·
Oil
prices moved higher as investors assessed the inflationary risks stemming from
the ongoing US-Iran conflict and disruptions in global energy supplies.
·
The
war in Iran overshadowed the summit between Donald Trump and Xi Jinping in
Beijing.
·
During
the summit:
o Trump praised Xi personally,
o Xi warned that mishandling Taiwan could
push US-China relations into an “extremely dangerous place.”
·
Trump
is expected to urge China to pressure Iran to:
o End the conflict,
o Reopen the Strait of Hormuz, a key global
oil shipping route disrupted by the war.
·
Brent
Crude rose about 1% on Thursday and is now roughly 45% higher than before the
conflict began.
·
West
Texas Intermediate also increased about 1%, trading above $102 per barrel.
·
Investors
remain concerned that prolonged supply disruptions could fuel global inflation
and tighten financial conditions.
·
Despite
energy concerns, global stock markets were supported by continued enthusiasm
surrounding artificial intelligence investments.
·
Futures
linked to the S&P 500 moved modestly higher, extending optimism driven by
major technology companies investing heavily in AI.
·
European
markets were slightly positive:
o Germany’s DAX rose around 1%.
o The FTSE 100 remained largely flat.
o The STOXX Europe 600 edged higher.
·
Asian
markets were mixed:
o South Korea’s KOSPI climbed nearly 2%, led
by semiconductor stocks.
o Japan’s Nikkei 225 fell about 1%.
·
According
to the AAA:
o Average US gasoline prices rose to $4.53
per gallon.
o Gasoline prices have surged roughly 52%
since the conflict started.
o Diesel prices remained at about $5.67 per
gallon, up around 51% since the war began.
·
Analysts
noted that retail fuel prices usually lag movements in crude oil markets by
several days.
·
Analysts
at BNY said AI-driven market optimism and hopes for positive US-China diplomacy
are currently supporting investor sentiment.
·
However,
they warned that mounting energy costs are increasing global inflationary
pressures and may lead to tighter monetary and financial conditions worldwide.
Oil
prices crept higher on Thursday as investors weighed fears that the energy shock
from the U.S.-Iran war will push up inflation around the world. But stocks rose
on continued optimism over artificial intelligence.
Markets
were keen for any updates from the meeting between President Trump and Xi Jinping,
China’s leader. The summit was full of pleasantries, with Mr. Trump praising Mr.
Xi, who delivered a stark warning on Taiwan, saying relations between Beijing and
Washington could enter an “extremely dangerous place” if Mr. Trump ignored China’s
demands.
The
war in Iran has cast a shadow of uncertainty on the summit. Mr. Trump is expected
to press Mr. Xi to persuade Iran to end the war and reopen the Strait of Hormuz,
the crucial waterway that has been effectively blocked since the war started.
Oil prices edge higher.
·
The
price of Brent crude, the global benchmark for oil, rose about 1 percent on Thursday,
and is about 45 percent higher than before the war started.
·
West
Texas Intermediate crude, the U.S. benchmark, inched up about 1 percent, after ending
Thursday at $102.18 per barrel.
Stocks climb on A.I. boom.
·
Futures
trading in the S&P 500 ticked higher, suggesting a modest increase when stock
markets open later in the day. The S&P 500 has hit record highs as investors
have rallied around stocks of tech companies spending more on artificial intelligence.
·
In Europe,
stocks inched higher. The Stoxx 600, a broad European index, rose slightly, and
the DAX in Germany climbed 1 percent. In Britain, where the economy grew 0.6 percent
in the first three months of the year, the FTSE 100 was flat.
·
Stocks
in Asia were mixed. In South Korea, the benchmark Kospi index, jumped nearly 2 percent
pulled up by chipmakers, but the Nikkei 225 in Japan fell 1 percent.
Gas prices rise again.
·
Gas
prices rose two cents on Thursday, to a national average of $4.53 for a gallon of
regular, according to the AAA motor club. The jump in gas prices has driven up costs
at the pump 52 percent for Americans since the conflict began.
·
Gas
prices don’t move in lock step with changes in crude oil prices, usually trailing
increases or drops by a few days.
·
The
average price of diesel fuel were flat at $5.67 a gallon
on Thursday, up 51 percent since the start of the war.
What they are saying: “Inflation
pressures are building.”
·
The
momentum in the tech rally and hope for a positive outcome from the Trump-Xi summit
are bolstering investors, Bob Savage, the head of markets macro strategy at BNY,
wrote in a research note.
·
But
price pressures are emerging as a dominant concern. “Underlying inflation pressures
are building globally, raising the risk of tighter financial conditions,” he wrote.