The JSE could struggle along with global equity markets on Monday, as investors digest a weekend attack in Saudi Arabia that has resulted in a 10% surge in oil prices.
Yemen’s Houthi rebels used drones to attack the world’s largest oil production facility in the Middle Eastern kingdom, something that has threatened to disrupt about 5% of global oil supply. The US has blamed Iran, and has said it may release oil from its strategic reserves. The attack is the sixth in about four months on a Saudi facility or tanker, said Oanda analyst Edward Moya in a note. The issue pointed to heightened tension between the US and Iran, he said, and underscored the risks posed by drones for the global oil market.Oil surged 10.06% to $66.17 a barrel. Gold was up 1.13% to $1,505.39/oz while platinum was down 0.25% to $953.39.Sentiment was also dented on Monday by yet more disappointing Chinese data. Industrial production grew only 4.
All eyes this week are on monetary policy, with the US Federal Reserve set to make its policy announcement on Wednesday, which will be followed by the Reserve Bank’s statement on Thursday. Markets are expecting a 25 basis point cut from the Fed, while the Reserve Bank is expected to keep the repo rate on hold at 6.5%.
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Saudi oil strikes: S&P Global Platts sees higher risk premium in crude marketThe drone attacks, claimed by Yemen's Houthi group but blamed on Iran by the US, has knocked out more than half of Saudi oil output, or more than 5% of global supply
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