Stocks drop, oil jumps as Mideast war persists

NEW YORK: Stocks tumbled while oil prices pushed higher Friday (Mar 20) at the end of a turbulent week in which attacks on Gulf energy infrastructure rattled global markets and sparked fears of a global economic slowdown.

Crude prices jumped further on Friday, with the international benchmark, Brent crude, rising 3.3 per cent on Friday to nearly US$112.19 per barrel. The main US contract, West Texas Intermediate, rose 2.3 per cent to over US$98 per barrel.

Angelo Kourkafas of Edward Jones, said this week’s assaults on energy infrastructure deepened the market’s concerns.

“What really matters more is not how high prices are now, but how long prices may stay high, and I think it’s that uncertainty that is triggering the volatility,” he said.

Coming into this week, investors were anxious over the near-closure of the Strait of Hormuz, through which about 20 per cent of the world’s crude oil and liquefied natural gas flow.

Early Friday, drone attacks caused fire at Kuwait’s Mina Al-Ahmadi oil refinery.

Energy analysts and consumers are also scrambling to count the cost of Iranian missiles hitting Qatar’s huge Ras Laffan natural gas complex on Thursday. 

The attack caused “extensive damage” that Qatar’s state energy company said could cost US$20 billion a year in lost revenue and take five years to repair.

“Heading into a weekend, investors are unsurprisingly a bit nervous about what may happen, of course nobody knows how it’s going to play out,” said Kourkafas, who pointed to the rise in government bond yields as a sign markets are more worried about inflation.