EconomyGlobal markets
Oil slump deepens as Brent sinks over 6% to near $105, airline shares soar
Crude extended its fall through the New York morning on signs that Washington and Tehran are looking for a diplomatic way out of the war, a welcome turn for oil-importing India.
Key points
- Brent fell more than 6% to around $105 a barrel by mid-morning in New York.
- US crude slipped below $97, down about 7% on the day.
- United, American and Delta shares jumped between 4.7% and 6.9%.
The fall in oil prices gathered pace on Monday evening, India time, as signs grew that the United States and Iran are looking for a diplomatic end to their war.
Brent crude, the global benchmark, was down more than 6% at around $105 a barrel by mid-morning in New York, about 9:10 pm IST. Earlier in the evening it had been trading near $108.6, already about 4% lower. US crude slipped below $97 a barrel, a drop of about 7% on the day.
Secretary of State Marco Rubio said President Donald Trump would like to resolve the conflict “diplomatically”. There were also reports that Iran’s supreme leader had given the government some authority to hold peace talks, which pushed prices down further.
Airlines, which have been hit hardest by the war’s fuel shock, led Wall Street’s gains. United Airlines shares rose 6.91%, American Airlines 6.07% and Delta 4.67% late in the morning, while JetBlue jumped about 11%. American’s jet fuel bill for the July to September quarter rose 67.5% to $4.63 billion. “We produced a loss in the quarter that, but for this fuel spike, would have been solidly profitable,” chief executive Robert Isom said last month.
The broader market was firm too. The S&P 500 was up about 1%, the Dow 1.1% and the Nasdaq 1.3%, also helped by a better-than-expected US factory survey, with the ISM manufacturing index rising to 55.5 in October.
For India, which buys most of its crude abroad, every dollar off the barrel eases the import bill and the pressure on the rupee and inflation. The Sensex had already jumped 1,233 points on Monday on the earlier fall in oil. Oil marketing companies and airlines will be watched closely when Dalal Street opens on Tuesday, the day Americans vote in the midterm elections.