London (AFP) – World oil prices soared 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 banked gains of about 2.5 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, “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 has upset the energy market, which in turn is creating some inflation upset that is lifting Treasury yields,” O’Hare added.
Oil futures have risen strongly in recent weeks, after having fallen 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.
While stock market traders kept a close watch on the Mideast war developments, focus was also firmly on the technology sector, as it has been for several weeks. “European stock indices are brushing off the rise (oil prices)…after a stunning rally for US chip stocks on Tuesday,” noted Kathleen Brooks, research director at traders XTB.
However, that rally appeared to have faltered, with Wall Street’s main indices opening lower, including the tech-heavy Nasdaq Composite shedding 0.6 percent. The Philadelphia Semiconductor Index, which tracks the world’s main chip stocks, fell 1.9 percent after having risen more than five percent on Tuesday.
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.
Asia’s main stock markets closed mixed on Wednesday, as investors eagerly awaited earnings updates from technology giants.
– Key figures around 1330 GMT –
Brent North Sea Crude: UP 2.7 percent at $93.42 per barrel
West Texas Intermediate: UP 2.4 percent at $86.39
New York – Dow: DOWN 0.1 percent at 52,164.60
New York – S&P 500: DOWN 0.3 percent at 7,487.35
New York – Nasdaq: DOWN 0.6 percent at 25,681.32
London – FTSE 100: UP 1.1 percent at 10,704.37
Paris – CAC 40: UP 0.9 percent at 8,440.97
Frankfurt – DAX: UP 0.5 percent at 25,139.42
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 $1.1419 from $1.1406 on Tuesday
Pound/dollar: DOWN at $1.3379 from $1.3383
Euro/pound: UP at 85.32 pence from 85.20 pence
Dollar/yen: DOWN at 163.06 yen from 163.17
© 2024 AFP
