Oil Jumps Following Air Strikes on Houthi Rebels in Yemen; Equities Higher

By Adrian Kerr

Crude-oil prices jumped after a U.S.-led coalition launched air strikes against rebel Houthi targets in Yemen, raising concerns of a further escalation of conflict in the Middle East that could disrupt oil and gas supply.

Front-month Brent crude oil futures rose nearly 2% immediately after the U.S. and U.K. launched the strikes, and were up 2.6% to $79.40 a barrel early in Europe. U.S. benchmark WTI futures rose 2.7% to $73.98 a barrel.

European natural gas prices also rose, with benchmark Dutch TTF up 2.1% to EUR31.43 a megawatt hour.

Still, equities continued to climb, with gains across all major European bourses. The FTSE 100 was recently up 0.9%, with France's CAC 40 up 0.8% and Germany's DAX up 1.0%.

Shares in Danish shipping giant A.P. Moller-Maersk were up 0.2%, having earlier risen as much as 3.9%, while Germany's Hapag-Lloyd was up 1.3%, having climbed more than 4% earlier in the session. In Asia, Hong Kong-listed shares in Cosco Shipping Holdings closed 3.15% higher, while Taiwanese peers Evergreen Marine and Yang Ming Marine Transport gained 5% and 5.1%, respectively.

Iran-backed Houthi rebels from Yemen have repeatedly targeted commercial ships transiting through the Red Sea, in retaliation for Israeli actions in Gaza. As a result, shipping traffic has fallen significantly, hurting trade and crimping supply chains.

The U.S.-led coalition launched more than a dozen strikes late Thursday, officials said, two days after the Yemeni rebel force defied an ultimatum to halt its attacks on Red Sea shipping.

Higher energy costs add to higher-than-expected U.S. inflation data, which points to a bumpy last leg of disinflation, Saxo Markets analysts said. That in turn could see central banks acting more slowly to cut interest rates.

Write to Adrian Kerr at [e-mail]

(END) Dow Jones Newswires

January 12, 2024 04:53 ET (09:53 GMT)

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