Oil Prices Surge amidst rising geopolitical tensions following strikes on Iran-backed rebels

Oil prices experienced a four percent surge on Friday as US and UK forces launched strikes against Iran-backed Huthi rebels in response to their attacks on ships in the Red Sea.

The strikes have ignited concerns about an escalating conflict in the oil-rich region, adding a layer of volatility to the already tumultuous global markets.

The military intervention in Yemen, aimed at curbing the Huthi rebels’ activities, has heightened fears in the oil market. Bjarne Schieldrop, Chief Commodities Analyst at SEB bank, expressed concerns about the unpredictability of the situation, suggesting that the region might be on a path that could eventually lead to a disruption in oil supply.

Despite unsettling data revealing a higher-than-expected increase in US inflation for December, Tokyo and European stock markets closed the week with robust gains. However, Wall Street saw a flat end to Thursday’s trading session, and the dollar was set to conclude the week with gains against the euro.

As the focus shifted to the luxury sector, British fashion brand Burberry issued a profit warning, causing its share price to plummet by more than nine percent in London. This downturn affected other industry players, with Gucci-owner Kering losing 1.7 percent in Paris and LVMH down 1.4 percent.

The spike in oil prices has raised concerns about a potential increase in inflation, complicating central banks’ efforts to cut interest rates.

The fear of a fresh inflationary surge comes as the US Consumer Price Index rose beyond forecasts in December, casting doubt on the Federal Reserve’s plans to initiate a rate-cutting cycle in March.

Brent North Sea Crude: UP 4.0 percent at $80.51 per barrel
West Texas Intermediate: UP 4.0 percent at $74.88 per barrel
London – FTSE 100: UP 0.8 percent at 7,635.09 points
Paris – CAC 40: UP 1.0 percent at 7,462.96
Frankfurt – DAX: UP 0.9 percent at 16,685.69
EURO STOXX 50: UP 0.9 percent at 4,481.85
Tokyo – Nikkei 225: UP 1.5 percent at 35,577.11 (close)
Hong Kong – Hang Seng Index: DOWN 0.4 percent at 16,244.58 (close)
Shanghai – Composite: DOWN 0.2 percent at 2,881.98 (close)
New York – Dow: FLAT at 37,711.02 (close)
Currency Movements

Euro/dollar: DOWN at $1.0962 from $1.0969
Dollar/yen: DOWN at 145.15 yen from 145.29 yen on Thursday
Pound/dollar: DOWN at $1.2754 from $1.2770
Euro/pound: DOWN at 85.93 pence from 85.94 pence