Stock Futures Fall as Oil Surges After U.S. and Israeli Strikes on Iran
Stock futures slipped as global markets reacted to a sharp jump in oil prices following U. S. and Israeli strikes on Iran that killed Iran's supreme leader. The moves have pushed crude higher and raised the prospect of near-term gas price increases and broader market volatility.
Crude benchmarks spike after strikes and a near $5 move in U. S. oil
The price of oil surged after U. S. and Israeli strikes on Iran that killed Iran's supreme leader. U. S. crude oil soared more than 6. 5%, while Brent, the international oil benchmark, surged 8% on Monday morning. For U. S. crude oil, that move pushed prices higher by nearly $5 per barrel. Even before the weekend's escalation, oil prices had risen 17% this year amid President Donald Trump’s ramped-up rhetoric against the Iranian regime and recent ratcheted-up sanctions on Iran.
GasBuddy analyst warns of pump pain as retail prices track crude
Retail gas prices typically move about 2. 5 cents for every $1 change in the price of crude oil, so the recent crude move implies a nearly 13 cent-per-gallon increase could be on the horizon for consumers. GasBuddy analyst Patrick De Haan said price hikes at the gas pump could start as soon as Monday. "I fully expect that by Monday night, you could credibly say that gas prices are being impacted by oil prices having gone up, " he said. He added, "It won't be a spike, " while warning that gas stations will likely start passing along price hikes this week.
Strait of Hormuz risk and halted shipping raise supply concerns
Iran's oil production is estimated to be less than 5% of global output, with most of that oil going to China because of U. S. sanctions. Still, Iran exerts major influence over the Strait of Hormuz, a critical passageway that handles more than 20% of the world's daily oil demand. A closure or restriction of that waterway could quickly rock the global oil market and would rank among the worst-case scenarios for the industry, longtime industry analyst Andy Lipow said Sunday. On Saturday and Sunday, at least six of the leading cargo shipping companies said they were halting or diverting ships that were originally set to sail through the key waterway.
