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 rose 0.11% to $52.87 per barrel and Brent 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.
The Dow Jones Industrial Average rose 75.04 points, or 0.28%, to 26,648.76, the S&P 500 gained 6.54 points, or 0.22%, to 2,958.55 and the Nasdaq Composite added 25.13 points, or 0.31%, to 8,007.61.
The pan-European STOXX 600 index rose 0.71% and MSCI’s gauge of stocks across the globe gained 0.21%.
Emerging market stocks lost 0.15%.
The dollar was little changed against a basket of its peers, but Turkey’s lira slid to its lowest level against the dollar in more than a month after the White House said Ankara would soon launch unilateral military operations in northeast Syria.
The Turkish lira lost 2.39% versus the U.S. dollar at 5.84, its weakest in over a month. A move above 5.8577 would send the currency to its weakest since June.
U.S. President Donald Trump later threatened to “totally destroy and obliterate the Economy of Turkey” if Ankara does anything “off limits.”
The dollar index rose 0.15%, with the euro down 0.02% to $1.0974.
The Japanese yen weakened 0.42% versus the greenback at 107.41 per dollar, while Sterling was last trading at $1.2303, down 0.23% on the day.
U.S. Treasury yields drifted higher, with benchmark 10-year notes last down 12/32 in price to yield 1.5528%, from 1.514% late on Friday.
Spot gold dropped 0.9% to $1,491.56 an ounce. U.S. gold futures fell 1.07% to $1,490.10 an ounce.