Oil rises with eyes on Iraq; stocks, dollar drift higher
NEW YORK: Oil prices jumped on Monday as supply issues took center stage following a week of sharp losses, while stocks and the dollar drifted higher with eyes on the upcoming Sino-U.S. trade talks.
Oil was bid higher as deadly anti-government unrest gripped Iraq, the second-largest producer among the Organization of the Petroleum Exporting Countries.
The unrest in Iraq has begun to bring the so-called risk premium that supports prices back into focus, after supply concerns had eased in the wake of Saudi Arabia’s faster-than-expected recovery from attacks key oil facilities last month, said John Kilduff, a partner at Again Capital LLC in New York.
“There’s a lot of nervousness about the situation in the Middle East, particularly in Iraq, right now,” Kilduff said. “Oil prices have no choice but to go up.”
U.S. crude CLc1 rose 0.11% to $52.87 per barrel and Brent LCOc1 was last at $58.51, up 0.24% on the day.
Remarks by Federal Reserve Chairman Jerome Powell and minutes from the most recent Fed meeting will later this week keep traders searching for signs on what the central bank is considering in its upcoming meeting.
On Wall Street, major stock indexes edged higher clinging to comments from White House economic adviser Larry Kudlow regarding the state of the trade war with China.
Stocks were hit last week on concerns that softening U.S. manufacturing and services sector data were a harbinger for a slide to recession in the world’s largest economy. Strong jobs data on Friday softened the blow.
“Investors are somewhat tired of the same song and dance from the administration. They are not going to fully buy in until something materializes from the meeting,” said Matt Ruffalo, senior strategist at Clarfeld Financial Advisors in New Jersey.