Wall Street closes at a record for the first time since end of January
Investing.com -- Global oil and gas stocks advanced on Monday after oil prices pushed back above $100 a barrel, as the U.S. Navy moved to block maritime traffic to and from Iran through the Strait of Hormuz following the collapse of talks between Washington and Tehran to end the war.
Brent crude futures were up 7.3% at $102.16 a barrel by 08:35 GMT, while U.S. West Texas Intermediate surged around 8% to $104.24 a barrel. Both benchmarks had settled lower on Friday.
Tracking the upswing, energy-linked equities in Europe and the U.S. rose as well. ExxonMobil and Chevron each climbed more than 2% in premarket trading, while ConocoPhillips added 3.4% and Occidental Petroleum added 3.1%.
Elsewhere, BP and Shell rose around 1.4% each in London trading, TotalEnergies edged higher 1.3%, and Repsol added 2%.
President Donald Trump said on Sunday that the U.S. Navy would begin blockading the Strait of Hormuz, raising the stakes after extended negotiations with Iran failed to produce a deal and putting a fragile two-week ceasefire at risk. He also warned that fuel prices could stay elevated through November’s midterm elections
U.S. Central Command said the blockade would take effect at 10 a.m. ET on Monday, covering all maritime traffic entering or leaving Iranian ports on the Arabian Gulf and Gulf of Oman. Vessels transiting the Strait to and from non-Iranian ports would not be impeded, CENTCOM added.
The move came just days after a ceasefire agreement had appeared to stabilize the situation, temporarily allowing shipping through the Strait and sending oil prices sharply lower last week before today’s rebound.
Rabobank energy strategist Joe DeLaura had warned last week, as prices fell following the ceasefire announcement, that oil futures were "far too optimistic," adding that there was "so much risk to the upside" that was not being priced in.
"There’s permanent production loss from the shut ins in Saudi, Kuwait, UAE and Iraq. Refinery and pipeline damage plus the physical restart times, on top of the backlog of 800+ tankers trapped on the west side of the Strait," he told Investing.com.
"Brent futures seem to have a floor around $90, and I think no ceasefire (no easy opening of a mined strait of Hormuz) means that futures will eventually have to start matching physical markets around $120-130/bbl (or more!)."
