Oil above $78

World oil prices edged higher on Monday as traders paused for breath
after prices struck a one-year peak before the weekend. New York's
main contract, light sweet crude for November delivery, rose 24
cents to 78.77 dollars a barrel after ending Friday at 78.53
dollars, the highest closing level since October 2008. Brent North
Sea crude for December delivery added 25 cents to reach 77.24
dollars.

Asian markets mostly higher

Asian markets were mostly higher on Monday although gains on the back
of rising oil prices and a strengthening dollar were weighed on by
weak US corporate data and a tumble on Wall Street. Hong Kong added
1.23 percent and Shanghai was 2.07 percent higher with help from
crude approaching 80 dollars a barrel, which pushed commodities
firms. Seoul rose 0.53 percent and Taipei 0.47 percent, with the
greenback's rebound helping electronics and auto makers. Singapore
was 0.13 percent stronger and Bangkok was two percent higher after
last week's big losses caused by concerns for the health of
Thailand's king. However, Tokyo shed 0.21 percent and Sydney dropped
0.90 percent. Mumbai was closed for a public holiday. TOKYO: Down
0.21 percent. The Nikkei-225 fell 21.05 points to 10 , 236.51.
HONG KONG: Up 1.23 percent. The Hang Seng Index finished up 270.56
points at 22 , 200.46. The index recorded its best finish since
closing at 22 ,514 on August 4 last year and has risen 5.6 percent
in October. SYDNEY: Down 0.90 percent. The SP/ASX200 dropped 43.6
points to 4 ,792.8. SHANGHAI: Up 2.07 percent. The Shanghai
Composite Index, which covers both A and B shares, was up 61.64
points to 3 , 038.27. SEOUL: Up 0.53 percent. The KOSPI gained 8.71
points to 1 , 649.07. Samsung Electronics rose 0.7 percent to 751
,000 won and Hynix Semiconductor added 0.3 percent to 19 ,850 won.
Hyundai Motor added 1.1 percent to 101 ,000 won. TAIPEI: Up 0.47
percent. The weighted index rose 36.22 points to 7 , 751.32.
SINGAPORE: Up 0.13 percent. The Straits Times Index gained 3.58
points to 2 , 711.70. BANGKOK: Up 2.02 percent. The Stock Exchange
of Thailand gained 14.49 points to close at 731. 61. KUALA LUMPUR: Up
0.38 percent. The Kuala Lumpur Composite Index gained 4.72 points
to 1 , 261.49. The market is at a new high for 2009. JAKARTA: Up 0.20
percent. The Jakarta Composite Index gained 5.12 points to 2 ,
520.92. MANILA: Up 0.32 percent. The composite index added 9.38
points to close at 2 , 932.20. WELLINGTON: Up 0.43 percent. The
NZX-50 closed 13.72 points up at 3 , 220.92.

Iraq cabinet ratifies oil deals

Iraq's cabinet has ratified a deal with two foreign energy companies
to develop the giant southern oilfield in Rumaila. The contract with
Britain's BP and CNPC of China is the first major deal with foreign
firms to be signed since an international auction in June. The
project aims to almost triple output at the 17 bn barrel field -
increasing it by 2 m barrels a day. Iraq has the world's third
largest oil reserves, but production lags behind potential due to a
lack of investment. The country's total daily output of 2.4 m barrels
is lower than it should be due to problems stemming from sanctions
against former Iraqi governments, lack of investment and insurgent
attacks, analysts say. Bidders withdraw Thirty two companies -
including Shell, Exxon, BP and Total - bid for contracts to develop
six oil fields and two gas fields in June's televised auction, Iraq's
first big oil tender since the invasion of 2003. But most of the
bidders withdrew at the last moment, saying the terms on offer were
unfavourable. BP and CNPC agreed to run the Rumaila field - near the
southern city of Basra - after US giant Exxon Mobil turned it down.
Iraq's oil ministry offered 20- year service contracts on the field,
stipulating that companies would not be paid anything until a
minimum level of production - close to the amount currently being
produced - was reached. Above that point, the companies would be
paid a certain amount per barrel up to a maximum level stipulated by
the ministry. The maximum amount being offered by the ministry in the
case of the Rumaila field was significantly less than the oil
companies were asking for. Exxon Mobil declined to accept the maximum
payment, but BP and CNPC, which had originally asked for $4 a
barrel, agreed to do the work for $2 a barrel. They will also be
able to charge the ministry for the costs of the work they have to do
on the production facilities. Questions over approval Iraq's oil laws
are still vague and many foreign companies remain wary of investing
in Iraq's energy sector, says the BBC's Gabriel Gatehouse in Baghdad.
The Iraqi government has urged the companies involved in June's
auction to resubmit their bids. But questions remain over who exactly
has the authority to approve such contracts, our correspondent says.
Many companies fear politics could get in the way of business,
especially with parliamentary elections looming in January. BP was
thrown out of Iraq in 1972 when Saddam Hussein nationalized the oil
industry. The British company will hold a 38 % stake in the venture,
compared to CNPC's 37 % share, while Iraq's State Oil Marketing
Organization will control the remaining 25 %, the Associated Press
reported. The fields up for auction in June contained about 43 bn
barrels of Iraq's proven oil reserves of 115 bn barrels.

Japan Airlines seeks tie-up with low-cost carriers

Struggling Japan Airlines is seeking a tie-up with low-cost carriers
for its Asian operations, a report said Saturday.    JAL, looking for
another public bailout to keep flying, is putting together an
emergency turnaround plan under the supervision of a government task
force.    In its cost-cutting efforts, JAL will expand code-sharing
operations with budget carriers in Asia, replacing its less
profitable flights for tourist destinations, such as Hawaii, Thailand
and Indonesia, the Asahi daily reported.    The move would enable JAL
to focus on more profitable business flights to North America,
Europe and China, the daily said without citing sources.    Asia's
largest carrier, which lost more than one billion dollars in the
April-June quarter, announced last month plans for 6,800 job cuts, a
drastic reduction in routes and a tie-up with a foreign carrier.
But the new centre-left government said the measures were
insufficient and was refraining from granting another injection of
public funds.    Under a new turnaround plan to be unveiled later
this month, JAL is seen to seek 9,000 job cuts and a debt waiver from
creditors of 250 billion yen ($2.8b) , as well as the departure of
president Haruka Nishimatsu.    But Japan's Nikkei business daily
reported Saturday that the finance ministry and the Development Bank
of Japan, JAL's main creditor, contend the latest turnaround plan
will be too difficult to implement.

Wall Street ponders if rally can run more

  After a historic week for Wall Street that lifted the main
blue-chip index above 10,000, investors are mulling whether the
stock market rally is now over or just getting started.    The rise
of the Dow Jones Industrial Average above 10,000 sparked a spate of
celebrations, but also provoked some scepticism about whether the
market has gotten ahead of the economy and corporate earnings.
The market had already begun a pullback with a sell-off Friday, and
the direction may be determined by the raft of corporate earnings in
the coming week and economic reports, notably in housing.    In the
week to Friday, the blue-chip Dow climbed 1.33 per cent to end at 9,
995.91 as it failed to hold above the key level of 10,000.    The
Standard & Poor's 500 broad- market index advanced 1.51 per cent to
1,087.68 and the tech-heavy Nasdaq composite added 0.82 per cent on
the week to 2,156.80.    Gains over the past week were inspired by
better-than-expected earnings from key firms including JPMorgan
Chase, Goldman Sachs and Google, among others.    But the mood was
dampened by disappointing results later in the week from Bank of
America and General Electric.    Fred Dickson, chief market
strategist at DA Davidson & Co, said the 10,000 level on the Dow is
'a signpost on the investment highway marking a significant distance
recently covered, but not offering any clues about the market's
speed limit or upcoming opportunities or obstacles.'    'A milestone
such as 10,000 may trigger some pre-programmed selling, but on the
other hand it should provide a renewed sense of confidence that the
six month market rally is real and that investors should see
continuing incremental improvement in the prospects of the US
economy,' he added.    Some say the recovery of the Dow to the levels
of just after the collapse of Lehman Brothers last year — but still
well below 2007 records — is a sign that the economy is returning to
normal.    'The speed of recovery in both global asset prices and the
global economy has far surpassed even the most optimistic forecasts
prevailing in the spring of this year,' said Andrew Spence at TD
Securities.    'Looking out over the next six months, the issue is
whether private sector demand can pick up the slack as policy
stimulus peaks — and here there is a significant risk that current and
high growth expectations will be disappointed,' he added.    Bill
George, a professor of management practice at Harvard Business
School, said the 10,000 level is nothing to get excited about.
'This purported milestone isn't a victory. It's nonsense,' he said.
 'We are far from out of the woods. Large companies are still laying
off employees. When we cross the 10 per cent unemployment line,
consumer spending may contract even further.'    But Julian Callow at
Barclays Capital said economic and corporate reports have been
getting better, suggesting better momentum in the US and other major
economies.    'Part of the reason to pay close attention to earnings
is that profitability tends to lead investment,' he said.