Oil Rallies After Trump’s ‘Unimpressive’ SpeechMarkets Wanted Peace, Got More War

Oil prices spiked and stocks sank on Thursday after Donald Trump reiterated that US forces would hammer Iran for another two to three weeks but offered no solution to the closure of the Strait of Hormuz that has crippled global markets.

Investors appeared to be unimpressed with the US president’s much-anticipated address to the nation.

The Speech

In a speech lasting less than 20 minutes, Trump added little to what he has said in the past, warning that “over the next two to three weeks, we are going to bring them back to the Stone Ages, where they belong.”

He also told the nation that US forces would meet all their battlefield goals “very, very shortly.”

The Market Reaction

Brent crude surged as much as 5% to $106.29 a barrel. West Texas Intermediate jumped more than 4% to as high as $104.29.

Trump “spoke of objectives met, but not of resolution. Of continued strikes, not withdrawal. Of optional escalation, not closure,” wrote Stephen Innes at SPI Asset Management.

“The message was not one of panic, but it was unmistakably one of unfinished business. And in markets, unfinished business is oxygen for volatility.”

Stocks Tumble

The reaction among equity traders was negative:

• Seoul: Down 3% (after soaring 8% on Wednesday)

• Tokyo, Hong Kong, Shanghai, Singapore, Taipei, Sydney: All well down

The speech “did not contain what the market had hoped fornamely, indications of an end to the fighting,” said Jumpei Tanaka of Pictet Asset Management. “Instead, he suggested a potential escalation of the situation, which is a clear negative for stocks.”

Iran Responds

Israel said it came under Iranian missile fire on Thursday, part of four barrages detected within six hours.

Iranian foreign ministry spokesman Esmaeil Baqaei said: “Messages have been received through intermediaries, including Pakistan, but there is no direct negotiation with the US.”

Gulf Under Fire

The United Arab Emirates said its air defences were again responding to missile and drone “threats.”

The Revolutionary Guards confirmed hitting an oil tanker in the Gulf, which they said belonged to Israel.

In Lebanon, Hezbollah said its fighters launched drones and rockets at northern Israel. Authorities in Lebanon say Israeli attacks have killed more than 1,300 people since war erupted on March 2.

The UK Meeting

Trump’s repeated demand that countries that rely on energy through the Strait of Hormuz “get your own oil” comes as Britain prepares to host a meeting of about 35 nations to discuss how to reopen the waterway.

The Bottom Line

Markets wanted peace. They got more war.

Oil spiked. Stocks sank. The Strait of Hormuz remains closed. And Trump’s speech offered no exit.

“Unfinished business” is oxygen for volatilityand the markets are breathing deep.

{Source: IOL}

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