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News Wrap: Egypt Unrest Rattles Energy Market, Prompts Senate Hearing

February 3, 2011 at 5:26 PM EDT

HARI SREENIVASAN: The turmoil in Egypt has been rippling through the oil market, sending prices sharply higher in recent days. A top analyst told a Senate hearing today the market is concerned about the Suez Canal and the wider region.

JIM BURKHARD, Cambridge Energy Research Associates: The oil market is always fearful when there is a — a threat to big oil exporters in North Africa and even bigger ones clustered in the Persian Gulf.

Egypt’s not a major exporter. It’s, in fact, a slight importer, but about 2 to 4 percent of global supplies does transit Egypt. And what happens in Egypt obviously has an impact beyond its borders in the Middle East.

HARI SREENIVASAN: Oil prices fell slightly today, but remained above $90 a barrel.

World food prices have reached record highs, and they have helped fuel the protests in Egypt and elsewhere. The U.N. Food and Agriculture Organization reported today its food price index rose nearly 3.5 percent in December. That makes seven straight months of increases.

The after-effects of this week’s huge winter storm lingered over the Midwest and the Northeast today.

NewsHour correspondent Kwame Holman has our report.

MAN: I haven’t seen it this bad for — since the ’60s.

KWAME HOLMAN: Across much of the country, people began the monumental task of digging out from a storm that dropped up to two feet of snow, plus heavy coatings of ice.

In Chicago, plows were out in force, and Lake Shore Drive reopened early this morning after being shut down for 34 hours. Tow trucks finally had cleared nearly 1,500 cars left stranded by the blizzard.

RICHARD DALEY (D), Mayor of Chicago: Less than 24 hours after the storm ended, we’re heading back towards normal conditions, but we still have a long way to go.

KWAME HOLMAN: Some air travel resumed at the city’s O’Hare International Airport, with full service expected to resume Friday.

But conditions still were dangerous in many places. A pickup truck skidded off an icy bridge in Oklahoma, fell 80 feet into a frozen river and killed two people. And the heavy snow crushed buildings across the Northeast and New England, where roofs already were straining under the weight of snow from previous storms.

Meanwhile, the weight of ice wreaked havoc with trees and power lines in state after state. Thousands of people were forced to seek refuge in shelters in Ohio and elsewhere.

MAN: Man, I am tired of it.


MAN: I am tired of it.

KWAME HOLMAN: And crews worked through a second night to get the lights and heat back on. In all, residents in 30 states felt the storm’s effects, and even as the snow moved on, extreme cold lingered in many places.

HARI SREENIVASAN: In Australia, cleanup was under way a day after one of the strongest storms on record blasted Queensland state. Cyclone Yasi crashed ashore yesterday with winds up to 170 miles per hour. No deaths were reported, but hundreds of homes were damaged or destroyed. And millions of dollars worth of banana and sugarcane crops were shredded.

Republicans in the U.S. House have fired their first salvo in the budget war. They called today for cutting at least $35 billion in domestic spending this year. That’s a 20 percent reduction to levels in place before President Obama took office. The Republicans campaigned on cutting $100 billion in current spending, but they have acknowledged that won’t be possible, since the budget year is almost four months old.

The chairman of the Federal Reserve warned Congress and the president today to get serious about the deficit. Ben Bernanke said it is critical to a strong economic recovery. He also told a Senate hearing that growth this year will not be strong enough to help the unemployed.

BEN BERNANKE, Federal Reserve chairman: It will be several years before the unemployment rate has returned to a more normal level. Until we see a sustained period of stronger job creation, we cannot consider the recovery to be truly established.

HARI SREENIVASAN: The latest unemployment numbers will come tomorrow. But today the Labor Department reported first-time claims for jobless benefits fell last week.

Wall Street made modest gains on the news today. The Dow Jones industrial average gaining — added 20 points to close at 12,062. The Nasdaq rose four points to close near 2,754.

In Haiti today, election officials set the field for next month’s presidential runoff. Former first lady Mirlande Manigat will face off against local musician and opposition leader Michel Martelly. Martelly’s supporters cheered the announcement. They had rioted in December, after officials initially placed the ruling-party candidate ahead of him.

Those are some of the day’s major stories.