Middle East conflict up, oil up, gold up, defense stocks up
WTI and Brent crude futures both jumped more than 4% to above $86 and $88 per barrel, respectively, on Monday, after a surprise attack by Hamas on Israel over the weekend.
More than 900 Israelis have lost their lives, with 130 more held hostage, and nearly 700 Palestinians have been killed in Israel’s retaliation. A truce is unlikely in the short term.
Investors are wary of a wider conflict too. Gold jumped 1.45% to around $1,850 an ounce on Monday, adding to the 0.7% gain the metal made on Friday (as the Non-Farm Payrolls jobs report came in ridiculously stronger than expected).
In some cases, investors are not wary, but welcome a wider conflict, with defense stocks in the US being some of the better performing on Monday. Raytheon (+4.5%), Lockheed Martin (+8.5%), and Northrop Grumman (+11.2%) all recording some of their best daily gains in some time.
A question that arises, and which could affect oil markets is; what was Iran’s contribution to the situation, if any? Tehran has denied involvement but did commend the attack. Investors will be looking for any events that could affect supply from Iran (they currently send 1.5 million barrels per day to China) or through Iran (via the Strait of Hormuz which is vital for about 30% of oil supply).
In any case, the world might be facing higher-for-longer oil prices.
More than 900 Israelis have lost their lives, with 130 more held hostage, and nearly 700 Palestinians have been killed in Israel’s retaliation. A truce is unlikely in the short term.
Investors are wary of a wider conflict too. Gold jumped 1.45% to around $1,850 an ounce on Monday, adding to the 0.7% gain the metal made on Friday (as the Non-Farm Payrolls jobs report came in ridiculously stronger than expected).
In some cases, investors are not wary, but welcome a wider conflict, with defense stocks in the US being some of the better performing on Monday. Raytheon (+4.5%), Lockheed Martin (+8.5%), and Northrop Grumman (+11.2%) all recording some of their best daily gains in some time.
A question that arises, and which could affect oil markets is; what was Iran’s contribution to the situation, if any? Tehran has denied involvement but did commend the attack. Investors will be looking for any events that could affect supply from Iran (they currently send 1.5 million barrels per day to China) or through Iran (via the Strait of Hormuz which is vital for about 30% of oil supply).
In any case, the world might be facing higher-for-longer oil prices.
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