* Brent rallies on fears of global supply disruption
* Treasury yields fall as soaring oil adds to global growth
fears
* Stocks slip, safe-haven gold rallies
(Updates to U.S. afternoon; adds commentary)
By Saqib Iqbal Ahmed
NEW YORK, Sept 16 (Reuters) - Oil prices jumped on Monday
after attacks on crude facilities in Saudi Arabia sliced the
kingdom's production in half and sparked worries over the impact
of an oil shock on economic growth, halting a positive run in
world stock markets as investors reached for less-risky assets.
Increased demand for safe-haven U.S. debt pushed Treasury
yields lower and the price of gold rallied nearly 1%.
The attack on Saudi Arabia shut down 5% of global crude
output. U.S. officials blamed Iran and President Donald Trump
said Washington was "locked and loaded" to retaliate.
Oil prices surged nearly 20% at one point on Monday, with
Brent crude posting its biggest intraday gain since the
1990-1991 Gulf crisis, before paring gains.
Trump approved the use of U.S. emergency oil reserves to
ensure stable supply, helping steady prices some.
"The attack on Saudi Arabian production facilities exposed
their vulnerabilities, and as a result, the oil market is now
pricing in additional geopolitical and security risk," said Andy
Lipow, president of Lipow Oil Associates in Houston.
U.S. crude CLc1 rose 14.26% to $62.67 per barrel and Brent
LCOc1 was last at $68.71, up 14.1% on the day.
Saudi Arabia officials were discussing delaying Aramco's
initial public offering, the Wall Street Journal reported on
Monday, citing people familiar with the matter. The upheaval in the oil market, coupled with poor economic
data from China, served to sour investors' appetite for risky
assets. The MSCI world equity index .MIWD00000PUS , which tracks
shares in 47 countries, snapped a five-day winning streak to
trade down 0.41%.
Wall Street slipped as the jump in the price of oil
presented yet another headwind for a global economy that is
already buffeted by deteriorating manufacturing activity and
elevated trade tensions, analysts said.
"The oil spike - higher prices globally - could slow world
spending on items other than oil and that's the main concern,"
said Rick Meckler, partner at Cherry Lane Investments, a family
investment office in New Vernon, New Jersey.
Higher oil prices boosted beaten-down energy stocks, with
S&P 500 energy .SPNY , one of the worst performing sectors so
far this year, rising 3.47%.
Monday's rapid spike in crude prices came at a time when
central banks in the United States, Europe and Asia are easing
monetary policy to fight a slowdown in the global economy amid a
drawn-out trade war between Washington and Beijing.
The U.S. Federal Reserve is due to hold its next policy
meeting on Wednesday, at which it is widely expected to ease
interest rates and signal its future policy path. FEDWATCH
In mid-afternoon trading, the Dow Jones Industrial Average
.DJI fell 132.3 points, or 0.49%, to 27,087.22, the S&P 500
.SPX lost 10.31 points, or 0.34%, to 2,997.08 and the Nasdaq
Composite .IXIC dropped 24.54 points, or 0.3%, to 8,152.18.
The pan-European STOXX 600 index .STOXX finished down
0.58%.
U.S. Treasury yields slipped, with benchmark 10-year notes
US10YT=RR up 18/32 in price to yield 1.8432%.
In FX markets, the dollar rose against a basket of
currencies after Trump's authorization of the use of an
emergency crude stockpile helped temper the surge in oil prices.
The dollar index was up 0.39% at 98.638.
Gold rose after the attack on oil facilities in Saudi Arabia
inflamed worries over the stability of the Middle East, boosting
demand for assets seen as a haven from risk. Spot gold XAU=
was up 0.82% at $1,500.7111 per ounce.
World FX rates in 2019: http://tmsnrt.rs/2egbfVh
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