Iran Deal Saps Oil Prices, Cheers Asia Shares
TEHRAN (Tasnim) – Oil prices hit the skids on Monday after Iran and six world powers sealed a deal on Tehran's nuclear program, a fillip for global economic growth that found expression in heartier share prices from Tokyo to Seoul.
The agreement gives Iran some relief from crippling sanctions and is considered a big step toward a more lasting treaty. While Iran will not be allowed to increase its oil sales for six months, any easing of Middle East tensions tends to lead to lower crude prices.
Brent crude oil shed $2.89 to $108.16 a barrel, its biggest daily drop in a month. US oil lost $1.37 to $93.47 a barrel.
If sustained, the drop would be a net plus for spending power globally given high petrol prices essentially act like a tax on consumers.
"Positive growth signals continue to trickle out across the global economy and there is growth convergence between developed and developing economies," said Peter Dragicevich, a strategist at CBA, Reuters reported.
"Our world GDP "nowcasting" estimate points to accelerating global economic growth in the final months of 2013. This is the general trend we expect to occur in early 2014."
European shares were expected to open modestly higher, with London's FTSE 100 .FTSE, Frankfurt's DAX .GDAXI and Paris' CAC 40 .FCHI seen up as much as 0.2 to 0.4 percent, according to financial bookmakers.
Attention in Asia was again on Japanese markets as a sliding yen promises to boost exports and profits. The Nikkei .N225 sped ahead by 1.5 percent, having gained almost 11 percent in little more than two weeks.
On Wall Street, the Dow .DJI ended Friday with gains of 0.3 percent, while the S&P 500 .SPX added 0.5 percent for its first ever close above 1,800. Early Monday, S&P 500 futures had added another 0.3 percent.