Oil prices edged higher Wednesday but the reaction in stock markets was less clear amid uncertainty surrounding the prospect of resumed Mideast peace talks following an extension of the U.S.-Iran ceasefire.
Asian equities had a mixed trading day as investors wait for clarity but broadly expect that both President Trump and authorities in Iran want to end a war that has sent oil and gas prices soaring.
“The ceasefire extension hasn’t done much to calm nerves given that worries remain about the impact of the energy squeeze on the global economy,” said Susannah Streeter, chief investment strategist at the Wealth Club.”Shipments from the Middle East are in limbo and a resolution to the conflict remains elusive, and the price of Brent crude, the benchmark, reflects this.”
International benchmark Brent Crude was again closing in on $100 a barrel, while main U.S. contract, West Texas Intermediate, traded back above $90.
Iranian gunboats attacked several commercial ships in the Strait of Hormuz Wednesday despite Mr. Trump announcing the previous evening that he was unilaterally extending a ceasefire to allow more time for peace talks.
“The US and Iran may be trying to shore up leverage and playing a game of who blinks first,” said Christopher Wong, a strategist at Oversea-Chinese Banking Corp.
“Whatever the outcome, the suspense in the interim may see risk appetite being curtailed,” he said.
European stock prices were down slightly, but Asian markets were mixed and S&P futures in the U.S. rose 0.5%, while Nasdaq futures gained 0.7% ahead of Wednesday trading.
CBS/AFP
