San Francisco Frontiers - Crude prices rise above $90 per barrel on US-Iran strikes

Meanwhile, stocks on Wall Street dipped and were mixed elsewhere as investors continued to react to hawkish comments from Federal Reserve chief Kevin Warsh.

After a run lower for most of last week, oil price spiked again Monday, a day after the United States said it had attacked Iranian rocket launchers on a small island in the Strait of Hormuz, its first strikes on the country in a month.

The attack prompted Tehran to retaliate by hitting US military targets in Jordan.

President Donald Trump said Monday that the United States would hit back against Iranian attacks on US targets in the Middle East, according to Fox News.

The exchange came shortly after the US-Iran war hit the six-month mark, and at a time when hostilities had been subsiding.

The news revived concerns about the conflict in the Gulf, with attempts at peace talks appearing to be going nowhere and the Hormuz strait -- through which a fifth of global crude and gas normally passes -- largely closed.

"For oil traders, (the) move is another reminder of how quickly the geopolitical premium can return," said Quintex Intel's Stephen Innes.

"Physical flows through Hormuz have improved materially from their worst levels, which is precisely why crude had started giving back some of the fear premium, but the latest exchange shows how fragile that progress remains and how quickly the shipping story can be pushed back onto the trading desk," he added.

With inflation remaining stubbornly high -- largely on the back of elevated energy costs -- the US Federal Reserve has come under pressure to act, with Warsh's refusal to provide guidance stoking uncertainty in recent weeks.

But in a highly anticipated speech at the Jackson Hole symposium of central bankers and economists in Wyoming on Friday, Warsh left traders with few doubts that he was ready to increase borrowing costs.

He called the spike in inflation -- currently at 3.7 percent and nearly double the Fed's two-percent target -- "concerning" and said he would be "hard-pressed" to describe current financial conditions as "restrictive", largely taken as a hint that rate hikes were on the horizon.

However he stopped short of saying he would support a hike, adding: "I stand here today committed to a discipline, not to a decision."

All three main indexes on Wall Street fell Friday as investor expectations for an interest rate increase in September surged.

They fell further on Monday, with the Dow shedding 0.5 percent as trading got underway in New York.

"There is a negative bias this morning in the equity futures market that is oriented around a negative news catalyst," said Briefing.com analyst Patrick O'Hare.

"Specifically, the US and Iran traded military strikes over the weekend," he added, also pointing to higher yields on US government debt as weighing on equities.

Asian stock markets struggled in the morning but some markets rallied as the day progressed, leaving some in positive territory and others just below Friday's close.

In Europe, Paris rose but Frankfurt dipped, while London was closed for a holiday.

Focus will now turn to a string of crucial data releases over the next two weeks before the Fed makes its decision, with jobs figures this week and the consumer price index next week.

- Key figures at around 1330 GMT -

Brent North Sea Crude: UP 2.5 percent at $90.26 per barrel

West Texas Intermediate: UP 2.5 percent at $85.51 per barrel

New York - Dow: DOWN 0.5 percent at 53,293.52 points

New York - S&P 500: DOWN 0.3 percent at 7,691.49

New York - Nasdaq Composite: DOWN 0.2 percent at 26,357.81

London - FTSE 100: Closed for a holiday

Paris - CAC 40: UP less than 0.1 percent at 8,407.64

Frankfurt: DAX 40: DOWN 0.7 percent at 26,387.02

Tokyo - Nikkei 225: DOWN 0.1 percent at 66,311.93 (close)

Hong Kong - Hang Seng Index: DOWN 0.1 percent at 25,566.99 (close)

Shanghai - Composite: UP 0.9 percent at 3,986.30 (close)

Euro/dollar: UP at $1.1600 from $1.1586

Pound/dollar: UP at $1.3545 from $1.3538

Euro/pound: UP at 85.65 pence from 85.58 pence

Dollar/yen: DOWN at 159.81 yen from 160.07 yen on Friday

O.Anderson--SFF