Chatter in the corridors of a Russian courthouse gave the oil markets a chill Wednesday that reverberated through global stock markets, helping push the Nasdaq Composite down almost 2% at its nadir. With Russia's big oil producer, OAO Yukos, embroiled in an ugly dispute over a $3.4 billion unpaid tax bill, the potential for more disruptions is high.

But like Wednesday's short-lived spike in crude, don't expect long-lasting damage from this legal soap opera. (Indeed, crude futures retreated Thursday -- lately down 0.7% to $42.62 per barrel -- as concerns about the Yukos situation retreated, at least for the time being.)

Yukos grumbling aside, the impact of the Russian soap opera on the oil markets ought to be temporary. That's good news for the Nasdaq, which has moved in near lockstep with oil this year, according to research by Refco that my colleague Aaron Task recently unearthed. Nasdaq investors should feel lucky they aren't closer to the problem -- Russia's main bourse fell 6% Wednesday on the Yukos shutdown threat.

Unlike past crude spikes that sparked recessions, this year's move is more a correction from an excessively low price last year than an outright jump in price, according to Professor James Hamilton at the University of California at San Diego, who has studied for almost 10 years the impact of so-called oil price spikes.

Oil was as low as $28 a barrel last September but as high as $36 six months before.

"Episodes that were followed by recessions were invariably associated with dramatic new highs, not simply a correction to an earlier decrease," he wrote.

And because the price increase is mostly due to greater demand for crude, it's the healthy byproduct of a growing economy, he added.

"A booming world economy is good news, not bad," Hamilton explained via email Thursday, suggesting the price increases so far won't cut GDP by more than half of 1%.

That's welcome news for investors fearing that small-cap, fast-growing companies are vulnerable if rising oil prices ignite inflation and/or curb economic growth. It's not a scenario that oil experts see coming to pass, barring an extraordinary spike that might result from a terrorist attack or, say, an overthrow of the government of Saudi Arabia.

Russian Roulette -- Oil Style

Wednesday's imbroglio started after Yukos, which supplies almost 2% of the world's oil, warned that it might be forced to shut down production because of an order to halt asset sales. Crude futures jumped to more than $43 a barrel intraday, the highest level in the contract's 21-year history. The Nasdaq, which had rallied nicely on Tuesday, dropped like a stone to as low as 1832.12 intraday.

As the day wore on, however, investors pondered the Yukos hyperbole and digested reports showing robust supply and demand in the U.S. Oil backed off its high and the Nasdaq recovered most of its losses to finish down 0.6% at 1858.26. And with oil retreating Thursday, shares were on the upswing; the Dow Jones Industrial Average was recently up 0.4% while the S&P 500 was higher by 0.6% and the Comp by 1.3%.

Left out of the initial Yukos coverage was the self-serving nature of the warning to halt oil production. The company has been making increasingly loud noises about the dire impact of the government's case, such as a possible bankruptcy or a production shutdown. The price of crude has responded to the Yukos saga (among other factors), up 30% this year.

Later Wednesday, Russian court authorities flatly denied Yukos' latest scare tactic. "The accusations are absolutely groundless," a deputy chief court bailiff told Interfax. The restriction imposed on Yukos was to prohibit real estate sales, the bailiff said.

More fundamentally, the Russians aren't interested in shutting down or renationalizing their top export industry. Just last week, ConocoPhillips ( COP) CEO Jim Malva was in Russia meeting with President Vladimir Putin to discuss his company's interest in the privatization of a stake in LUKOil, the country's second-biggest oil producer. The meeting followed Russia's announcement that it planned to auction off an 8% stake in LUKOil.

It's true that Yukos isn't the only factor driving the price of oil higher. Uncertainty in Iraq, threatened strikes in Nigeria and an election in Venezuela also are contributing. And if the U.S. and Chinese economies stay on track, demand for oil will keep rising as well. China is responsible for more than one-third of the 2.3 million-barrel-per-day increase in worldwide demand this year, according to the International Energy Agency.

But OPEC is increasing its production target at the end of the month by another 500,000 barrels as well. The group upped its target by 2 million barrels this month. OPEC President Purnomo Yusgiantoro, also Indonesia's energy minister, told reporters in Jakarta this week that the group has the ability to pump more oil to meet demand and keep prices stable. The Yukos situation has had a psychological effect on the market, he said.

By the way, Purnomo is heading to Russia in September. Maybe he can bring some stability there, too.

In keeping with TSC's editorial policy, Pressman doesn't own or short individual stocks. He also doesn't invest in hedge funds or other private investment partnerships. He invites you to send your feedback.

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