(BFM Bourse) – Black gold prices recovered significantly as Iran shot down several drones during the night from Thursday to Friday, leading the market to fear an escalation of tensions in the Middle East.
Geopolitical risk is increasing, pushing oil prices up, unlike equity markets.
During the night from Thursday to Friday, several explosions occurred in Iran and drones were shot down by the army near a military base.
However, Iranian authorities clarified that there was no missile attack. Questioned by AFP, the Israeli army did not comment. But American diplomatic officials cited by American media reported that Washington had been warned by Israel of an attack on Iran, without approving this operation.
This various information comes after the unprecedented attack last weekend on Israel by Iran, even though 99% of the missiles and drones sent by Tehran had been intercepted by the Israeli army. Since this attack, the market has feared a response from Israel which would be synonymous with conflagration in the Middle East.
“This information raises fears of a further escalation of the conflict, especially since Iran has declared that it would respond to any attack, with the Iranian foreign minister having affirmed that it would “give a decisive and appropriate response” to any new military action”, underlines Jim Reid, of Deutsche Bank.
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Oil limits its gains
With this renewed tension, oil is increasing. The June North Sea Brent contract advanced 1.3% to $88.23 per barrel.
“Depending on the nature of the attack, we are getting closer to a scenario where supply risks become a reality,” Warren Patterson, head of commodities strategy at ING Groep NV in Singapore, told Bloomberg.
However, oil erased a good part of the gains it had recorded overnight. When the first news broke, Brent had crossed the threshold of $90 per barrel. To explain this change in trend, Bloomberg mentions the fact that the Iranian media are “minimizing” the scale of this Friday’s attack.
Outside of oil, equity markets are suffering. Tokyo’s Nikkei 225 plunged 2.7% this Friday and Hong Kong’s Hang Seng lost 1.1%.
The Paris Stock Exchange should open sharply lower. The CAC 40 futures contract fell 0.6% around 8:50 a.m. according to IG Markets data. However, the contract lost more than 1% around 8:25 a.m.
This deterioration in the geopolitical context also favors assets deemed safe by investors, such as bonds. As a result, the yield, which moves in the opposite direction to the price, on the 10-year American bond fell, settling at 4.586% compared to 4.631% Thursday evening.
Julien Marion – ©2024 BFM Bourse