NEW YORK (AP) — Brent crude oil briefly topped $100 per barrel for the first time since May as increased fighting in the Middle East threatens to slow the global flow of crude. The price for a barrel climbed 6.2% to $99.94 and briefly topped the century mark, the first time the most actively traded contract has done so in two months. The latest increase came after attacks on two Saudi oil tankers in the Red Sea. It was just a few weeks ago that the price for a barrel of Brent had
dropped below $72, roughly back to where it was before the Iran war.
THIS IS A BREAKING NEWS UPDATE. AP’s earlier story follows below.
Wall Street was poised to open with minor losses on Thursday as earnings season ramps up and the intensifying conflict with Iran pushed Brent crude above $98 a barrel.
Futures for the S&P 500 and the Dow Jones Industrial Average slipped 0.6%. Nasdaq futures slid 0.8%.
Alphabet Inc., the parent company of Google, sank 4% after the European Union hit the company with a fine of 890 million euros ($1 billion). EU regulators said the technology behemoth broke digital antitrust regulations by setting up Google Play and its ubiquitous search engine to corral consumers toward its own services and apps to the detriment of competitors.
News of the fine came a day after Alphabet posted stronger-than-expected results for its second quarter, a sign that its massive artificial intelligence spending spree may be paying off.
Tesla shares slid 5.6% in off-hours trading after the car company run by Elon Musk said it shoveled more money into research and development, cutting into profits that were lifted by a sharp increase in vehicle sales.
Investors are looking for signs that the deluge of dollars going into processors, computer memory and other building blocks of the AI boom will yield enough profits to make the investments worthwhile. Such worries have kept AI stocks at the center of Wall Street’s swings for weeks, though trading in that sector was muted early Thursday with most companies hovering near Wednesday's closing prices.
Companies in the defense sector got a boost after aerospace giant Lockheed Martin beat sales and profit forecasts, propelling its shares 5.5% in the premarket. RTX, which makes Patriot and Tomahawk cruise missiles, jumped 5.2% after it breezed past Wall Street targets and raised its guidance.
Rising oil prices are weighing on stocks because they make consumers more cautious about spending while raising costs for most businesses and erode their profits.
Airlines and other fuel-dependent companies usually get hit the hardest when energy prices are elevated. American Airlines fell 3.7% in premarket trading, even after beating profit forecasts on record revenue. The company said it expects third-quarter fuel expense to be up $1.7 billion year over year. That helped drag shares of other airlines lower, including Delta and United.
Southwest also posted strong quarterly results on Thursday, but its shares sank more than 4% after it trimmed expectations for the current quarter, also blaming higher fuel expenses.
Early Thursday, the price of a barrel of Brent crude oil, the international standard, was up 4.9% to $98.64, its highest level since early June.
It had fallen to less than $72 earlier this month, roughly where it was before the war with Iran. But continued fighting is preventing oil tankers from using the Strait of Hormuz to exit the Persian Gulf. Normally, a fifth of all oil and natural gas traded passes through the narrow strait.
U.S. benchmark crude gained $3.83 to $90.66 a barrel, also its highest level in six weeks.
Higher oil prices are threatening a reacceleration of inflation, which could push the Federal Reserve and other central banks to raise interest rates, slowing economies and undercutting prices for stocks and other investments.
Elsewhere, in Europe at midday Germany's DAX lost 0.9%, the CAC 40 in Paris shed 1.3% and Britain's FTSE 100 was 0.3% lower.
Asian shares mostly rose, led by South Korea’s Kospi, which gained 4.4% to 7,096.89.
In Tokyo, the Nikkei 225 picked up 0.5% to 66,422.60. Technology companies led gains, with stocks in SoftBank Group climbing 3.8%.
The U.S. dollar was trading at 163.36 yen as the Japanese currency wavered near its lowest level in 40 years. Expectations that the gap between U.S. interest rates and Japanese interest rates will widen due to higher inflation in the U.S. have helped to drive the dollar higher against the yen.
Hong Kong's Hang Seng rose 1.3% to 25,210.81. The Shanghai Composite index bounced back from earlier losses to gain 0.3%, closing at 3,876.78.
In Australia, the S&P/ASX 200 gained 0.2% to 8,839.00.
Taiwan's Taiex edged 0.1% higher and the Sensex in India fell 0.6%.
