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United Kingdom Retail Price Index (YoY) below expectations (3.5%) in August: Actual (3.4%)
Developing
In Short: Oil prices have surged, with Brent Crude trading above $107 per barrel, as tensions in the Persian Gulf disrupt global shipments.
Oil prices have surged, with Brent Crude trading above $107 per barrel, according to reports. This rise is due to ongoing tensions in the Persian Gulf, which have disrupted oil shipments. U.S. Oil Inventories have also seen a jump, with Cushing stocks continuing to fall, as noted by Irina Slav of OilPrice.com.
Two months after the United States and Iran agreed to cease hostilities, oil prices took a dive. However, as the dangerous chokepoint of Hormuz remains closed, prices have now jumped, highlighting the resilience of crude demand even with higher prices. The medium sweet Pyrenees, for instance, is trading at $138.04 per barrel, compared to $70.59 per barrel on February 27, before the U.S. and Israel launched attacks on Iran.
Meanwhile, crude produced outside the Persian Gulf is also enjoying higher prices. Murban crude, ADNOC’s flagship blend, is trading at over $127 per barrel, illustrating the gap between the price for oil passing through Hormuz and the price for oil that does not. Saudi Arabia is trying to repair its vital East-West pipeline, while the Yemeni Houthis have struck more targets in the kingdom, further complicating the situation.
Rising oil prices have pushed the national average price of regular gasoline to nearly $4.32 per gallon, up from $4.08 a month ago and $3.18 a year ago, according to AAA. Diesel prices have also risen, averaging $6.23 a gallon on average after an average of $5.90 a gallon a week ago. Costco has raised the price of motor oil sold under its Kirkland brand and is now limiting how much customers can purchase weekly amid rising oil prices.
Grocery price inflation has also accelerated, according to the latest Worldpanel by Numerator data, which showed that grocery price inflation accelerated to 2.3% YoY in the four weeks to September 6, from 2.1% in the previous report. The conflict in the Middle East continues to disrupt global oil shipments, pushing prices higher and impacting various sectors, including retail and transportation.
What's still developing
- Two months later, Brent is trading at over $107 per barrel, and WTI is moving closer to $103, as a deep chasm opens up between the price for oil stuck in the Gulf and oil that can be moved with no threat of a drone or missile attack.
- Once the oil gets out of Hormuz, however, things change, price-wise.
- The pair, however, remains below the mid-155.00s as bulls seem hesitant ahead of the Fed decision later today and the BoJ meeting, starting on Thursday.
- Gold struggles to capitalize on its modest intraday move higher, and remains below the $4,350 level through the Asian session.
Sources
- Fxstreetlink