Oil prices ease after Syria air strikes

NEW YORK: Oil prices slid on Monday amid relief that US-led strikes on Syria did not provoke an escalation in the conflict, easing investor fears about the security of crude oil supply.

Russia holding back on any military riposte helped lift Wall Street, as did strong retail sales and optimism over earnings, but European equities were under pressure as the region’s key currencies strengthened against the dollar.

“The limited and targeted strikes in Syria that provoked no serious response from Russia were a relief to markets that were pricing in escalation,” said Jasper Lawler, head of research at LCG.

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 Syrian regime a week before.

“We can understand why the oil price has tended to fall rather than gain today in response to the West’s military strike against Syria,” Commerzbank commodities analysts said in a note.

“After all, the tough response announced by Russia has failed to materialize,” they said.

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

– Drawing the line –

“The strike on Syrian chemical locations over the weekend marks the end of the recent standoff,” noted IG analyst Joshua Mahony. “Market realization that this attack largely draws the line under the issue has brought about a sharp decline in oil prices,” he said.

The commodities-heavy FTSE-100 in London slipped as oil prices slid, and shares in BP and Shell fell.

Also weighing on the FTSE 100 index was a strong pound which hit the share prices of multinationals earning large amounts in other currencies.

London and Frankfurt fell, while Paris eked out a modest gain.

BK Asset Management’s Kathy Lien attributed the weakness in the dollar to statements from President Donald Trump, who on Twitter accused Russia and China of “playing the Currency Devaluation game.”

US stocks finished solidly higher, boosted by optimism over the upcoming earnings period, as well relief over Syria and a better-than-expected retail sales report.

– WPP tumbles –

British advertising and marketing group WPP topped the FTSE losers 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.

Shares of WPP fell 4.7 percent in New York after falling sharply in London earlier.

Among US stocks, Bank of America climbed 0.4 percent after reporting a 34.2 percent jump in first-quarter profits to $6.5 billion on a strong performance in key businesses thanks in part to a lift from higher interest rates.

Pharmacy stocks Walgreens Boots Alliance and CVS Health won 3.8 percent and 4.2 percent respectively following a report on CNBC that Amazon was abandoning a plan to sell drugs to hospital.

– Key figures around 2100 GMT –

Oil – Brent North Sea: DOWN $1.16 at $71.42 per barrel

Oil – West Texas Intermediate: DOWN $1.17 at $66.22 per barrel

New York – Dow: UP 0.9 percent at 24,573.04 (close)

New York – S&P 500: UP 0.8 percent at 2,677.84 (close)

New York – Nasdaq: UP 0.7 percent at 7,156.28 (close)

London – FTSE 100: DOWN 0.9 percent at 7,198.20 (close)

Frankfurt – DAX 30: DOWN 0.4 percent at 12,391.41 (close)

Paris – CAC 40: UP 0.1 percent at 5,312.96 (close)

EURO STOXX 50: DOWN 0.2 percent at 3,441.27 (close)

Tokyo – Nikkei 225: UP 0.3 percent at 21,835.53 (close)

Hong Kong – Hang Seng: DOWN 1.6 percent at 30,315.59 (close)