European stocks retreat as oil soars on Middle East conflict
Investing.com — European stock markets traded lower Monday, as investors assessed the implications of the military conflict in the Middle East and the associated surge in oil prices.
At 03:25 ET (07:25 GMT), the DAX index in Germany traded 1% lower, the CAC 40 in France dropped 1.1% and the FTSE 100 in the U.K. fell 0.3%, supported to a degree by its heavily-weighted oil majors.
The Israeli-Palestinian conflict escalated to full-blown war over the weekend, as members of the Islamist group Hamas attacked several Israeli towns, killing hundreds of Israelis and abducted dozens more. In response, Israeli air strikes pounded numerous targets in Gaza, resulting in numerous casualties.
This new source of conflict, with the Ukrainian war still ongoing, has seen oil prices surge, to the detriment of most European stock markets. The higher oil prices could add to inflationary pressures, prompting more central bank tightening, and also acts as a tax on consumers.
The benchmark Brent and Nymex contracts gained as much as 5%, before slipping slightly back, just when prices had been on the retreat.
Last week saw oil prices post their steepest weekly losses since March, as Brent posted a decline of about 11% and WTI recorded an over 8% drop, on worries that persistently high interest rates will slow global growth and hammer fuel demand.
At 03:25 ET, the U.S. crude futures traded 3.3% higher at $85.51 a barrel, while the Brent contract climbed 2.9% to $87.00 a barrel.
Data released earlier Monday showed that German industrial production fell 0.2% on the month in August.
Although this represents an improvement from the revised 0.6% drop the previous month, Germany, the eurozone’s dominant economy, has a high exposure to energy costs,
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