Oil breaks above $75 on Mideast jitters
LONDON: Oil traded above $75 a barrel while global stock markets wavered on Wednesday as Iran’s missile attack on Zionist entity fanned fears of a Middle East-wide conflict.
NEW YORK: A trader works on the floor at the New York Stock Exchange.—AFP.
Brent crude, the international benchmark, topped $75 per barrel while West Texas Intermediate, the US contract, was above $72, with both more than three percent higher.
Iran launched its second direct attack on Zionist entity in history on Tuesday, firing what it said were 200 missiles. The attack sent oil prices surging by as much as five percent on Tuesday.
“It is all about Middle East conflict now, when it comes to oil prices,” said Fawad Razaqzada, analyst at City Index and Forex.com. “The extent of Zionist entity’s potential response to Iran will influence how much further geopolitical risk markets are likely to factor in,” he said. Prices could fall if Zionist entity’s has a “measured” response and avoids hitting Iran’s nuclear facilities, he said.
“However, if Zionist entity lures in the US in its fight, or responds with an even bigger attack this time, then watch out for oil prices to potentially sky rocket,” Razaqzada added in a note. Naeem Aslam, analyst at Zaye Capital, said prices could be “flirting near the $100” mark if a really serious threat materializes.
Oil prices had been struggling this year due to concerns over weakness in the Chinese economy and expectations of higher production from Saudi Arabia and seven other members of the OPEC+ crude cartel. “With Zionist entity now expected to retaliate, the chances of further escalation are high, prompting a pivot in (oil) market sentiment from concerns over excess supply to fears of shortages,” said Ricardo Evangelista, senior analyst at ActivTrades.
Equity markets were mixed in Europe and New York, with the Dow flat and the tech-heavy Nasdaq and broad-based S&P 500 in the red in early trading. Frankfurt fell and Paris was flat in afternoon deals but London’s top-tier FTSE 100 index rose slightly, helped by share-price gains for oil giants BP and Shell.
Hong Kong’s stock market surged more than six percent by the close, continuing a sharp rally after China last week unveiled a raft of measures to boost its economy, particularly the troubled property sector. Markets were closed in Shanghai and Shenzhen for a week-long holiday, having also zoomed higher before the break. Tokyo fell more than two percent.
Property developers led the surge in Hong Kong on Wednesday, with Agile Group rocketing 160 percent higher and Sunac China Holdings up more than 75 percent. However, the firms were still at just a fraction of their prices three years ago. While the Middle East conflict has investors worried, they remain focused on the US Federal Reserve’s future plans for interest rates and will look closely at jobs data Friday for clues about the central bank’s next move. — AFP.
