Oil prices tumble, global stocks rise as Iran eases fears

Oil prices fell and global stocks eased on Monday after Israel’s strike on Iran spared the country’s energy infrastructure.

Israel on Saturday spared oil and nuclear facilities in its airstrikes on Iranian military targets, easing investor concerns about the extent of Israeli retaliation for Tehran’s October 1 missile barrage.

“Investors breathed a sigh of relief as the attack was more subdued than expected,” said Ipek Ozkardeskaya, a senior analyst at Swissquote Bank.

Oil prices have risen sharply in recent weeks, with investors worried that an attack on Iran’s oil facilities would not only drive Iranian crude off the market but fuel a wider conflict involving other regional oil producers.

Brent North Sea crude, the international benchmark oil contract, fell as much as six percent on Monday to above $71 a barrel.

“Israel’s strikes, carefully avoiding energy sites, have eased fears of a full-scale conflict with Iran,” said Stephen Innes, analyst at SPI Asset Management.

“Even more telling is Iran’s response, downplaying the impact of the attack and indicating that its warnings could deter any further aggressive action from Israel,” he added.

Oil market concerns have now returned to focus on a potential oversupply in 2025 and a slowdown in demand from China, the world’s biggest oil importer, according to analysts.

U.S. stocks were higher at midday, boosted by cheap oil, and investors were looking ahead to a busy week of economic indicators that could set direction for a market that is already near record highs.

On Wednesday comes the first estimate of third-quarter US GDP and on Thursday the Federal Reserve’s preferred inflation gauge will be reported. Finally, Friday sees the release of key US monthly jobs figures.

Together, the reports should provide clues on the Fed’s interest rate policy for the rest of the year.

“The market has gotten used to a strong US economy, and better-than-expected economic data, so we could see a volatile reaction to the US payrolls data later this week” if it is less rosy than in previous months, said Kathleen Brooks, director of research. . on XTB.

It’s also a big week for US company earnings as five of the “Magnificent Seven” tech stocks will report third-quarter results, including Alphabet (Google), Amazon, Apple, Meta (Facebook) and Microsoft.

“The market expects US tech giants to continue to report double-digit earnings growth for the next five quarters, so there are some big expectations for these companies,” Brooks said.

London, Paris and Frankfurt all closed higher. London was hit at both ends by falling crude prices. Oil and gas giants BP and Shell fell the most.

But airlines easyJet and British Airways-owner IAG benefited from the prospect of lower fuel prices.

Dutch medical device maker Philips cut its full-year sales target on Monday, blaming deterioration in Chinese demand, sending its share price down nearly 17 percent in Amsterdam, leaving the stock exchange’s AEX index one of several losers on Monday.

The yen hit a three-month low on currency markets, falling more than one percent against the dollar as Sunday’s general election resulted in a hung parliament.

But it helped the Tokyo stock market close up 1.8 percent as a weaker yen boosted exporters’ shares.