An easing of tensions between the U.S. and Iran looks set to weigh on Australian energy shares on Thursday.
This could mean the likes of Beach Energy Ltd (ASX: BPT), Oil Search Limited (ASX: OSH), Santos Ltd (ASX: STO) and Woodside Petroleum Limited (ASX: WPL) give back the gains they made on Wednesday and more.
On Wednesday oil prices zoomed higher after Iran retaliated to the U.S. killing of Gen. Qasem Soleimani by firing a barrage of missiles at American targets in Iraq.
This sparked fears of a widening conflict in the Middle East, with the potential to disrupt regional crude supplies. However, comments by President Trump overnight have eased concerns and put pressure on oil prices.
According to CNBC, President Trump said that Iran “appears to be standing down” following its attack. And while Trump will “immediately impose additional punishing economic sanctions on the Iranian regime,” this is far more lenient than traders were expecting.
The U.S. President also suggested that the White House is open to negotiations with Iran.
“We must all work together toward making a deal with Iran that makes the world a safer and more peaceful place,” Trump added.
The share market reacted by rotating back into risk assets, sending the S&P 500 index up to a record high.
This came at the expense of the gold price and miners of the precious metal. Which could be bad news for the likes of Resolute Mining Limited (ASX: RSG) and St Barbara Ltd (ASX: SBM) today.
But the worst impacted shares are likely to be Oil Search and the rest of the energy producers after oil prices fell heavily.
According to Bloomberg, overnight the WTI crude oil price fell 5.1% to US$59.53 a barrel and the Brent crude oil price dropped 4.4% to US$65.30 a barrel.
Conversely, this news will no doubt come as a relief to shareholders of Qantas Airways Limited (ASX: QAN). Its shares have come under pressure this week amid concerns that rising oil prices could lead to higher fuel costs in the future.
The post Oil prices crash lower after Middle East tensions ease appeared first on Motley Fool Australia.
Our Motley Fool experts have just released a fantastic report, detailing 5 dirt cheap shares that you can buy in 2020.
One stock is an Australian internet darling with a rock solid reputation and an exciting new business line that promises years (or even decades) of growth… while trading at an ultra-low price…
Another is a diversified conglomerate trading near a 52-week low all while offering a 2.7% fully franked yield...
Plus 3 more cheap bets that could position you to profit over the next 12 months!
See for yourself now. Simply click the link below to scoop up your FREE copy and discover all 5 shares. But you will want to hurry – this free report is available for a brief time only.
- Man bets $221,666 on one ASX stock
- Top analysts name their top 3 ASX blue chip shares for 2019
- 3 quality dividend shares to boost your income
- NEW: Free report names top 3 ASX dividend shares to buy for 2019
- 5 Stocks for Potentially Building Wealth After 50
Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.
The Motley Fool's purpose is to help the world invest, better. Click here now for your free subscription to Take Stock, The Motley Fool's free investing newsletter. Packed with stock ideas and investing advice, it is essential reading for anyone looking to build and grow their wealth in the years ahead. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson. 2020