Business

Oil prices slip after Mubarak resignation

Oil prices retreated Friday after Egyptian President Hosni Mubarak resigned after 18 days of anti-government protests and handed over power to the military.

Switzerland freezes former leader's assets

Oil prices retreated Friday after Egyptian President Hosni Mubarak resigned after 18 days of anti-government protests and handed over power to the military.

Both the North American and European oil benchmarks traded lower.

Oil prices slipped after Egyptian president Hosni Mubarak's resignation. ((CBC))

Benchmark Light Sweet crude for April delivery closed down 81 cents to $89.13 US per barrel on the New York Mercantile Exchange.

April Brent crude — the European and Asian benchmark — slipped 24 cents to $101.19 US a barrel.

"The only reaction you've seen is in the oil market," Robert Gorman, chief portfolio strategist at TD Waterhouse, told CBC News. Gorman said the markets seem reassured for now that there will be no disruption in oil shipments.

Egypt is not a major producer of oil, but it plays a key role in the industry because it controls the Suez Canal, a major route for oil tankers in two-way traffic to Europe and Asia.

But, said Gorman, investors are still waiting to find out what happens beyond the immediate future.

"The huge question here is, because you have a political vacuum and the question is who or what is going to fill it," he said.

"Given a lack of other information [the markets] are prepared to assume there won't be huge adverse consequences."

Swiss freeze Mubarak assets  

In the minutes after word of his resignation spread, the Swiss Foreign Ministry announced that it was freezing all financial assets in the country possibly belonging to the deposed leader.

"I can confirm that Switzerland has frozen possible assets of the former Egyptian president with immediate effect," a spokesman for the ministry said.

In recent months, the country — which is shedding its reputation as a haven for hiding assets — has also frozen assets belonging to Tunisia's former President Zine al-Abidine Ben Ali as well as those of Ivory Coast's Laurent Gbagbo.

The U.S. dollar traded higher against most major currencies, but the Canadian dollar gained .72 of a cent to trade at 101.14 cents US after Statistics Canada reported the country's exporters had the best month in 30 years and Canada's trade balance moved back into a $3 billion surplus in the final month of 2010 for the first time since last February.

Gold in New York was two dollars lower at $1,359.90 US an ounce.

In Toronto, the S&P/TSX composite index closed down 73.81 points 13,766.76.

In New York, the Dow Jones industrial average was up 43.97 points at 12,273.26.

The Nasdaq composite index gained 18.99 points to 2,809.44, while the S&P 500 index was 7.28 points higher at 1,329.15.

Egypt index fund gains

In a sign that investors were growing less anxious, Egypt's five-year credit default swaps — derivatives that provide insurance against a government default on its loans — dropped .24 of a percentage point to 3.13 per cent, according to CMA data.

Meanwhile, the Market Vectors Egypt Index ETF — which allows foreign investors to trade in Egyptian stocks — gained almost 6.7 per cent to almost $19.

The announcement of Mubarak's resignation was a rare bit of good news for millions in a nation that had seen the economy grind to a standstill in the first week of the demonstrations. 

As banks closed, businesses were shuttered and lawlessness broke out, tensions built over the past 18 days in an outpouring of protester vitriol directed against a man who had ruled Egypt for nearly 30 years. 

Even before the announcement, it was unclear whether the Egyptian Exchange would reopen as scheduled on Sunday after a two-week closure. The market's benchmark EGX30 index had dropped almost 17 per cent in two consecutive trading sessions before it closed on Jan. 28.

Also in question was whether the Egyptian pound might endure another pummeling or whether foreign capital outflows would continue and at what pace.

With files from The Canadian Press and The Associated Press

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