WEB DESK: Oil prices surged on Monday, with Brent crude approaching $107 per barrel after attacks by Yemen’s Iran-backed Houthi movement on Saudi Arabia heightened concerns over global energy supplies ahead of the Northern Hemisphere winter.
Uncertainty surrounding US President Donald Trump’s announcement of an alleged energy truce between Russia and Ukraine, along with his unexpected proposal to purchase diesel from Moscow, added to market volatility.
Asian stock markets ended mixed, while major European indices advanced. Shares in the automotive sector gained after an agreement to limit Chinese hybrid vehicle imports as part of efforts to prevent a wider trade dispute.
On Wall Street, major indices showed a mixed performance, with the technology-focused Nasdaq Composite retreating after reaching record levels last week.
The US dollar strengthened against most major currencies as investors awaited key inflation data due later this week. The figures are expected to influence expectations about whether the Federal Reserve will need to raise interest rates further to contain persistent price pressures.
“Oil remains well bid above $100 after strikes on Saudi Arabia’s Riyadh airport over the weekend, while efforts to secure a Russia-Ukraine energy truce were muddy,” said Neil Wilson, a strategist at Saxo UK.
Wilson added that a US agreement to purchase Russian diesel would have only a limited impact on the broader energy market.
Chris Beauchamp, chief market analyst at online trading platform IG, warned that further attacks on oil tankers and an escalation of the conflict involving Saudi Arabia could create significant challenges for economies and financial markets.
Russia on Monday declined to confirm whether it had reached an agreement with Ukraine to suspend attacks on energy infrastructure. The response came a day after Trump announced an “energy ceasefire”, creating uncertainty over the status of any potential agreement.
Trump also urged Ukraine to choose a new leader after President Volodymyr Zelensky criticised Washington’s decision to ease sanctions on Russian diesel. The US president is facing pressure over elevated fuel costs ahead of midterm elections in the United States.
Investors are also preparing to assess upcoming economic data for insights into household finances, particularly as inflation continues to outpace wage growth.
Meanwhile, corporate earnings from major technology companies will be closely watched for signs of whether heavy investment in artificial intelligence can be sustained.
According to Kenwell, analysts are forecasting quarterly earnings growth of 24.4% and revenue growth of 16.5%.
