The price of oil hit a four-year high on Monday, as Brent Crude climbed above the $81 mark for the first time since November 2014. The rise followed a decision by the world’s largest oil producers, led by Saudi Arabia and Russia, not to increase production.
US sanctions on Iran’s energy industry, which are due to come into effect in November, are beginning to restrict supplies. US President Donald Trump has urged oil cartel OPEC to increase production to offset exports from Tehran.
The increase in oil prices helped to propel US energy stocks, while the US equity market receded from Friday’s record high due to growing investor concern over the trade tensions between Washington and Beijing.
Meanwhile Germany's equities were lower on Monday as losses in the construction, food and beverages and chemicals sectors saw shares slide. The DAX volatility index closed on a bearish note.
Sterling began to make up some of the losses suffered on Friday, steadying at around $1.3120 against the dollar. The dollar index was flat in the afternoon. GBP/USD could well be volatile ahead of the US Federal Open Market Committee announcement on interest rates on Wednesday.
The S&P 500 closed 10 points down at 2,919.37 in New York, while the Dow Jones Industrial Average lost 181 points to finish the day at 26,562.05. In London, the FTSE 100 lost 31 points to close at 7,458. In Frankfurt, the exporter-heavy DAX lost 80 points to finish at 12,350 on the day.