(Monday Market Open) Just when you thought it might be safe to forget about the Middle East for a while, it comes back to bite the market.
Summer was pretty quiet in the region after a tense spring, maybe giving people a false sense of security. Now, with half of Saudi Arabia’s crude production disabled by an attack over the weekend, the spiral in crude prices reminds everyone just how much impact this faraway place can have right here at home. The once sleepy crude market jumped almost 10% early Monday and stock futures indicated a moderately lower open.
Generally, though, things seem to be holding together relatively well so far Monday considering the crude supply shock over the weekend. Stocks overseas were lower, but not dramatically. And as U.S. markets prepared to open, stock futures were off their lows.
It helps, maybe, that crude prices were low to begin with, so even a 10% rise only takes them back to levels they were at last spring. At the recent price of $60 a barrel, U.S. crude is way below last year’s peak of $75. There also seems to be plenty of supply for the moment, especially with the U.S. ready to dip into its reserves. Gas prices remain well under $3 this morning across most of the country.
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