Wall Street sinks as skyrocketing oil prices rattle nerves

New York, United States | AFP |  US stocks sank into the red on Monday as attacks on Saudi crude production and record jumps in oil prices whipped up investor anxieties about the global economy.

Saturday’s devastating attacks on Abqaiq — the world’s largest oil processing facility — and the Khurais oil field knocked an estimated five percent of global capacity offline.

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

On Wall Street, the Dow Jones Industrial Average was off 0.5 percent at 27,076.00, snapping an eight-day winning streak.

The broader S&P 500 and Nasdaq were both down a more modest 0.3 percent at 2,997.96 and 8,153.54 respectively.

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 percent while Chevron gained 0.6 percent.

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 percent after unionized autoworkers began a nationwide strike over disagreements on wages, health care benefits and job security.