Oil prices were swinging between gains and losses early Monday after surging over the weekend amid an attack on a base in Jordan that killed three U.S. servicemen.
It’s the first time U.S. troops have been killed in this latest Middle East conflict. The U.S. said the drone strike came from an Iran-backed militia and that it would retaliate.
Since the start of the present hostilities on Oct. 7 when Hamas attacked Israel, the concern from an investment perspective is that the war could widen and jeopardize oil supplies in the region, home to some of the world’s largest producers.
Iran denied any involvement in the strike in Jordan.
Separately, Houthi rebels based in Yemen continue to attack shipping vessels in the Red Sea. The U.S. and its allies have attacked targets of those militants to try to secure global trade.
Strategists at Goldman Sachs estimate that oil flows through the Bab El Mandeb Strait at the southern end of the Red Sea have seen a drop of some 1.2 million barrels a day since the shipping attacks started in December.
The route is important for other goods as well. Roughly 20% of the clothes and shoes imported into the U.S. use the Suez Canal, according to Steve Lamar, CEO of the American Apparel & Footwear Association, cited by MarketWatch. In Europe: 40% of clothes and 50% of shoes come through the Red Sea route.
West Texas Intermediate,
the U.S. benchmark, rose 0.1% to $78.06 a barrel.
Brent crude,
the international standard, added 0.1%, to $83.60. Both contracts gained about 6% last week.
Oil stocks were mixed in premarket trading.
Exxon Mobil
was unchanged.
Chevron
fell 0.3%. American depositary receipts of
Shell
and
BP
rose 0.3% and 0.6%, respectively.
Write to Brian Swint at [email protected]
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