Oil hits lowest price since August as Trump plays down further Iran action
Brent crude fell and European shares advanced after Donald Trump described the Iran war as effectively over, while investors awaited US inflation figures.
By Larissa Bell ·
Oil prices extended their decline on Tuesday, November 10, while European stock markets rose after Donald Trump said the war on Iran was “effectively over”. The US president’s comments reduced concerns about further military action, adding to market optimism that the conflict could be approaching an end.
Brent crude, the international oil benchmark, dropped almost 3% to $89.66 on Tuesday morning, its lowest price since August 31. That followed a fall of nearly 6% on Monday, when indications that the conflict might be nearing a conclusion had already pushed prices sharply lower.
Speaking at a White House press conference, Trump said Israel and Gulf allies were well protected against Iran and that escalation was unnecessary. He played down the need for military action at this stage, while saying the US remained ready to act if required.
European equities gained ground, with the benchmark Stoxx 600 rising 0.9% to 662.54. The index was close to the record level it reached in early August, when hopes of a Middle East peace agreement had supported shares. Airlines benefited from expectations that reduced tensions could bring fuel costs down: Lufthansa gained 1.8%, while Air France-KLM rose 1.2%.
London’s FTSE 100 added 45 points, or 0.4%, to reach 10,828. Energy companies moved in the opposite direction as crude prices weakened. BP and Shell were the index’s biggest fallers, losing 1.7% and 1.5% respectively.
Daniela Hathorn, a senior market analyst at Capital.com, said the global recovery followed a strong Wall Street session, with gains spread relatively widely across the market. Falling oil prices and renewed interest in technology stocks had helped support that performance. She cautioned, however, that an improved geopolitical outlook had not resolved the underlying economic and corporate risks.
Investors were also awaiting October’s US inflation figures, scheduled for release at 1.30pm GMT. Hathorn said cheaper energy could reduce inflation expectations, but the Federal Reserve would need evidence of broader easing in price pressures before reconsidering policy. Persistent inflation and resilient growth could keep borrowing costs high for longer, while a surprise in the data could renew volatility in technology shares sensitive to yields.
The decline in wholesale oil prices also raised hopes of further savings for motorists. The AA said on Monday that average UK petrol prices had fallen by 5p a litre since early October to 169.7p. It said wholesale market prices pointed to a further reduction of 10p a litre.
