BANGKOK – Oil prices extended gains above $89 a barrel Monday in Asia as anti-government protests continued to rock Egypt and threatened to spread unrest across the oil-rich Middle East.
Benchmark crude for March delivery was up 19 cents at $89.53 a barrel at midafternoon Bangkok time in electronic trading on the New York Mercantile Exchange. The contract shot up $3.70, or 4.3 percent, to settle at $89.34 on Friday.
Amid the instability in Egypt, jittery traders have pulled money from stocks to buy oil, gold and the dollar, which are considered less risky in uncertain times.
The uprising in Egypt follows protests this month that forced out the president of Tunisia, who fled to Saudi Arabia. Anti-government protests have also rocked Lebanon and Yemen.
Even if the unrest doesn't spread to a major oil producer in Africa or the Middle East, "the risks are still high as Egypt plays a key role in the global oil markets" because of the Suez Canal and Suez-Mediterranean pipeline which are major conduits for Persian Gulf oil to reach Europe and North America, according to Monday's Schork Report on the energy markets.
In other Nymex trading in February contracts, heating oil rose 1.1 cent to $2.70 a gallon and gasoline added 1.1 cent to $2.468 a gallon. Natural gas futures for March delivery were up 0.7 cent at $4.33 per 1,000 cubic feet.
In London, Brent crude was up 5 cents at $89.50 a barrel ICE Futures exchange.
TOKYO (Reuters) – Honda Motor Co raised its cautious annual outlook beyond market expectations as a recovery in the key U.S. market helps counter the strong yen and sliding Japanese sales, which dragged its third-quarter profits down 29 percent.
Japan's top automakers are all expected to report a sharp decline in October-December profits as the end of subsidies for eco-friendly cars has hammered domestic sales since October.
A 6 yen fall in the dollar and higher raw materials costs are also seen erasing the positive effect of global sales gains.
But Japanese car makers have also taken steps to reduce fixed costs and boost manufacturing efficiencies in moves expected to keep profit margins relatively healthy, boding well for future earnings as the key U.S. market recovers.
Honda, which fell behind Nissan Motor Co to become Japan's third-biggest automaker last year, raised its operating profit forecast for the year to March 31 to 620 billion yen ($7.55 billion) from 500 billion yen. A survey of 20 analysts by Thomson Reuters I/B/E/S forecasts profit of 594 billion yen.
It lifted its net profit forecast to 530 billion yen from 500 billion yen.
The maker of the popular Accord and Civic models reported a 29 percent fall in October-December operating profit to 125.65 billion yen, from 177 billion yen a year earlier and beating the average 110 billion yen estimated by seven analysts surveyed by Reuters.
Nine-month profits easily exceeded Honda's previous full-year profit forecast.
U.S. RECOVERY, MODEL REVAMPS KEY
Robust sales growth in emerging markets has helped global automakers weather a fall in mature markets such as Europe, and Honda has especially benefited from its lucrative motorcycle business in lower-income countries. Its global motorcycle sales jumped 19 percent to a record 17.95 million units in 2010.
But a convincing recovery in the U.S. car market -- Honda's biggest -- is the main factor that has stoked optimism among investors, sending its shares up about 20 percent over the past three months, outperforming Toyota Motor and Nissan.
While Hyundai Motor stole rivals' thunder in the United States last year with the biggest growth among major brands, many expect Honda to boost its share this year with the upcoming revamping of the high-volume Civic and CR-V models.
Honda's third-quarter net profit, which includes earnings made in China, was 81.12 billion yen, down 40 percent from a year earlier. Revenues fell 5.8 percent to 2.11 trillion yen.
Hyundai last week reported a record quarterly profit, although analysts say competition will heat up for South Korea's top automaker as other popular models such as Toyota's Camry undergo a remodelling.
Before the results were announced on Monday, Honda's shares ended down 1.4 percent at 3,475 yen.
Toyota will report third-quarter results on February 8 and Nissan on February 9.
(Editing by Anshuman Daga and Michael Watson)
TOKYO (AFP) – Japan's Nissan Motor has halted its production in Egypt at least for this week due to deepening turmoil in the country hit by bloody anti-government protests, a spokeswoman said Monday.
Nissan suspended operations at its plant in Giza, south of Cairo, from Sunday for at least a week, spokeswoman Yoshie Yamazaki said.
The plant produces around 10,000 units annually, mainly of X-Trail sport utility vehicles and pick-up trucks.
Six days of protest against President Hosni Mubarak's three-decade rule have shaken Egypt and left at least 125 people dead as the veteran leader clings to power.
Several foreign governments including Japan have said they would evacuate their nationals, while the United States authorised the departure of embassy families.
Among other Japanese firms, electronic maker Panasonic Corp. has urged its employees to postpone business trips to Egypt, Jordan and Yemen, a spokesman said.
Toyota Motor, which sold about 15,000 units in Egypt last year, plans to start assembling 3,000 sport utility vehicles annually in the country from early next year.
"The company is halting any business trips to Egypt for now," said spokesman Paul Nolasco, adding there is no impact yet from the political unrest on the automaker's production plans in the country.