Oil up, Wall Street dips after Trump rejects Iran truce offer / Photo: Kevin Dietsch - GETTY IMAGES NORTH AMERICA/AFP
Oil up, Wall Street dips after Trump rejects Iran truce offer
Oil futures surged more than four percent before retreating from their latest peak on Monday, alongside gains for natural gas and diesel prices, after US President Donald Trump rejected Iran's offer of a seven-day truce.
High inflation concerns lifted government bond yields as markets bet on the US Federal Reserve hiking interest rates in October after already tightening this month, supporting the dollar.
Wall Street indices nonetheless began the session in the red with the Dow, the broader-based S&P 500 and the tech-heavy Nasdaq off around half of one percent half an hour into trading.
European stock markets conversely were ahead with London, Frankfurt and Paris adding some 0.6 percent two hours from the close, after a mixed showing across Asia, with markets also reacting to Washington and Beijing extending their trade truce at the end of last week.
"There was renewed strength in oil prices after comments from President Trump that he had rejected Iran's latest proposal to reopen the Strait of Hormuz," noted AJ Bell investment director Russ Mould.
International benchmark Brent crude was up 2.2 percent at $106.60 per barrel around 1400 GMT with West Texas Intermediate adding 2.0 percent to $94.33 per barrel.
With no sign of an imminent end to the war pitting the United States and Israel against Iran, European natural gas prices also rose on Monday, while average diesel prices in the United Kingdom hit a record high just shy of two pounds per litre, according to the RAC motoring organisation.
On the downside, "gold prices have slumped from their summer highs as investors have reacted to the stronger dollar -- which makes the metal more expensive for non-dollar buyers", Mould explained.
Iran set out a plan at the United Nations General Assembly last week for a halt in hostilities that would see the Strait of Hormuz reopened, easing a crippling energy supply crisis that has jacked up global costs.
The waterway is key to the world's oil and gas deliveries and is now central to the conflict between the US and Iran, particularly with the Iran-backed Houthis seizing Yemen's entire Red Sea coast, including the Bab al-Mandab Strait, a vital shipping lane.
Iran was standing by its conditions for reopening the Strait, including the release of frozen assets, the lifting of sanctions on its oil and an end to the United States' naval blockade.
- Key figures at around 1340 GMT -
Brent North Sea Crude: UP 2.2 percent at $106.60 per barrel
West Texas Intermediate: UP 2.0 percent at $94.33 per barrel
New York - Dow: DOWN 0.5 percent at 51,586.28 points
New York - S&P 500 : DOWN 0.4 percent at 7,710.07
New York - Nasdaq: DOWN 0.6 percent at 26,915.33
London - FTSE 100: UP 0.5 percent at 10,748.72
Paris - CAC 40: UP 0.7 percent at 8,133.51
Frankfurt - DAX: UP 0.4 percent at 25,510.85
Tokyo - Nikkei 225: DOWN 0.7 percent at 65,877.62 (close)
Hong Kong - Hang Seng Index: UP 0.5 percent at 24,642.51 (close)
Shanghai - Composite: DOWN 1.7 percent at 3,823.62 (close)
Euro/dollar: DOWN at $1.1363 from $1.1399 on Friday
Pound/dollar: UP at $1.3251 from $1.3251
Dollar/yen: DOWN at 157.21 yen from 157.20 yen
Euro/pound: DOWN at 85.76 pence from 86.03 pence
burs-bcp/ajb/cw/rmb
N.Walker--MC-UK
