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World oil prices struck fresh 2019 highs on Tuesday after the US cracked down on Iranian oil exports while stock markets were buoyed by a raft of positive US corporate results.


Oil prices shot up on Monday after the White House announced it would end
six-month waivers that had exempted numerous countries from US sanctions for
buying Iranian oil.

They continued upwards on Tuesday, with Brent North Sea crude reaching
$74.70 per barrel, the highest point since early November, before falling
back slightly.

WTI hit a similar near six-month high at $66.45.

On the first day of trading after the Easter break, London"s benchmark
FTSE 100 rose 0.9 percent, buoyed by the oil majors.

“UK markets have returned from their long break with solid gains for the
FTSE 100, led by strength in oil stocks thanks to the surge in crude prices
over the past 24 hours,” noted Chris Beauchamp, chief market analyst at IG
trading group.

Meanwhile US giants including Twitter, Coca-Cola, United Technologies and
Verizon revealed better-than-expected first quarterly earnings, sending Wall
Street higher.

However analyst Patrick O"Hare of Briefing.com said traders could still be
holding fire ahead of more results for American behemoths this week.

“The blue chip results are nice to see, yet this market is probably
waiting on a stronger directional cue from the response to earnings reports
from Facebook and Amazon later in the week,” he said.

Other major US firms releasing earnings this week include Microsoft, Exxon
Mobil, Tesla, and Boeing — it will be the aerospace giant"s first such
report since a deadly March 10 plane crash plunged the company into crisis.

Optimism was further boosted after the US government reported new homes
sales surged by 4.5 percent in March, defying expectations.

European markets followed Wall Street"s lead, closing higher on Tuesday
after mixed trading in Asia.

Separately, Sri Lanka"s stock market slumped 3.6 percent as the Colombo
Stock Exchange reopened for trading after terror attacks on Easter Sunday
killed more than 320 people.

– $80 oil a "possibility" –

The White House"s announcement means that eight countries — China, India,
Turkey, Japan, South Korea, Taiwan, Italy and Greece — will face sanctions
starting in May if they continue to buy oil from Iran.

“This points to a big drop in the supply side, which boosts the
commodity"s price,” said Margaret Yang Yan, market analyst at CMC Markets
Singapore.

“Iran"s daily oil output amounts to 1.3 million barrels, according to
latest figures in end-March.”

Stephen Innes, head of trading and market strategy at SPI Asset
Management, said rising crude prices meant $80 per barrel was now a
“possibility”.

“Oil quickly re-priced higher on fears that markets could face an
immediate supply crunch, adding more pressure to the already tenuous global
supply squeeze,” he added.

Energy and oil-linked shares jumped on Tuesday, with Tokyo-listed crude
developer Inpex rallying 2.8 percent and oil refiner JXTG up 1.1 percent.

In London, BP shot up 2.7 percent and Shell 2.3 percent.

 

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