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Oil holds huge gains after Saudi blasts; Fed decision in view

The Express Tribune 2019-09-17 17:42:44

Uncert­ainty and geopol­itical fears leave Asian equiti­es mixed

Oil prices dipped Tuesday but held most of the previous day’s record gains following an attack on Saudi facilities that wiped out half the country’s output, with traders nervously awaiting the US response after it said Iran was likely to blame.

The crisis revived fears of a conflict in the tinderbox Gulf region and raised questions about the security of crude fields in the world’s top exporter as well as other producers.

It has also taken attention away from the upcoming trade talks between China and the US, as well as a much-anticipated policy meeting of the Federal Reserve, which is expected to cut interest rates.

Trump said he was ready to help Riyadh following the strikes, but would await a “definitive” determination on who was responsible.

Iran-backed Huthi rebels in Yemen have claimed responsibility, but Washington and Riyadh have pointed the finger at Tehran, which denies the accusations.

Trump appeared to temper his earlier warning that the US was “locked and loaded” to respond, saying “I’m not looking to get into a new conflict, but sometimes you have to.”

Faint hopes for talks between the US and Iran to ease tensions at the UN General Assembly this month were ruled out by supreme leader Ayatollah Ali Khamenei on Tuesday.

The weekend’s attack sent both main oil prices surging almost 15% on Monday and they managed to hold most of those in early Asian trade with WTI and Brent dipping a little more than 1%.

Uncertainty and geopolitical fears left Asian equities mixed, having enjoyed an upbeat month thanks to easing trade war tensions and fresh easing measures by global central banks.

Hong Kong fell 1.2% with sometimes-violent unrest in the city adding to investor woes and dragging on the economy.

Tokyo ended up 0.1% – marking a ten-day winning run – as investors returned from a long weekend, Shanghai slipped 1.7%, Sydney added 0.3% and Singapore retreated 0.6%.

Taipei, Mumbai and Manila were also lower, though Seoul, Wellington, Bangkok and Jakarta rose slightly.

In early trade London reversed initial losses to rise 0.2%, while Paris was up 0.1% and Frankfurt was flat.