Oil prices rose on Monday after the United States and Iran exchanged attacks for the first time in a month, pushing the global benchmark for crude back above $90 a barrel, after a sharp fall last week.
The U.S. military said its forces attacked two Iranian rocket launchers attempting to disperse sea mines in the Strait of Hormuz. In response, Iran said it fired missiles at American air bases in Jordan, which the Jordanian military said it had intercepted.
Oil prices jump.
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The price of Brent crude, the global benchmark for oil, was up over 3 percent to about $91 a barrel.
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West Texas Intermediate crude, the U.S. benchmark, was also higher to around $86 a barrel. On Sunday, President Trump said he would use the oil from an unusual deal in Venezuela to refill the U.S. national stockpile of oil, but it could take years to produce meaningful amounts of oil under the agreement. The U.S. Strategic Petroleum Reserve now sits at its lowest level since 1982.
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Investors and analysts are mostly focused on the continued disruption to shipping in the Strait of Hormuz, the narrow waterway between Iran and Oman that is a vital trading route for oil and natural gas that normally carries as much as one-fifth of the world’s supply. The Iranian-backed Houthi militia in Yemen have also restricted tanker traffic in the Bab al-Mandab Strait at the southern end of the Red Sea, which Saudi Arabia has used as an alternative to the Strait of Hormuz.
Stocks are flat and bond yields slip slightly.
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Futures on the S&P 500 pointed to little change when stocks resume trading in the United States on Monday. The index has risen four of the past five weeks.
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Stocks in Asia were mixed. Benchmark indexes in Japan and Hong Kong fell slightly, while stocks in South Korea posted a small gain. In Europe, the Stoxx 600, a broad index that tracks the region’s largest companies, traded flat.
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U.S. government bond yields eased in early trading, although borrowing costs remain near multi-decade highs. The move on Monday reversed only part of the jump at the end of last week, when Kevin Warsh, the Federal Reserve chairman, signaled a readiness to raise interest rates if inflation did not moderate. The 10-year Treasury yield, an influential benchmark for mortgages and business loans, fell to 4.71 percent.
Gasoline prices are steady.
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The national average for gas prices was flat on Monday at $4.08 a gallon, according to the AAA motor club. The price has risen 37 percent since the war began.
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Gas prices don’t move in lock step with crude, usually trailing increases or drops by a few days.
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The average price of diesel was unchanged on Monday at $5.60. It is up 49 percent since the start of the war.
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