REUTERS/Essam Al-Sudani
- Crude oil jumped Monday after President Donald Trump threatened Iran and oil producers signaled they would maintain supply cuts.
- “If Iran wants to fight, that will be the official end of Iran,” Trump tweeted. “Never threaten the United States again!”
- The OPEC cartel of oil-producing countries plans to reduce inventories “gently” with an eye on the needs of a “fragile” market.
Crude-oil prices jumped by as much as 1.6% on Monday after US President Donald Trump threatened the “official end of Iran” and oil producers signaled they would maintain supply cuts.
Responding to Iran’s suspension of its commitments to the nuclear deal it signed in 2015 and its threats to resume production of enriched uranium, Trump tweeted: “If Iran wants to fight, that will be the official end of Iran. Never threaten the United States again!”
At the same time, Saudi Arabia’s energy minister, Khalid al-Falih, said there was consensus among the OPEC cartel and other oil-producing countries to reduce crude inventories “gently” while remaining responsive to the needs of a “fragile market,” according to Reuters.
“Oil has already rallied around 40% since the start of the year, thanks mainly to OPEC limiting supply,” said Jasper Lawler, the head of research at London Capital Group. “Add into the equation rising Middle-Eastern tensions as Iran retaliates to US measures, and oil looks well supported at these levels.”
Stock markets were muted as traders waited for the next twist in the US-China trade war. Following the Trump administration’s blacklisting of Huawei last week, Google has suspended most of its business with the Chinese telecom giant, meaning future Android phones won’t have access to apps such as Gmail, YouTube, or Google Maps. China dismissed the US sanctions on Huawei as “petty tricks” last week, suggesting retaliation was an option.
Here’s the market roundup as of 10:40 a.m. (5:40 a.m. ET):
- Asian indexes closed lower, with the Shanghai Composite down 0.4%, the SZSE Component down 0.9%, and Hong Kong’s Hang Seng down 0.6%.
- European equities dropped, with Germany’s DAX down 0.7%, the Euro Stoxx 50 down 0.8%, and Britain’s FTSE 100 down 0.5%.
- US stocks were set to open lower. Futures underlying the Dow Jones Industrial Average and the S&P 500 were down about 0.2%, while Nasdaq futures were down 0.5%.
- Oil pared earlier gains. Brent crude rose about 0.5% to $72.60, while West Texas Intermediate crude rose about 0.4% to $63.20.