Oil prices eased on Monday but gold rose and global stocks were mixed as rising geopolitical tensions in the Middle East spurred demand for safe haven investments after Iran launched an unprecedented attack on Israel.
The price of Brent crude dipped below $90 a barrel, while US WTI crude dropped by 1% to $84.50 by 4.46 a.m. ET. Traders are waiting to see what Israel does next.
Oil prices hit their highest levels since October on Friday in anticipation of retaliation by Tehran for a suspected Israeli strike on an Iranian diplomatic complex in Syria. US crude futures have risen 18% this year. Brent crude, the global oil benchmark, has surged more than 16%.
Europe’s benchmark Stoxx 600 index ticked up 0.3% in mid-morning trade, while Germany’s DAX and France’s CAC 40 were up 0.8% and 0.6% respectively. London’s FTSE 100 fell 0.4%. Hong Kong’s Hang Seng Index closed down 0.7%. Japan’s Nikkei 225 closed 0.7% lower, but China’s Shanghai Composite Index finished 1.3% higher.
Spot gold was up 0.3% at $2,349 per ounce on Monday. It had hit an all-time high of $2,431 per ounce on Friday because of fears of a potential attack by Iran on Israel. So far this year, bullion has surged nearly 14%.
US gold futures traded down 0.3% on Monday. They are up 14% this year.
The Paris-based International Energy Agency, which monitors oil markets on behalf of developed economies, said Monday that Iran’s weekend air attacks on Israeli military facilities had raised the risk of increased volatility in oil markets and provided a fresh reminder of the importance of oil security.
Analysts at ANZ said in a research report that the attack would raise concerns about possible disruption to global oil supply.
“The extent of that risk will likely be determined by the reaction of Israel’s government,” the analysts added. Israel’s war cabinet met for several hours Sunday to discuss its response and was due to meet again at 7 a.m. ET Monday, an Israeli official told CNN.
The Middle East was plunged into uncharted waters after Iran launched scores of missiles toward Israel late Saturday. Israel’s military said “99%” of the more than 300 projectiles were intercepted by Israel and its partners.
Before Iran’s attack, US stocks ended Friday sharply lower, as Wall Street worried about escalating tension in the Middle East.
US stock futures are cautiously higher after US President Joe Biden and his national security team, seeking to contain the risk of a wider regional war, told their counterparts the US will not participate in any counter-strike against Iran.
Dow futures rose 150 points, or 0.4%, in European hours on Monday. S&P 500 and Nasdaq futures were both up 0.6%.
