Hong Kong (AFP) – Oil prices edged up Friday after the previous day’s wild swings, with investors awaiting the next move in the Middle East crisis, while Asian stocks rose in holiday-thinned trade following a tech-led record day on Wall Street.
With peace talks between the United States and Iran stalled for the past week, there appears to be little sign that they will agree on a deal to reopen the Strait of Hormuz any time soon, choking off a fifth of the world’s oil and gas supplies. After tumbling early in April on news of a ceasefire between the rivals, crude has spiked in recent weeks amid stuttering negotiations. The prices soared Thursday after Axios reported that Donald Trump would be briefed on potential fresh military strikes. The report compounded fears after the US president warned that the blockade of Iranian ports could last months.
Brent for June delivery hit a peak above $126 before easing back to end at $114, which was down for the day. Its July contract, which had been cheaper, started Friday by rising more than one percent. West Texas Intermediate’s June contract, which was still being traded, was also slightly up.
Investors are now keeping an eye on Washington and Tehran, hoping for fresh moves towards ending the crisis — which is hammering the global economy — with the British and European central banks warning of a spike in inflation. Meanwhile, the United States is seeking to assemble an international coalition of allied states and shipping firms to coordinate safe passage through Hormuz, while maintaining its blockade of ships serving Iran, a State Department official told AFP.
That came as International Energy Agency chief Fatih Birol warned that the world faced a “major energy and economic challenge” as oil prices soar and warned of “the biggest energy crisis in history.” UN chief Antonio Guterres said the closure of Hormuz was “strangling the global economy” and that even if restrictions were lifted today, “supply chains will take months to recover, prolonging lower economic output and higher prices.”
Still, stocks rose on a day when the majority of markets in Asia Pacific were shut for a holiday. Tokyo, Sydney, and Wellington were all up. But London opened lower, while Paris and Frankfurt were also closed. The gains were helped by tech firms, tracking Wall Street’s sharp gains that saw the S&P 500 and Nasdaq once again end at record highs, thanks to strong earnings and economic data. Google parent Alphabet soared 10 percent after it posted on Wednesday forecast-topping profits and solid revenue across its major divisions.
After the market close on Thursday, Apple said earnings beat expectations, thanks to strong iPhone demand. “The market firmly bought into Wednesday’s solid earnings story from the hyperscalers, with risk appetite also backstopped by the broader path on the geopolitical front continuing to lead towards de-escalation,” said Pepperstone’s Michael Brown. “My view is still that the ‘path of least resistance’ leads higher for stocks, and that dips still represent buying opportunities.”
Meanwhile, the US Commerce Department estimated that the world’s biggest economy grew by an annual rate of 2.0 percent in the first three months of this year. A key factor was a surge in artificial intelligence investments, although consumer spending cooled.
On currency markets, the yen held up against the dollar a day after surging on speculation that Japanese authorities had stepped in to provide support. The unit finished Thursday just above 157 per dollar, compared with 160.72 earlier in the day. Officials had recently warned about moves in the market that had seen the yen drop, suggesting they were ready to intervene. But the country’s top currency official, Atsushi Mimura, refused to comment on suggestions Japan had stepped in, but said authorities were in close communication with US counterparts.
– Key figures at 0715 GMT –
Brent North Sea Crude: UP 1.3 percent to $111.85 a barrel
West Texas Intermediate: UP 0.8 percent at $105.90 a barrel
Tokyo – Nikkei 225: UP 0.4 percent at 59,513.12 (close)
Hong Kong – Hang Seng Index: Closed for a holiday
Shanghai – Composite: Closed for a holiday
London – FTSE 100: DOWN 0.4 percent at 10,336.86
Dollar/yen: UP at 156.70 yen from 156.60 yen on Thursday
Euro/dollar: UP at $1.1733 from $1.1731
Pound/dollar: UP at $1.3607 from $1.3602
Euro/pound: DOWN at 86.23 pence from 86.25 pence
New York – Dow: UP 1.6 percent at 49,652.14 (close)
© 2024 AFP
