NEWS FEED
Zoom
10:12 21 May
TOP 5

Oil soars after Trump dumps Iran nuclear deal, stocks gain


Crude oil prices rose to 3-1/2-year highs on Wednesday following President Donald Trump’s decision to withdraw the United States from a nuclear deal with Iran, a move that helped lift equity markets as Exxon Mobil, Chevron and other oil majors rallied, APA reports quoting Reuters.

 

Contracts for Brent, the global crude benchmark, and for the U.S. benchmark jumped almost 3 percent to highs last seen in November 2014 after Trump on Tuesday abandoned the deal and announced the “highest level” of sanctions against Iran, APA reports quoting Reuters.

 

Trump’s move raises the risk of conflict in the Middle East and casts uncertainty over oil supplies in an already tight market.

 

U.S. crude CLcv1 rose $1.95 to $71.01 per barrel and Brent LCOcv1 was last at $77.09, up $2.24.

 

The energy sector in equity markets rallied, helping lift European stocks, a gauge of world equity performance and the broad U.S. market on Wall Street.

 

“It’s the clear leader today. It’s overwhelming almost all the other sectors in terms of its impact on today’s market action,” said Michael Arone, chief investment strategist at State Street Global Advisors in Boston.

 

Exxon Mobil (XOM.N) rose 1.65 percent, Chevron (CVX.N) gained 1.36 percent, Royal Dutch Shell [RDSb.L] rose 3.38 percent and BP [BP.L] rose 3.92 percent.

 

While crude oil prices have rallied over the past 12 months, energy stocks have basically gone nowhere, which is helping their gains on Wednesday, Arone said.

 

“Now we’re starting to see that gap close, so this could be a bit of a short-term rally for the energy sector,” he said.

 

MSCI’s gauge of equity performance in 47 countries .MIWD00000PUS gained 0.25 percent, with Exxon and BP the second- and third-largest contributors.

 

Energy added the most points to the pan-European FTSEurofirst 300 index .FTEU3 of regional stocks, rising 0.65 percent with Royal Dutch Shell and BP leading shares higher.

 

On Wall Street, stocks traded higher to mixed, but the S&P energy sector .SPNY gained 2.1 percent, led by Exxon Mobil.

 

The Dow Jones Industrial Average .DJI rose 10.19 points, or 0.04 percent, to 24,370.4. the S&P 500 .SPX gained 6.71 points, or 0.25 percent, to 2,678.63 and the Nasdaq Composite .IXIC added 6.72 points, or 0.09 percent, to 7,273.62.

 

Equities have traded in a range recently on concerns about U.S.-China trade negotiations, a disparate view by the Federal Reserve and investors over inflation and the economy, and the notion that earnings and growth have peaked, Arone said.

 

“Those things certainly have the market in a bit of a sideways pattern,” he said.

 

The dollar fell from its strongest levels in 2018 against a basket of currencies due to mild profit-taking, but the greenback was expected to resume its rise due to solid U.S. economic growth and further monetary tightening by the Fed.

Related news releases

VİDEO NEWS

PHOTO NEWS

  • USD rate for tomorrow announced
  • Baku café explosion: Two dead, two injured - UPDATED
+2
EXCHANGE RATE
FOREX
/ 22 May, 2018

USD
1.7
 
EUR
1.9978
 
RR
0.0273