Rally in oil prices loses steam on mixed day for global stocks

A rally in oil prices faded Wednesday as worries over Middle Eastern tensions appeared to recede somewhat while US stock indices eked out gains following solid US jobs data.

Brent crude, the international benchmark, briefly topped $75 per barrel while West Texas Intermediate was above $72, with both more than three percent higher.

The surge extended Tuesday's upward move after Iran launched its second ever direct attack on Israel on Tuesday, firing what it said were 200 missiles in retaliation for the killings of Tehran-backed militants.

But the surge in crude prices ran out of steam, with Brent finishing 0.5 percent higher.

"Israel said it would retaliate against Iran, but the market wasn't bothered by this today," Briefing.com said.

Oil prices faltered after US oil stockpile data pointed to a surprisingly large crude inventory build. The data also showed a drop in refined product deliveries, indicating tepid demand.

Crude prices were also buffeted by a Wall Street Journal report that Saudi oil minister Prince Abdulaziz bin Salman has warned oil prices could fall as low as $50 a barrel if other OPEC+ members continue to over-produce.

OPEC denied the report, which implied a Saudi-initiated price war, posting on X (formerly Twitter) that the claims are "utterly unfounded."

Back in New York, both the Dow and Nasdaq finished with modest gains following a choppy session.

US private sector hiring picked up in September, with employers adding more jobs than anticipated, according to data released by payroll firm ADP.

Markets also kept an eye on the Middle East a day after Iran launched its missile attack on Israel. UN chief Antonio Guterres called for an end to the "sickening cycle of escalation."

Despite headwinds that also include a US dockworkers strike, "it is reassuring that the global equity markets did not experience a panic attack," said CFRA Research's Sam Stovall.

Elsewhere, Hong Kong's stock market surged more than six percent by the close, continuing a sharp rally after China last week unveiled a raft of measures to boost its economy, particularly the troubled property sector.

Markets were closed in Shanghai and Shenzhen for a week-long holiday, having also zoomed higher before the break. Tokyo fell more than two percent.

Among individual companies, Nike slid 6.8 percent after the sports giant reported lower profits and revenues, signaling it would take time to engineer a company turnaround.

Tesla dropped 3.5 percent after reporting third-quarter auto deliveries that were roughly in line. A Wedbush note pointed to disappointment that the figures were not more impressive after a rough first half of 2024.

- Key figures around 2030 GMT -

New York - Dow: UP 0.1 percent at 42,196.52 (close)

New York - S&P 500: FLAT at 5,709.54 (close)

New York - Nasdaq: UP 0.1 percent at 17,925.12 (close)

London - FTSE 100: UP 0.2 percent at 8,290.86 (close)

Paris - CAC 40: UP 0.1 percent at 7,577.59 (close)

Frankfurt - DAX:  DOWN 0.3 percent at 19,164.75 (close)

Hong Kong - Hang Seng Index: UP 6.2 percent at 22,443.73 (close)

Tokyo - Nikkei 225: DOWN 2.2 percent at 37,808.76 (close)

Shanghai - Composite: Closed for a holiday

Euro/dollar: DOWN at $1.1048 from $1.1068 on Tuesday

Pound/dollar: DOWN at $1.3266 from $1.3286

Dollar/yen: UP at 146.38 yen from 143.57 yen

Euro/pound: DOWN at 83.26 pence from 83.31 pence

Brent North Sea Crude: UP 0.5 percent at $73.90 per barrel

West Texas Intermediate: UP 0.4 percent at $70.10 per barrel