As the US-Israel war on Iran entered its third week, Wall Street and most European stock markets climbed after Asian stocks mainly dipped.
International benchmark Brent North Sea crude dropped back 2.8 percent to US$100.21, while the main US contract West Texas Intermediate fell 5.3 percent to US$93.50.
The price falls came after a Pakistani oil tanker became the first non-Iranian tanker to transit the Strait of Hormuz with its automatic transponder system activated, according to monitor Marine Traffic.
But attacks on Middle Eastern oil facilities continued, with drones hitting major oil fields in the United Arab Emirates and Iraq on Monday.
The head of the International Energy Agency, Fatih Birol, said member countries could unlock more oil from strategic stocks “if needed.”
IEA member countries already agreed last week to make their biggest-ever release of 400 million barrels.
Oil prices were “certainly the main driver today for stocks because with lower oil prices you also got lower bond yields and that combination offers a nice start for buy-the-dip interest,” said Patrick O’Hare of Briefing.com.
This week will see several central banks, including the US Federal Reserve and the European Central Bank, release rate decisions, which O’Hare said had investors in a wait-and-see mood.
“Markets are going to hear a lot about how these policymakers are thinking about this current situation, its effect on inflation and their potential policy posture,” he said.
“We will probably have a lot of central banks sounding reluctant to cut rates, so the markets will have to dial back with some rate-cut hopes for this year.”
Tech stocks led the advance on Wall Street, with Nvidia climbing 1.7 percent after it said it expects to make at least US$1 trillion in AI chip revenue through the end of 2027.
The S&P 500 rose 1 percent, to 6,699, the Dow rose 0.8 percent, to 46,946, while the Nasdaq rose 1.2 percent, to 22,374. (AFP)
Edited by Cecil Wong
