NEW YORK, June 15, 2019 (BSS/AFP) – Oil prices rose again Friday in
reaction to geopolitical tension, building on the previous day’s surge
sparked by blasts on two tankers in the Gulf of Oman.
The US government blamed Iran for mysterious explosions on the tankers,
and there were growing fears that Tehran could close the Strait of Hormuz, a
major choke point for world oil shipments.
Despite a potentially disastrous standoff between the two foes, oil
traders were “not getting carried away,” said Craig Erlam, senior market
analyst at OANDA.
Prices jumped by more than four percent at one stage on Thursday as
reports of the attacks in the Gulf of Oman flashed onto traders’ screens, and
added around one percent Friday.
– ‘Not risen too much’ –
“Oil prices may have spiked following the attacks but they have not risen
too much considering the risk that an escalation poses,” Erlam said.
The International Energy Agency said Friday that tepid growth in demand
for oil along with ample supplies from non-OPEC countries will complicate
efforts by the cartel and its allies to boost prices.
In its monthly report, the agency cut its forecast for demand growth this
year for the second month straight — and trimmed its second quarter forecast
as well.
“Global slowdown fears and trade war risks have intensified which has led
to the latest downward revision from IEA,” Erlam told AFP.
– Markets in the red –
Global stock markets meanwhile fell on geopolitical fears, uncertainty
over the China-US trade row and the gloomy outlook for the global economy,
especially following negative economic data out of China.
In Asia, the Hong Kong stock market was again on the back foot, losing 0.7
percent, after the city was rocked this week by violent protests against
government plans for a law that would allow extraditions to China and which
observers warn could erode its attraction for businesses.
Wall Street sagged back into the red, brushing off positive news on the
economy, but clung to slender gains for the week. European stocks were lower
at the closet.
Trading floors have been the scene of unease for weeks since US President
Donald Trump’s shock decision to hit China with higher tariffs despite
expectations the two sides were close to a deal to end their long-running
stand-off.
The uneasiness over the past week has seen the price of gold hit a 15-
month high of around $1,360 per ounce as traders look for safer assets to
shelter from the uncertainty on world markets.
Eyes are now on the G20 summit in Japan later this month where Trump and
his Chinese counterpart Xi Jinping are expected to meet to discuss the trade
frictions. But Trump has threatened tariffs on another $300 billion in
Chinese goods if Xi fails to show.
Markets are taking some comfort from the view the Federal Reserve is
prepared to cut interest rates soon as the economy stutters and the trade war
rumbles along. But it is highly unlikely to happen at next week’s policy
meeting.
– Key figures around 2100 GMT –
Oil – Brent North Sea: UP 75 cents to $62.06 a barrel
Oil – West Texas Intermediate: UP 24 cents to $52.52
New York – Dow: DOWN 0.1 percent to 26,089.61
New York – S&P 500: DOWN 0.2 percent to 2,886.99 (close)
New York – Nasdaq: DOWN 0.5 percent (close) to 7,796.66
London – FTSE 100: DOWN 0.3 percent at 7,345.78 points (close)
Frankfurt – DAX 30: DOWN 0.6 percent at 12,096.40 (close)
Paris – CAC 40: DOWN 0.2 percent at 5,367.62 (close)
EURO STOXX 50: DOWN 0.3 percent at 3,379.19
Tokyo – Nikkei 225: UP 0.4 percent at 21,116.89 (close)
Hong Kong – Hang Seng: DOWN 0.7 percent at 27,118.35 (close)
Shanghai – Composite: DOWN 1.0 percent at 2,881.12 (close)
Euro/dollar: DOWN at $1.1207 from $1.1276
Pound/dollar: UNCH at $1.2672 from $1.2674
Dollar/yen: UP at 108.55 yen from 108.38 yen