Tensions in the Middle East crude oil and gold prices rose to new highs in months aviation stocks fell sharply
Baghdad (Jan 4) Iraq is the second largest oil producer in OPEC. If there is a conflict in Iraq, it will directly affect the supply of crude oil.
After US airstrikes killed a senior Iranian military general in Iraq, international oil prices hit a new high in months, and gold prices jumped at the same time.
On January 3, WTI and Brent crude oil prices rose more than $2 a barrel, or more than 4 per cent, on fears that the intensification of the US-Iraq conflict would affect the stability of international crude oil supplies.
Of these, WTI crude oil futures once stood at a high of $63.78 per barrel, the highest level since May 2019, up 4.25%, while Brent crude oil futures once reached $69.17 / barrel, the highest level since the attack on Saudi Aramco oil facilities in September last year, an increase of 4.41%.
As of January 4, Beijing time, WTI crude for February delivery rose 3.06 percent to close at $63.05 a barrel, while Brent crude for March delivery rose 3.55 percent to close at $68.60 a barrel.
As a safe haven for investors in times of political and economic turmoil, gold prices have also reached recent highs. Spot gold rose 1.66 per cent to $1553.45 an ounce on the afternoon of January 3.
As of January 4, Beijing time, gold futures for February delivery on the New York Mercantile Exchange rose 1.6 per cent to $1552.4 an ounce, the highest level since September 4 last year.
Affected by this, the A-share market and Hong Kong stock market-related sectors quickly pulled up. On January 3, the A-share oil and petrochemical plate rose as much as 1.53%. Among them, Zhongman oil rose by the limit, and the stock price hit a new high in more than two months.
As of January 3, Hong Kong stocks PetroChina, Sinopec and CNOOC were up 2.8 per cent, 1.49 per cent and 2 per cent, respectively.
In Europe and the United States, Shell, BP, Total, Chevron, ExxonMobil and other international oil companies have also risen.
But geopolitical tensions in the Middle East are dispelling optimism in investment markets for the new year. The Nasdaq and Dow Jones index fell sharply; the German DAX index, the Paris CAC40 index, the FTSE 100 index and the Stoxx 50 index also fell across Europe.
American airlines, which are sensitive to market volatility, have seen stocks fall more than the broader market as a result of the rise in oil prices caused by the conflict between the United States and Iraq.
In addition to labour costs, fuel is generally the second largest expense for airlines. Shares in American Airlines fell 4.8% at the start of morning trading, United and Delta fell more than 3%, and Southwest Airlines fell 2.4%, according to CNBC.
Shares of domestic airlines have also fallen sharply. As of January 3, shares of Eastern Airlines, Air China, China Southern Airlines, Spring and Autumn Airlines and auspicious Airlines were down 3.07%, 3.16%, 1.37%, 1.81% and 2.5%, respectively.
The killing of senior Iranian generals by the US military has brought relations between the United States and Iran to a lower ebb. According to Agence France-Presse and other foreign media news, Iran's supreme leader Ayatollah Ali Khamenei vowed to carry out "severe retaliation."
The Wall Street Journal quoted analysts as saying that Iraq is currently the second largest oil producer in OPEC and that a conflict in Iraq will directly affect the supply of crude oil to the market.
It has also raised concerns among investors about Iran's retaliatory attacks on regional energy infrastructure.
Last September, two Saudi Aramco oil facilities were hit by unmanned ji attacks, causing Saudi crude oil production to halve. Both the United States and Saudi Arabia accused Iran of orchestrating the attack, but Iran denied the charge.
If tensions in the Middle East increase further, it may directly affect several major local oil-producing countries and the Strait of Hormuz, a major offshore oil producer. At present, about 30% of the world's seaborne oil passes through the region.
Charles Hollis, a former British diplomat in Saudi Arabia and Iran, was quoted by the Wall Street Journal as saying that it was an easy option for Iran to attack a "proxy" directly after a US attack, but that the US military would certainly strengthen its defences on the ground.
Charles Hollis says Saudi Arabia wants to fight Iran, but they don't want to be at the forefront.
The Financial Times quoted the head of RBC's commodities strategy as saying that if Iran chose fu feud, regional risks would increase sharply for US companies active in Iraq, such as ExxonMobil and Chevron.
SMMnews
