Oil prices, stocks cool Tuesday morning on hopes for early end to Iran war
Global News
Stock index futures were steady on Tuesday, as investors hoped for a quicker resolution to the Middle East conflict that has led to a spike in energy prices.
U.S. stock index futures were steady on Tuesday, as investors hoped for a quicker resolution to the Middle East conflict that has led to a spike in energy prices and stoked inflation worries, following U.S. President Donald Trump’s comments on the war.
Crude and natural gas prices eased from the worrying US$120 per barrel mark after Trump said on Monday that the U.S.-Israeli conflict with Iran could be nearing an end, sooner than his earlier four-to-five-week timeline.
However, the enthusiasm came with an element of caution as Iran said it would continue its oil blockade through the region, prompting Trump to threaten stronger military retaliation.
Energy producers in the Middle East are yet to resume full-scale production, and shipping costs are likely to be elevated for a while.
“There is still the risk that the conflict and/or disruption to global oil supplies could drag on for longer than President Trump desires as the outcome is not entirely dependent on U.S. military plans,” analysts at MUFG said in a note.
Still, lower energy prices on Tuesday offered some relief to beaten-down travel stocks. Airlines American and Delta gained 1.6 per cent and 0.7 per cent, respectively, in premarket trading, while cruise companies Carnival and Royal Caribbean rose marginally.
Energy companies ConocoPhillips and Exxon Mobil were down 1.4 per cent and 0.7 per cent, while Occidental fell three per cent.
Surging crude prices since the start of the conflict have revived concerns that the U.S. economy could slip into stagflation and complicate the Federal Reserve’s work, as data also suggested the labor market was weakening.
