Canada, U.S. markets fall amid inflationary fears and higher oil prices
BNN Bloomberg
Canadian and U.S. stock markets fell on Thursday as higher oil prices stoked inflationary fears.
“Every day is the same day, almost like Groundhog Day. It’s all about the price of oil. Oil prices go higher, the market goes lower,” said Allan Small, senior investment adviser at iA Private Wealth.
Oil prices moved higher as Iran intensified its attacks on oil and gas facilities around the Persian Gulf in response to an Israeli attack on an important Iranian natural gas field. The attacks added to fears that fighting may knock out production of oil and gas in the Gulf for a long time, which would mean high prices could last a while and cause inflation to rip higher around the world.
The May crude oil contract was up nine cents US at USUS$95.55 per barrel. Meanwhile, Brent crude, the international standard, briefly rose above USUS$119 per barrel in the morning before settling at USUS$108.65.
“That’s the risk … inflation will start to rise based on higher energy, oil prices (and) natural gas prices,” Small said.
But if the conflict were to end in the coming days or weeks, Small said the affects on inflation would be minimal.
Bank of Canada holds rate at 2.25 per cent as growth weakens and oil-driven inflation risks rise amid geopolitical uncertainty.
U.S. stocks are sinking Wednesday after a discouraging report said inflation was primed to worsen, even before the war with Iran sent oil prices spiking.
Jay Allen is a fan of U.S. President Donald Trump, and voted for him on the belief that the Republican would cut taxes and trim regulations, helping his manufacturing business in northeast Arkansas.
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Two Canadian cargo ships are stuck in the Persian Gulf and unable to pass through the blocked Strait of Hormuz as the war in Iran continues.
U.S. stocks are sinking Wednesday after another climb for oil prices raised worries about inflation, which may have been primed to worsen even before the war with Iran began.
U.S. crude stocks rose while gasoline and distillate inventories fell last week, the Energy Information Administration said on Wednesday.
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A key question hangs over the Federal Reserve’s two-day meeting that ends Wednesday: Will central bank policymakers still reduce short-term interest rates this year, now that the Iran war has sent oil prices higher and gas prices spiking? Or will they have to stand pat for months to see how the conflict plays out?
Wall Street followed global markets higher Wednesday and the price of U.S. crude fell eased despite a new barrage of attacks by Iran on its Gulf neighbors.
Jay Allen is a fan of U.S. President Donald Trump, and voted for him on the belief that the Republican would cut taxes and trim regulations, helping his manufacturing business in northeast Arkansas.
Shares advanced Wednesday in Europe and Asia as oil prices fell back slightly despite a barrage of attacks by Iran on its Gulf neighbours.
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