude for December delivery briefly traded below the 60-dollar level at 59.97 dollars, its lowest level since March 2007, but later regained some ground to trade at 60.52 dollars.

The New York contract closed Thursday 4.53 dollars lower at 60.77 dollars. Brent North Sea crude for December delivery was off 81 cents to 56.62 dollars a barrel from Thursday’s close of 57.43 dollars.

Oil prices sink in Asian market

SINGAPORE: World oil prices sank below 60 dollars in Asian trade Friday, with the market gripped by worries energy demand would be hit by a global economic downturn, dealers said.

New York’s main contract, light sweet crude for December delivery briefly traded below the 60-dollar level at 59.97 dollars, its lowest level since March 2007, but later regained some ground to trade at 60.52 dollars.

The New York contract closed Thursday 4.53 dollars lower at 60.77 dollars. Brent North Sea crude for December delivery was off 81 cents to 56.62 dollars a barrel from Thursday’s close of 57.43 dollars.

Oil prices plummet to 61 dollars

LONDON: World oil prices plunged to the lowest points for more than 17 months on Friday, despite news that the OPEC cartel will cut oil output by 1.5 million barrels per day.

Moments after the OPEC decision was announced, Brent North Sea crude for December delivery slumped to 61.08 dollars per barrel, the lowest point since March 2007.

New York’s main contract, light sweet crude for December delivery, tumbled to 63.05 dollars a barrel, which was last seen in May 2007.

OPEC decided to cut its oil output by 1.5 million barrels per day from November 1 at an emergency meeting in Vienna on Friday, Saudi Oil Minister Ali al-Nuaimi told reporters.

The cartel is seeking to support plunging crude prices despite a looming worldwide recession.

Analysts had expected the Organization of Petroleum Exporting Countries to cut its daily output by at least one million barrels per day as a global economic slowdown amid a worsening financial crisis slashes demand for energy.

Crude futures in London and New York have plunged close to 60 percent from record highs of above 147 dollars a barrel reached only three months ago when supply concerns sent prices soaring.

World oil prices higher

SINGAPORE: World oil prices advanced by over one dollar in Asian trade Tuesday, extending gains from overnight on increased expectations OPEC will unveil plans to cut its output this week, dealers said.

New York’s main contract, light sweet crude for November delivery was 1.36 dollars firmer at 75.61 dollars a barrel from its close of 74.25 in the United States Monday. The contract was up 2.40 dollars at the close Monday.

Brent North Sea crude for December delivery rose 1.18 dollars to 73.21 dollars. It closed Monday 2.43 dollars higher at 72.03 dollars.

Crude prices have halved in value since reaching record highs of above 147 dollars in July, prompting calls from key OPEC members for the oil cartel to cut output when they meet Friday in Vienna.

Dow Jones up 2%; oil rises to $73 a barrel

LONDON: Stocks rose around the globe on Monday as efforts to shore up banks inspired investors to buy beaten-down shares and energy shares surged as oil rose on expectations that OPEC may act this week to boost prices.

US Federal Reserve Chairman Ben Bernanke raised hopes for more spending to help the economy, helping push key Wall Street indexes up.

European and Japanese stocks vaulted more than 3% higher. The dollar extended gains versus the yen after Bernanke’s remarks. Underpinning the new-found relief, lending rates between banks — at the center of fears about the industry freezing up — fell significantly.

This suggested government efforts to provide support were finally bearing fruit. “This is unmitigated good news. However, the rates need to drop much further,” said T.J. Marta, fixed income strategist at RBC Capital Markets in New York.

London interbank offered rates, closely watched as a benchmark for the cost of financing throughout the private sector, fell for overnight dollars to a four-year low.

Perhaps more significantly, the three-month rate recorded its biggest drop since the Fed delivered an emergency interest rate cut last January.

A continued easing of financing for short-term loans for three months will take the pressure off companies, which have had to scramble for overnight cash as banks became reluctant to lend during the recent paralysis of credit markets. But unease over the economy continued to hang over some markets, and US government debt prices rose after Bernanke’s gloomy economic outlook spurred a safe-haven bid for Treasuries.

On Wall Street the Dow industrials and S&P 500 both rose more than 2%. Dow components Exxon Mobil and Chevron led the index higher after analysts at Oppenheimer & Co raised recommendations on the companies, as well as a raft of other energy companies. The Dow Jones industrial average was up 183.91 points, or 2.08%, at 9,036.13. The Standard & Poor’s 500 Index was up 21.78 points, or 2.32%, at 962.33.

The Nasdaq Composite Index was up 18.87 points, or 1.10%, at 1,730.16. The S&P energy index jumped 6.77%, with shares of both Exxon and Chevron rising over 6%. Shares of BlackBerry maker Research In Motion fell 8.9% on concerns about technology spending. In Europe, oil and bank shares drove gains. The FTSEurofirst index closed up 3.27%. Energy stocks were the top-weighted gainers on the FTSEurofirst 300, with BP and Royal Dutch Shell both soaring more than 10% and advancing 7.1% as crude prices rose.

Among banks, Royal Bank of Scotland added more than 23%, HSBC added 5.4% and Barclays put on more than 7%. European Central Bank President Jean-Claude Trichet added to the confidence-building over the weekend, pledging in a radio interview to do whatever it takes to restore confidence to financial markets. He said the ECB was working very closely with the US Federal Reserve to solve the financial crisis that has crippled equity markets for more than a year.

The benchmark 10-year US Treasury note was up 8/32, with the yield at 3.9029%. In Europe, benchmark bond futures were just a shade higher. Oil rose on expectations that OPEC may cut output this week to boost prices, which have fallen more than 50% in just three months from a record high above $147 a barrel. The president of OPEC, Chakib Khelil, said on Monday that non-OPEC producers like Russia, Norway and Mexico should contribute production cuts to help stabilize sagging prices. The gains in European and US stock markets also helped underpin crude. US light sweet crude oil rose $2.07 or 2.88%, to $73.92 per barrel.

Gold also gained on the back of bargain hunting as a 9% fall in prices last week and the recovery in oil prices helped boost buying. Spot gold prices rose $4.10, or 0.52%, to $785.80.

The dollar gained broadly, as reflected in its value against a basket of major currencies, which was up 0.87% at 83.185 from a previous session close of 82.466.

“This is more a story about flows. There is still some real money demand for dollars out there,” said Alan Ruskin, chief international strategist at RBS Global Banking in Greenwich, Connecticut.