Wall Street tumbles as skyrocketing oil prices rattle nerves

September 17, 2019 | 09:24

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US stocks tumbled into the red on Monday (Sep 16) as attacks on Saudi crude production and record jumps in oil prices whipped up investor anxieties about the global economy.

Wall Street tumbles as skyrocketing oil prices rattle nerves (AFP Photo / Stan Honda)

Saturday's devastating attacks on Abqaiq - the world's largest oil processing facility - and the Khurais oil field knocked an estimated five per cent of global capacity offline.

Benchmark crude prices in London and New York both jumped more than 14 per cent, historic one-day increases.

On Wall Street, the Dow Jones Industrial Average was off 142.70 points (0.52 per cent) at 27,076.82, snapping an eight-day winning streak.

The broader S&P 500 lost 9.43 points (0.31 per cent) at 2,997.96 and the Nasdaq were down 23.17 points (0.28 per cent) at 8,153.54.

Nate Thooft of Manulife Asset Management told AFP that, while the price increases were large, they still left prices themselves below highs reached earlier in the year.

Stock markets' reaction was also comparatively muted, said Thooft.

"The pullback is pretty minor in the grand scheme of things," he said.

"Historically, when we had such a significant event in the Middle East, you'd see a much larger reaction."

The higher prices rewarded shares in oil stocks. Supermajors Exxon Mobil rose 1.5 per cent while Chevron gained 0.6 per cent.

Fresh economic data on Monday showed activity in China slowed last month across the board, with the pace of industrial production, retail sales and investment in fixed assets all lower.

In the United States, automaker General Motors dove 4.3 per cent after unionised autoworkers began a nationwide strike over disagreements on wages, healthcare benefits and job security.

AFP

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