Capitals, Aug. 31 (SANA) Oil prices rose more than 3.5% on Monday after renewed military exchanges between the United States and Iran heightened concerns over supplies through the Strait of Hormuz, while global shares traded mixed amid expectations of higher U.S. interest rates.
Brent crude futures rose $3.15, or 3.58%, to $91.25 a barrel by 0903 GMT, while U.S. West Texas Intermediate crude gained $2.96, or 3.55%, to $86.36, Reuters reported.
The gains followed U.S. strikes on two Iranian launchers on Larak Island in the Strait of Hormuz on Sunday, the first known U.S. strikes on Iran since late July.
Iran subsequently attacked two U.S. air bases in Jordan, Iranian media reported Monday, citing Iran’s Revolutionary Guards.
The renewed hostilities revived concerns over energy supplies through the Strait of Hormuz, one of the world’s most important oil shipping routes. Crude prices had fallen during much of the previous week as tensions eased and physical flows through the waterway improved.
Warsh remarks lift rate-hike expectations
Financial markets were also digesting comments from Federal Reserve Chair Kevin Warsh that strengthened expectations the U.S. central bank could raise interest rates to bring inflation back toward its 2% target.
Speaking at the Jackson Hole economic symposium Friday, Warsh said policymakers must be confident underlying inflation is moving toward the Fed’s objective at a sufficient pace, adding that otherwise the central bank would have “work to do.”
He stopped short of explicitly backing a rate increase, but his remarks pushed expectations for higher borrowing costs upward.
The yield on the two-year U.S. Treasury, which is particularly sensitive to expectations for Fed policy, rose to 4.35% from 4.22% shortly before Warsh’s speech.
Investors are now awaiting U.S. employment data this week and inflation figures next week for further clues on the Fed’s policy path.
Global shares mixed
European and Asian shares were mixed Monday, while U.S. stock futures edged lower.
Germany’s DAX fell, while France’s CAC 40 was slightly lower in early trading. London markets were closed for a bank holiday.
In Asia, Japan and Hong Kong declined, while South Korea and mainland China advanced.
Futures for the S&P 500 and Dow Jones Industrial Average were down about 0.2% after Wall Street’s main indexes ended lower Friday.
Gold also came under pressure as expectations of higher U.S. interest rates increased.
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