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Markets Recoil, and Then Ease, as Traders Digest Iran Attack Markets Recoil, and Then Ease, as Traders Digest Iran Attack
(about 3 hours later)
HONG KONG — Oil prices spiked and then fell back on Wednesday, and global stocks were flat or moderately lower, after Iran launched missiles at American forces based in Iraq. Oil prices spiked and then fell back on Wednesday, and global stocks were flat or moderately lower, while U.S. stocks rose slightly, after Iran launched missiles at American forces based in Iraq.
The markets’ concerns eased as Iran’s foreign minister suggested that he was ready to stand down for now and President Trump suggested the damage from the attack had been limited, raising hopes of a restrained conflict in a region critical to world oil supplies. The markets’ concerns eased as Iran’s foreign minister suggested that he was ready to stand down for now and President Trump suggested the damage from the attack had been limited, raising hopes of a restrained conflict in a region critical to world oil supplies.
Brent crude, the international benchmark, jumped about 5 percent, as high as $71.75 a barrel, immediately after news of the Iranian missile attack. But within hours it had fallen to $68.60, about 0.2 percent higher than the day before.Brent crude, the international benchmark, jumped about 5 percent, as high as $71.75 a barrel, immediately after news of the Iranian missile attack. But within hours it had fallen to $68.60, about 0.2 percent higher than the day before.
West Texas Intermediate crude also jumped and then receded, and was trading at about $62.95 a barrel, about 0.2 percent lower from Tuesday. West Texas Intermediate crude also jumped and then receded, and was trading at about $62.95 a barrel, about 0.2 percent lower from Tuesday. Although prices jumped soon after the killing, the upward momentum quickly eased.
In stock trading, Britain’s FTSE 100 was unchanged in late-morning trading, while Germany’s DAX fell by about 0.2 percent. In Asia, Hong Kong’s Hang Seng ended the day 0.8 percent lower, and Japan’s Nikkei fell 1.6 percent.In stock trading, Britain’s FTSE 100 was unchanged in late-morning trading, while Germany’s DAX fell by about 0.2 percent. In Asia, Hong Kong’s Hang Seng ended the day 0.8 percent lower, and Japan’s Nikkei fell 1.6 percent.
Futures on Wall Street pointed to a small upswing when trading starts. On Wall Street, the S&P 500 climbed at the start of trading.
Mohammad Javad Zarif, Iran’s foreign minister, said in a tweet that the nation had “concluded proportionate measures in self-defense.” The statement followed two missile attacks on bases in Iraq housing American forces in response to the killing last week of Maj. Gen. Qassim Suleimani.Mohammad Javad Zarif, Iran’s foreign minister, said in a tweet that the nation had “concluded proportionate measures in self-defense.” The statement followed two missile attacks on bases in Iraq housing American forces in response to the killing last week of Maj. Gen. Qassim Suleimani.
In his own tweet shortly after, Mr. Trump suggested that damages and casualties sustained by American forces had been minimal, though the assessment was continuing. “All is well!” he said on Twitter.In his own tweet shortly after, Mr. Trump suggested that damages and casualties sustained by American forces had been minimal, though the assessment was continuing. “All is well!” he said on Twitter.
The risk of a war between the United States and Iran, in the world’s most important oil producing region, the Persian Gulf, has sent shudders through the oil markets in recent days. The fear is that an attack on shipping from the Gulf, or damage to the oil fields of a major producer in the area like Iraq or Saudi Arabia, could restrict global supplies. The risk of a war between the United States and Iran, in the world’s most important oil producing region, the Persian Gulf, has sent shudders through the oil markets in recent days. The fear is that an attack on shipping from the Gulf, or damage to the oil fields of a major producer in the area like Iraq or Saudi Arabia, could restrict global supplies.
On Wednesday, officials from the Organization of the Petroleum Exporting Countries, the producers’ group, sought to calm fears that the crisis could lead to a major disruption in supplies.On Wednesday, officials from the Organization of the Petroleum Exporting Countries, the producers’ group, sought to calm fears that the crisis could lead to a major disruption in supplies.
“We are not forecasting any shortage of supply unless there is a catastrophic escalation, which we don’t see,” Suhail Mohamed Faraj al-Mazrouei, the oil minister of the United Arab Emirates, told reporters in Abu Dhabi on Wednesday, Reuters reported.“We are not forecasting any shortage of supply unless there is a catastrophic escalation, which we don’t see,” Suhail Mohamed Faraj al-Mazrouei, the oil minister of the United Arab Emirates, told reporters in Abu Dhabi on Wednesday, Reuters reported.
Markets have become so accustomed to a surplus of oil in the global market that they are not as worried about tensions in the Persian Gulf region as they once were.
“Oil has become a broken barometer for gauging Middle East tensions,” Helima Croft, head of global commodity strategy at RBC Capital Markets, an investment bank, said on Tuesday. “It now only reacts after something seismic happens.”