Shares skid, oil surges again as Iran attacks Gulf shipping<\/p>\n
SYDNEY: Shares fell in Asia on Thursday (Mar 12) as oil prices jumped\non reports that more ships had been struck in the Strait of Hormuz and\nin Iraqi waters, fuelling inflation and pushing borrowing costs higher\nworldwide.<\/p>\n
US crude rose 7.5 per cent to US$93.80 a barrel, extending a rise of\nmore than 4 per cent overnight. Brent crude futures jumped 7.7 per cent\nto US$99.03 a barrel.<\/p>\n
That was despite plans from the International Energy Agency to\nrelease 400 million barrels of oil from its reserves, the largest such\nmove in its history. The US said it would release 172 million barrels of\noil from next week, as part of the IEA plan.<\/p>\n
Two fuel tankers in Iraqi waters had been struck by explosive-laden\nIranian boats, Iraqi security officials said early on Thursday, while an\nIraqi official told state media that oil ports \u201chave completely stopped\noperations.\u201d<\/p>\n
\u201cMultiple tankers loaded with Iraqi crude are now reported burning in\nthe Persian Gulf off the coast of Basra, engulfed in flames and leaking\nburning oil into the water,\u201d said Tony Sycamore, analyst at IG.<\/p>\n
\u201cThis appears to mark a direct and forceful Iranian response to the\nIEA\u2019s overnight announcement of a massive strategic reserve release\naimed at cooling runaway prices.\u201d<\/p>\n
Iran had earlier stepped up attacks on merchant ships in the Strait\nof Hormuz, telling the world to get ready for oil at US$200 a barrel. On\nWednesday, three vessels were reported to have been hit in Gulf waters\nas Iran\u2019s Revolutionary Guards said their forces had fired on ships in\nthe Gulf that had disobeyed their orders.<\/p>\n
US President Donald Trump on Wednesday declared the war on Iran has\nbeen won, but he will stay in the fight to finish the job, throwing more\nuncertainty in the mix.<\/p>\n
All of this was bad for shares. MSCI\u2019s broadest index of Asia-Pacific\nshares outside Japan fell 0.8 per cent, while the Nikkei dropped 1.6 per\ncent as Japan is a major importer of oil and gas.<\/p>\n
Both S&P 500 futures and Nasdaq futures fell 0.8 per cent. Over\nin Europe, EUROSTOXX 50 futures fell 0.6 per cent and DAX futures slid\n0.8 per cent.<\/p>\n
INFLATION RISKS<\/p>\n
US data showed the consumer price index rose 0.3 per cent in\nFebruary, in line with forecasts and above January\u2019s 0.2 per cent\nincrease, but it was rendered obsolete given the Iran war has fuelled\ninflation.<\/p>\n
In bond markets, the risk of rising inflation outweighed safe-haven\nconsiderations to shove yields higher globally. Yields on 10-year\nTreasury notes rose 4 basis points to 4.2472 per cent on Thursday,\nhaving jumped 6 bps overnight.<\/p>\n
Fed funds futures extended their slide as investors feared higher\ninflation would make it harder for the Federal Reserve to ease policy.\nMarkets are just wagering one more rate cut from the Fed this year.<\/p>\n
The danger of energy-driven inflation has led markets to wager the\nnext move in rates from the European Central Bank could be up, possibly\nas early as June.<\/p>\n
Nervous investors sought the liquidity of dollars while shunning\ncurrencies from countries that are net energy importers, including Japan\nand much of Europe.<\/p>\n
The euro slipped 0.3 per cent to US$1.1536, after closing at the\nweakest level since November last year. The dollar inched up 0.1 per\ncent to 159.12 yen, the strongest level since January when reported rate\nchecks from the US Fed spooked yen bears.<\/p>\n
The risk-sensitive Australian dollar lost 0.4 per cent to US$0.7127,\nhaving hit a more than three-year high of US$0.7188 on Wednesday as bets\nfor an imminent rate hike from its central bank grew.<\/p>", "url": "https:\/\/jawawa.id\/newsitem\/shares-skid-oil-surges-again-as-iran-attacks-gulf-shipping-1773280545", "image": "" }, "sponsor": "Okusi Associates", "sponsor_url": "https:\/\/okusiassociates.com" }