The Dow Jones Industrial Average sheds 86 points, or 0.3%. The S&P 500 lost 0.4% and the Nasdaq Composite dropped 0.6%.
Ten of the 11 sectors in the S&P 500 fell apart from energy shares, which climbed 2.3%.
Brent crude, the global oil level, rose 10% to $ 66.37 a barrel. It had previously jumped as much as 19.5% to $ 71.95 a barrel, but withdrew some of those gains after initial concern about how poor oil production would be affected ebbed on Saudi pledges to restart production. US oil futures rose 9.7% to $ 60.15 a barrel.
The upturn came after attacks on Saudi oil production facilities on Saturday, which knocked out 5.7 million barrels of daily production. The Kingdom is racing to restore about a third of disrupted production by the end of Monday.
On Sunday, President Trump said he authorized the release of oil, if necessary, from the Strategic Petroleum Reserve to counteract cost increases. The U.S. has about 600 million barrels of raw products, he said
senior analyst for Sanford C. Bernstein & Co.
U.S. The energy companies benefited from the disruption of supply, with Devon Energy up 8.5%, Marathon Oil rising 1
Gold added 0.7% and the Japanese yen rose 0.2% against the US dollar.
The currencies of oil producing countries strengthened against the US dollar, with the Russian ruble up 0.6%, the Norwegian krone up 0.2% and the Canadian dollar up 0.2%. Energy importer Turkey saw lira fall 0.5% against the US dollar.
The first increase in oil prices came amid uncertainty over the severity of Saudi plants. A strike against the oilfield would be the shock scenario and significantly hinder production, while damages to the processing plant would be more easily offset, said Norbert Rucker, commander of commodity research at Swiss bank Julius Baer.
"The market reaction right now is really pointing to a benign scenario," he said.
a global market strategist at J.P. Morgan Asset Management said oil producers could dip into stocks, which will help stabilize prices. "The bigger issue is what the premium markets will incorporate to reflect the risk of further attacks," he said.
The Federal Reserve is scheduled to meet this week, and markets are pricing in another quarterly rate cut.
"The central banks are likely to look through the inflationary impact of higher oil prices, but the extra geopolitical risk of an already fragile backdrop will not go without warning," Craig said.
Higher oil prices can lead to higher inflation and ask the Fed to think twice before cutting interest rates again, said Weiqi Zhu, a fund manager at Gao Zheng Asset Management in Hong Kong. However, he said that Trump's oil release authorization helped calm the markets in the near term.
A sustained increase in fuel prices may be the latest threat to a world economy already under pressure from the US and trade conflict. Consumption costs can be heavy because higher energy prices can increase gas and heating bills and reduce revenues.
a currency and emerging market analyst at Commerzbank in Singapore said increasing optimism over the US trade dispute helped offset the effects of oil market disruptions.
"In general, the hope of trade talks has helped the markets," he said. "It's very difficult to estimate the impact of oil and short-term supply shocks."
The attack also piqued the investor's concern that Saudi Arabia could be a single target for future attacks,
Head of Product Strategy at Saxo Bank.
"There's probably going to be some security provider that's going to get some decent contracts," he said.
The return on the 10-year US Treasury fell to 1,864%, down from 1,901% on Friday. Last week it rose most since June 2013. Bond yields and prices are moving in opposite directions.
Elsewhere, Stoxx Europe 600 fell 0.4%. In Hong Kong, the Hang Seng index fell 1.1% after another weekend of violent protests. South Korea's Kospi rose 0.6% and the Shanghai Composite was flat. The Japanese stock market was closed for a holiday.
—Jessica Menton and Frances Yoon contributed to this article.
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