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article imageOil markets unfazed by Iranian strikes on US targets

By AFP     Jan 7, 2020 in Business

Global oil prices plunged Wednesday, totally reversing a earlier needle-thin spike that followed Iranian missile attacks on US targets in Iraq.

Comments by Iranian officials and US President Donald Trump eased tension substantially and pushed crude prices lower and lower in late European trading.

The strikes, launched in retaliation for the assassination of Iran's top general last Friday, sent Brent and WTI prices to multi-month peaks before profit-taking prevailed.

Iran said it had "concluded" its missile attacks for now, and observers remarked that they had seemed carefully calibrated to avoid US casualties.

Trump told a press conference: "Iran appears to be standing down, which is a good thing for all parties concerned and a very good thing for the world."

Iranian Foreign Minister Mohammad Javad Zarif had tweeted earlier that the country does "not seek escalation or war".

Analysts pointed out that oil traders had many sources at their disposal in any event.

"Sooner or later investors will realise that the plentiful non-OPEC supply will more than make up for any short-term disruptions in the Middle East," noted Forex.com market analyst Fawad Razaqzada.

SEB analyst Bjarne Schieldrop added that "not a single drop of oil supply has been lost due to the recent incidents and this is why the oil price has fallen back down again so quickly."

Global stock markets initially slid on investor concern of a broader conflict, but most were in positive territory as European trading wrapped up.

London stocks were the outlier, essentially unchanged on the day, while Frankfurt gained 0.7 percent and Paris was 0.3 percent higher.

Fears of escalation proved "to be short-lived as the US administration avoided an impulsive military response in the aftermath" of the Iranian strikes, noted analyst Bethel Loh at trading firm ThinkMarkets.

Safe haven assets had fared well initially, but after surging above $1,600 an ounce for the first time in six years, gold fell back to $1,557.80 which represented a loss of about 1.0 percent on the day.

- Key figures at 1700 GMT -

Brent Crude: DOWN 3.8 percent at $65.67 per barrel

West Texas Intermediate: DOWN 4.3 percent at $60.00

London - FTSE 100: FLAT at 7,574.93 points (close)

Paris - CAC 40: UP 0.3 percent at 6,031.00 (close)

Frankfurt - DAX 30: UP 0.7 percent at 13,320.18 (close)

EURO STOXX 50: UP 0.4 percent at 3,772.56

Tokyo - Nikkei 225: DOWN 1.6 percent at 23.204,76 (close)

Shanghai - Composite: DOWN 1.2 percent at 3,066.89 (close)

Hong Kong - Hang Seng: DOWN 0.8 percent at 28,087.92 (close)

New York - Dow: UP 0.7 percent at 28,771.89

Pound/dollar: DOWN at $1.3101 from $1.3126 at 2200 GMT

Euro/pound: DOWN at 84.86 pence from 84.97 pence

Euro/dollar: DOWN at $1.1118 from $1.1153

Dollar/yen: UP at 108.98 from 108.44 yen

burs-wai/jh

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