* Brent rallies on fears of global supply disruption
* Treasury yields fall as soaring oil adds to global growth
fears
* Stocks slip, safe-haven gold and Japanese yen rise
(Updates prices with U.S. markets, changes comment, dateline;
previous MILAN)
By Saqib Iqbal Ahmed
NEW YORK, Sept 16 (Reuters) - Oil prices soared on Monday
after attacks on crude facilities in Saudi Arabia sparked
worries over the impact of an oil shock on economic growth,
halting a positive run in world stocks as investors reached for
less risky assets.
Increased demand for safe-haven U.S. debt pushed Treasury
yields lower, while gold and the safe-haven currencies,
including the Japanese yen and Swiss franc, strengthened.
The attack on Saudi Arabia shut 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 to trade up about 10
percent on the day.
Trump approved the use of U.S. emergency oil reserves to
ensure stable supply, helping steady oil prices some.
"This justifies a risk premium on the oil price, so prices
are initially unlikely to return to the levels at which they
were trading before the attacks," said Carsten Fritsch, oil
analyst at Commerzbank in Frankfurt, Germany.
U.S. crude CLc1 rose 11.43% to $61.12 per barrel and Brent
LCOc1 was last at $67.26, up 11.69% on the day.
Saudi Arabia officials are 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 and 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 0.29%.
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.
"There are enough global growth worries without it, but I
think the oil spike, higher prices globally could slow world
spending on items other than oil, and I think that's the main
concern," said Rick Meckler, partner at Cherry Lane Investments,
a family investment office in New Vernon, New Jersey.
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
The Dow Jones Industrial Average .DJI fell 108.16 points,
or 0.4%, to 27,111.36, the S&P 500 .SPX lost 6.99 points, or
0.23%, to 3,000.4 and the Nasdaq Composite .IXIC dropped 15.73
points, or 0.19%, to 8,160.99.
The pan-European STOXX 600 index .STOXX lost 0.37%.
U.S. Treasury yields slipped with benchmark 10-year notes
US10YT=RR up 11/32 in price to yield 1.8607%.
In FX markets, currencies linked to the price of oil rose,
while the Japanese yen and Swiss franc strengthened as nervous
investors sought safety. JPY= CHF= 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 1.02% at $1,503.69 per ounce.
World FX rates in 2019: http://tmsnrt.rs/2egbfVh
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