Oil prices climb as fresh strikes target infrastructure

Oil prices rose again Tuesday as Iran launched fresh attacks on crude-producing neighbours, while stock markets were higher ahead of key central bank meetings.

Prices rebounded from the previous day’s decline, which came after the head of the International Energy Agency said stockpiles could be tapped again if needed.

Equity markets mostly gained after US chip titan Nvidia said it expected to make at least $1 trillion in revenue through the end of 2027 and several airlines reported better-than-expected revenue in the first quarter, taking some attention away from conflict in the Middle East.

Wall Street’s three major indices were higher in early afternoon trading, while major European markets ended the day in the green.

Shares in Delta Airlines climbed 4.6 percent while American Airlines shares added 2.9 percent.

Stock markets have shown “resilience”, said David Morrison, senior market analyst at Trade Nation, but “there was undoubtedly a cautious tone as investors weighed geopolitical risks and shifting monetary policy expectations”.

Earlier in Asia, Hong Kong, Seoul and Taipei closed higher, though Tokyo and Shanghai dipped.

Investors are awaiting a slew of central bank decisions this week, with expectations that interest rates will remain unchanged as elevated energy prices threaten to drive up inflation, even if the labour market appears to be softening in the United States.

The caution ahead of the key bank meetings left currency markets in a holding pattern, with the dollar little changed against most of its peers.

The US Federal Reserve “is in a bind”, said eToro US investment analyst Bret Kenwell.

Slower growth and a softer labour market would normally argue for easing monetary policy. But inflation remains sticky, while surging oil prices add another layer of uncertainty to the outlook,” he added.

Australia’s central bank hiked its key interest rate Tuesday, pointing to “sharply higher fuel prices”.

International benchmark Brent North Sea crude remained above $100 per barrel in Tuesday trading.

“The longer the oil price stays above $100 per barrel, the louder the alarm bells for the market over inflation risks,” said Dan Coatsworth, head of markets at AJ Bell.

A new drone strike on Tuesday hit the Fujairah oil complex, which sits on the Gulf of Oman and enables the UAE to bypass the Strait of Hormuz for some exports.

Two drones targeted a major southern Iraqi oil field, an oil ministry spokesperson told AFP, after the second attack in four days.

“The next stage of the Iran-US war has seen both sides step up attacks on energy infrastructure,” said Kathleen Brooks, research director at trading group XTB.

She added that concerns are “shifting from a shipping crisis caused by the closure of the Strait of Hormuz to an oil supply crisis, where energy infrastructure across the Gulf is a target.”

President Donald Trump, whose call for assistance from allies to reopen the Strait of Hormuz to oil traffic has largely been rebuffed, said Tuesday that US forces “no longer need” help.

– Key figures at around 1630 GMT –

Brent North Sea Crude: UP 1.8 percent at $102.04 per barrel

West Texas Intermediate: UP 1.7 percent at $95.05 per barrel

New York – Dow: UP 0.3 percent at 47,067.81 points

New York – S&P 500: UP 0.3 percent at 6,722.27

New York – Nasdaq Composite: UP 0.4 percent at 22,471.19

London – FTSE 100: UP 0.8 percent at 10,403.60 (close)

Paris – CAC 40: UP 0.5 percent at 7,974.49 (close)

Frankfurt – DAX: UP 0.7 percent at 23,730.92 (close)

Tokyo – Nikkei 225: DOWN 0.1 percent at 53,700.39 (close)

Hong Kong – Hang Seng Index: UP 0.1 percent at 25,868.54 (close)

Shanghai – Composite: DOWN 0.9 percent at 4,049.91 (close)

Euro/dollar: UP at $1.1530 from $1.1510 on Monday

Pound/dollar: UP at $1.3346 from $1.3327

Dollar/yen: DOWN at 158.93 yen from 159.14 yen

Euro/pound: UP at 86.40 pence from 86.36 pence

burs-rl/rmb

Culled from vanguard