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Oil prices slide after Syria air strikes

Oil prices slide after Syria air strikesLONDON: Oil prices slid on Monday after US-led strikes on Syria did not provoke an escalation in the conflict, while equities were mixed.

The United States, Britain and France carried out attacks at the weekend on alleged chemical weapons facilities, in response to what they say was a toxic gas attack by the Russia-backed Assad regime a week before.

“Even though investors have moved past the Syria missile strikes and are working on the basis that there will be no extended conflict or market-adverse retaliation, equity markets are struggling for direction,” noted Interactive Investor analyst Rebecca O’Keeffe.

Crude prices, however, fell back after having run up to highs not seen since the end of 2014 last week as tensions rose ahead of the attack in the tinderbox oil-rich Middle East region.

“The strike on Syrian chemical locations over the weekend marks the end of the recent standoff,” noted IG analyst Joshua Mahony.

“Market realisation that this attack largely draws the line under the issue has brought about a sharp decline in oil prices in early trade…”

The commodities-heavy FTSE-100 in London was weighed down as oil prices slid, falling 0.5 percent in afternoon trading.

Shares in BP were down 1.3 percent, which Shell shares gave up 0.6 percent.

The FTSE 100 index also lost ground as the strong pound weighed on the share prices of multinationals earning large amounts in other currencies.

In the eurozone, shares in Frankfurt and Paris were both down around 0.1 percent.

Wall Street opened higher, buoyed by data showing US retail sales rose for the first time in four months. The Dow climbed by 0.7 percent in the first minute of trading.

Sentiment was also boosted by Bank of America beating earnings estimates with first quarter profits rising by a third to $6.5 billion.

“US stocks are adding to last week’s advance in early action, with late-Friday’s US-led targeted missile strikes in Syria appearing to not exacerbate concerns that they will escalate tensions with Russia and Iran,” said analysts at Charles Schwab brokerage.

While there was broad support for the Syria mission, Moscow condemned it as illegal and warned it would provoke “chaos” in international relations.

The Syria crisis, which has seen the West’s relationship with Russia grow increasingly frosty, has encompassed other regional players including Iran, Saudi Arabia and Israel, and led to talk of a military standoff.

It also comes against the backdrop of a trade dispute between the United States and China. Many fear this could hammer the global economy if the two sides push through tit-for-tat tariffs on billions of dollars’ worth of goods.

Most Asian markets dipped Monday but Tokyo eked out gains.

– WPP tumbles –

British advertising and marketing group WPP topped the FTSE fallers after chief executive Martin Sorrell resigned over the weekend.

Sorrell’s departure came 10 days after WPP launched an independent probe into allegations of his personal misconduct through the misuse of company assets.

The company, widely regarded as a bellwether for the global advertising industry, saw its stock dive 5.1 percent.

“Sir Martin was an integral part of WPP, and some market confidence has been lost now that he is no longer at the helm.”

Copyright AFP (Agence France-Press), 2018

Source: Brecorder

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