London (AFP) – World oil prices jumped Wednesday, with the benchmark international contract Brent North Sea crude surpassing $95 for the first time in nearly six weeks as the United States and Iran carried out more strikes. Crude futures went on to give up some of the gains but still rose around three percent.
US Secretary of State Marco Rubio said Iran could not be allowed to gain control over traffic through the Strait of Hormuz, through which a fifth of the world’s oil normally flows. While Rubio said the United States remained willing to engage in “constructive negotiations” with Iran, he stated, “the problem we are currently facing is that they are not taking the negotiations seriously.”
Fresh US strikes triggered air defenses in Tehran after President Donald Trump warned he was “not finished” with a war with Iran that has already cost his nation $37.5 billion. Trump later vowed that the United States would bomb Iranian civil infrastructure every time Tehran fired at ships in the strategic Strait of Hormuz.
“Festering concerns that the US-Iran standoff is at risk of heating up further, as opposed to cooling off appreciably soon, are behind the spike in oil prices,” said Briefing.com analyst Patrick O’Hare. Rubio’s comments that Iran is not serious about talks have upset the energy market, which in turn is creating some inflation upset that is lifting Treasury yields, O’Hare added.
Meanwhile, maritime data analyzed by AFP showed that at least nine ships had turned back from crossing the Bab al-Mandab strait at the southern end of the Red Sea after Houthi rebels announced a blockade of Saudi ports. According to maritime data firm Kpler, three of the ships had taken on oil at Saudi Arabia’s Red Sea Yanbu terminal, which is an important means for Riyadh to bypass the Hormuz Strait.
Oil futures have risen strongly in recent weeks, after falling back to pre-war levels on hopes that a deal to end the conflict would hold. The escalation in violence has made a return to $100 crude a realistic prospect should tensions not ease, especially if Saudi Arabia’s Red Sea exports are choked off.
– Tech stock focus –
While stock market traders kept a close watch on the Middle East war developments, focus was also firmly on the technology sector, as it has been for several weeks. “A rotation away from tech has resulted in a better day for European markets overall, which continue to defy the strength in oil,” said Chris Beauchamp, Chief Market Analyst at online trading and investing platform IG.
Tech stocks rebounded on Wall Street on Tuesday, but were having a more difficult day on Wednesday, with the tech-heavy Nasdaq Composite a touch lower in late morning trading in New York. Stocks in firms that make chips, which have been volatile amid investor angst over whether massive AI investments will be profitable, were trading higher overall.
But companies that are massively deploying AI, such as Amazon, Apple, Meta, and Microsoft, were trading sharply lower. The recent pullback in chip stocks following a storming run earlier this year has left investors hungry for an update on AI-related demand and to see if all the big investments into tech infrastructure are paying off, said Russ Mould, investment director at AJ Bell.
Google parent “Alphabet reports tonight, with Intel following tomorrow and Microsoft, Meta…and others next week,” he added. Alphabet’s shares were up 0.7 percent. Asia’s main stock markets closed mixed on Wednesday, as investors eagerly awaited earnings updates from technology giants.
– Key figures around 1530 GMT –
Brent North Sea Crude: UP 3.0 percent at $93.77 per barrel
West Texas Intermediate: UP 2.7 percent at $86.62
New York – Dow: UP 0.2 percent at 52,365.76
New York – S&P 500: UP less than 0.1 percent at 7,515.76
New York – Nasdaq: DOWN 0.1 percent at 25,806.59
London – FTSE 100: UP 1.2 percent at 10,716.97 (close)
Paris – CAC 40: UP 0.9 percent at 8,437.89 (close)
Frankfurt – DAX: UP 0.6 percent at 25,155.41 (close)
Tokyo – Nikkei 225: DOWN 0.2 percent at 66,115.60 (close)
Hong Kong – Hang Seng Index: DOWN 0.95 percent at 24,892.66 (close)
Shanghai – Composite: UP 0.1 percent at 3,867.03 (close)
Euro/dollar: UP at $1.1414 from $1.1406 on Tuesday
Pound/dollar: DOWN at $1.3376 from $1.3383
Euro/pound: UP at 85.33 pence from 85.20 pence
Dollar/yen: DOWN at 163.11 yen from 163.17
burs-bcp-rl/rlp
© 2024 AFP
