"For Europe, the decline in gas prices for the region is starting to reverse as crude turns upwards, raising inflation concerns that have helped stifle calls for easing from the Bank of England in particular. Rachel Reeves has yet to bow to pressure amid calls to scrap the 5p fuel duty rise set for September, although the Chancellor has been busy warning MPs that inflation could soon rise as a result of the war in Iran."
"Oil prices remain the main driver of market sentiment, with equities and gold moving inversely to crude prices. Today's IEA meeting could provide some respite from the upward pressure that has begun to build again, with 32 members voting on plans to tap strategic petroleum reserves to bring down oil prices. While IEA members hold 1.8 billion barrels in reserves, the speculated record release of 182 million barrels will only provide a short-term reprieve."
"With the war waging on, and Iran threatening to clog up the Straits through the use of mines, a return to normality appears to be getting more distant by the day. However, we are yet to see a pathway to a deal emerge, and markets are likely to grow increasingly fearful over the long-term implications with each day that passes."
European markets face renewed pressure as initial optimism about swift conflict resolution and controlled energy markets dissipates. Gas prices are reversing their decline as crude oil surges, intensifying inflation concerns that have deterred the Bank of England from easing monetary policy. Chancellor Rachel Reeves maintains the 5p fuel duty rise for September despite pressure to cancel it, instead appealing to fuel retailers to avoid excess profits. Crude prices have risen 33% in two weeks, ensuring pump prices will increase significantly. Oil prices remain the primary market driver, with equities and gold moving inversely to crude. An IEA meeting may provide temporary relief through strategic petroleum reserve releases, but geopolitical risks persist as Iran threatens the Strait of Hormuz.
Read at London Business News | Londonlovesbusiness.com
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