Oil climbs on cyber attack; metals shine on demand hopes

by Roland JACKSON / AFP

LONDON – Oil prices climbed Monday after a vital US pipeline was put out of action by a cyber attack, while iron ore and copper hit historic peaks on demand optimism as economies reopen.

Oil rose after the weekend attack hit the Colonial Pipeline Company, the largest in the United States and which ships gasoline and jet fuel from Texas to the East Coast, serving 50 million consumers.

The US government declared a regional emergency Sunday, while the company was unable to say when operations would return to normal.

In reaction, New York’s WTI crude and London Brent oil both gained about 0.4 percent in value on Monday.

‘Unnerved by cyber attack’

“Energy markets were unnerved by a cyber attack on a major US pipeline operator,” said Interactive Investor analyst Richard Hunter.

“As a result, the oil price added to the gains which were already being seen on higher anticipated demand.”

The attack comes as prices were pushing higher in response to an expected jump in demand as the world economy gets back on track as a result of the easing Covid health crisis.

Both Brent and WTI crude have gained more than 30 percent in value since the start of the year on burgeoning optimism over a post-Covid demand recovery.

Commodities also charged higher Monday in part owing to dollar weakness, which makes raw materials priced in the currency cheaper for buyers using rival units.

“Commodities are powering higher on Monday, supported not only by the weaker US dollar but also by reopening optimism and hope of large-scale infrastructure spending in both US and China,” said OANDA analyst Sophie Griffiths.

“China’s benchmark iron ore rallied … to a record high, and copper also reached a fresh record high.”

Iron ore forged new highs above $220 a tonne, while copper struck an all-time peak at $10,747.50 per tonne — having already hit records last week.

Elsewhere, Europe’s main stock markets wavered as investors mulled a mixed Asian session, despite another record-breaking New York performance.

Frankfurt and Paris stocks each declined 0.2 percent in early afternoon deals, while London advanced 0.2 percent heading towards midday.

Before the weekend, New York stocks jumped as a well-below-forecast US jobs report eased inflation concerns.

The Dow and S&P 500 finished at all-time highs, and the Nasdaq gained nearly one percent, while the dollar was under pressure.

The British pound climbed on Monday to $1.4089, the highest since February 25, on dollar weakness and relief over last week’s UK elections.

Key figures around 1050 GMT

Brent North Sea crude: UP 0.4 percent at $68.55 per barrel

West Texas Intermediate: UP 0.4 percent at $65.13 per barrel

London – FTSE 100: UP 0.2 percent at 7,140.74 points

Frankfurt – DAX 30: DOWN 0.2 percent at 15,372.17

Paris – CAC 40: DOWN 0.2 percent at 6,374.31

EURO STOXX 50: DOWN 0.4 percent at 4,019.99

Tokyo – Nikkei 225: UP 0.6 percent at 29,518.34 (close)

Hong Kong – Hang Seng Index: DOWN 0.1 percent at 28,595.66 (close)

Shanghai – Composite: UP 0.3 percent at 3,427.99 (close)

New York – Dow: UP 0.7 percent at 34,777.76 (close)

Euro/dollar: UP at $1.2167 from $1.2166 at 2100 GMT

Pound/dollar: UP at $1.4095 from $1.3984

Euro/pound: DOWN at 86.29 pence from 86.99 pence

Dollar/yen: UP at 108.77 yen from 108.60 yen