Crude oil futures jumped more than 4% Monday after Saudi Arabia shut a key pipeline that bypasses the Strait of Hormuz, citing Houthi attacks in the region. Energy stocks and oil-focused funds rallied on the news even as broader indexes slipped.
West Texas Intermediate crude futures advanced more than 4%, to about $104.15 per barrel, after Saudi Arabia closed a key pipeline that bypasses the Strait of Hormuz. The kingdom cited Houthi attacks as the reason for the shutdown.
Houthi advance threatens shipping routes
Iran-backed Houthis seized territory in Yemen around the Bab al-Mandeb Strait, further imperiling crude oil shipments.
Energy shares climb as broader market falls
Energy names caught a bid alongside crude. Chevron rallied nearly 2% in premarket action as oil prices jumped. The SPDR S&P Oil & Gas Exploration & Production ETF also strengthened, and it rose nearly 2% and is now up around 57% for the year.
Yet the wider market moved the other way. The Dow Jones Industrial Average dropped 0.4%, while the S&P 500 slipped 0.7% and the Nasdaq composite fell 1.1%. Chip stocks led the declines, pulling the major indexes lower even as energy shares advanced on the supply threat out of the Middle East.
Source: Investor's Business Daily
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