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June 19, 2019
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Khaleejtimes Business International

World stocks rise, oil surges on Gulf of Oman incident

Prices of Brent crude oil jumped 4% to over $62 a barrel on the news.

World stocks were mostly higher on Thursday and energy prices surged after two oil tankers were reportedly attacked in the Gulf of Oman, leaving one with a damaged hull and the other on fire and adrift.

Prices of Brent crude oil, the international standard, jumped 4 per cent to over $62 a barrel on the news. The gains later eased to around 3.2 per cent and the contract was trading at $61.91 per barrel.

US crude rose 2.7 per cent to $52.50 per barrel. It had closed almost 4 per cent lower at $51.14 per barrel on Wednesday, weighed by concerns over rising stockpiles and a spiraling trade dispute between the US and China.

“The knee-jerk reaction is more a response to the risks associated with higher tensions in the region and prospect of more attacks, than immediate impact on oil supplies,” Craig Erlam of OANDA said in a market commentary.

In Europe, Germany’s DAX rose 0.6 per cent to 12,193.08 in early trading and the CAC 40 in France added 0.3 per cent to 5,391.57. Britain’s FTSE 100 rose 0.3 per cent to 7,390.12. Wall Street was set to open higher as well, with the future contract for the S&P 500 index gaining 0.4 per cent to 2,891.50. The future contract for the Dow Jones Industrial Average was also up 0.4 per cent at 26,102.00.

Commander Joshua Frey, a 5th Fleet spokesman, said Thursday that the US Navy was assisting two vessels involved in a “reported attack” near the strategic Strait of Hormuz. He did not name any suspects or say how the vessels were attacked.

BSM Ship Management said one of the vessels, Kokuka Courageous, was carrying methanol and sustained “damage to the ship’s hull starboard side.” Maritime intelligence firm Dryad Global preliminarily identified the other vessel as the MT Front Altair, a Marshall Islands-flagged crude oil tanker. It said the vessel was “on fire and adrift.”

Japan’s trade ministry said the two vessels had “Japan-related cargo.” The reported attacks came as Japanese Prime Minister Shinzo Abe was wrapping up a high-stakes visit in Tehran aimed at easing tensions between Iran and the United States.

Most Asian indexes declined on Thursday as activists in Hong Kong vowed to keep protesting against an extradition bill they fear would harm the Chinese territory’s legal autonomy.

The protests threaten to shake confidence in the hub for many regional and international businesses and investors. Hong Kong’s Hang Seng gave up 0.1% to 27,294.71, extending its losses after closing down 1.7 per cent on Wednesday.

South Korea’s Kospi lost 0.3 per cent to 2,103.15 and the Nikkei 225 index in Japan lost 0.5% to 21,032.00. Australia’s S&P ASX 200 was less than 0.1% lower at 6,542.40, even after the release of better-than-expected jobs data. The Shanghai Composite index added 0.1% to 2,910.74. Shares fell in Taiwan but rose in Singapore and the Philippines.

In other trading, the dollar slipped to 108.44 Japanese yen from 108.50 yen late Wednesday. The euro rose to $1.1292 from $1.1288.

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