Oil jumps on US plans to tighten sanctions against Iran

Crude oil jumped almost 3 per cent on Monday after the United States said it would tighten a clamp-down on Iranian oil exports in May, while US equities were little changed as Wall Street braced for corporate results in a busy earnings week.

The dollar was little changed against a basket of currencies in thin holiday-affected trading as gold held above a near four-month low on support from a weaker greenback.

The United States said it would eliminate in May all waivers that allowed eight countries to buy Iranian oil without facing US sanctions, a move that sent oil prices to 2019 highs.

Brent crude, the global benchmark, rose as much as 3.3 per cent a barrel and was last up $1.98 to $73.95 (€65.66).

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US West Texas Intermediate crude climbed as much as 2.9 per cent to $65.87, the highest since October 31st. WTI was up $1.48 to $65.48 a barrel.

Another drop in Iranian exports would further squeeze supply in a market already tightened through the US sanctions against Iran and fellow Opec member Venezuela.

"This does bring a lot more uncertainty in terms of global supplies," said Olivier Jakob, analyst at Petromatrix. "It is a bullish surprise for the market."

Major financial markets in Europe were closed for Easter Monday, as were markets in Australia and Hong Kong.

Near record high

Stocks on Wall Street hovered near break-even as the benchmark S&P 500 index was about 1 per cent away from a record high hit in September, boosted in part by largely positive earnings in a market that had sharply lowered its expectations.

About one-third of the S&P 500 companies, including Boeing, Amazon and Facebook, will report this week.

The results will determine whether investors should be concerned about the start of an earnings recession or whether back-to-back quarters of negative growth can be avoided.

S&P 500 profits are expected to drop 1.7 per cent year-over-year, according to Refinitiv data, in what could be the first earnings contraction since 2016.

"The market knows and understands earnings are going to be markedly lower this quarter," said Robert Almeida, global investment strategist at MFS Investment Management in Boston.

“It’s the beginning of the next turn in the cycle, which is softer earnings,” Almeida said.

The Dow Jones Industrial Average fell 45.99 points, or 0.17 per cent, to 26,513.55. The S&P 500 lost 1.32 points, or 0.05 per cent, to 2,903.71, and the Nasdaq Composite dropped 2.85 points, or 0.04 per cent, to 7,995.21.

Asian slip

Overnight in Asia shares slipped, pulled lower by underperforming Chinese stocks that retreated from a 13-month high. Comments from top policy-making bodies raised investor fears that Beijing would slow the pace of policy easing after some signs of stabilisation in China.

MSCI's broadest index of Asia-Pacific shares outside Japan lost 0.3 per cent, edging away from a nine-month peak last week after Chinese economic data beat expectations and eased concerns about the health of the world economy.

The Shanghai Composite Index closed down 1.7 per cent and Japan's Nikkei edged up 0.08 per cent.

The dollar has found support in recent weeks on the back of a gradual rise in US 10-year Treasury yields and signs of strength in the world’s top economy, including better-than-expected retail sales in March.

The dollar index fell 0.16 per cent, with the euro up 0.05 per cent to $1.1252. The Japanese yen was flat versus the greenback at 111.94 per dollar.

The Treasury yield curve steepened at the start of a busy week in which $237 billion of new US government debt will be auctioned off.

The spread between the two- and 10-year note yields , the most common measure of the yield curve, steepens when longer-dated yields rise faster than shorter-dated yields, suggesting bullish investor sentiment. – Reuters