Paris (AFP)
Oil prices jumped on Monday over escalating Middle East tensions while stock markets wavered after getting a boost last week from talk of a US interest-rate cut. The price of Brent, the global crude benchmark, rose 2.5 percent to trade at almost $81 per barrel.
Stock markets were mixed, taking a breather after rising on Friday when US Federal Reserve chief Jerome Powell signalled that a rate cut was coming.
Israel and Hezbollah traded a barrage of fire Sunday after 10 months of cross-border clashes.
Oil prices surged by more than three percent at one stage but eased slightly as both sides appeared to show restraint despite Sunday's flare-up.
The oil market was also reacting to Libya's eastern-based administration declaring that it was shutting down oil fields under its control and "suspending all production and exports until further notice".
The move by the Benghazi-based administration, which controls most of the country's oil fields, comes amid rising tensions after the UN-recognised government based in Tripoli replaced the central bank governor on Monday morning.
Equities surged on Friday after Powell declared at a summit of central bankers in Wyoming that "the time has come" for the Fed to reduce rates that were raised to a 23-year high to tame inflation.
The Fed is now expected to cut its key rate at the next policy meeting on September 17-18, and the only doubts are how big the cut will be and how many more would follow.