#BrentReturnsTo100

Brent Crude soars past $100 as geopolitical tensions buffet global markets.

Oil prices spiked significantly on 07 May, as Brent futures closed above $100 for the first time in 2 months, at $100.69, while WTI also rose 6.2%, to close at $92.19. The rise shows growing uncertainty over supply issues in what is one of the most critical energy-producing regions.

The sudden rally came following reports of attacks on Saudi oil tankers in the Red Sea where Saudi Arabia confirms that one ship was on fire and also growing concerns over the shipping routes through the two chokepoints, the Strait of Hormuz and Bab el-Mandeb. It is through both of these chokepoints that some percentage of the world's oil gets shipped.

Amidst increasing geopolitical fears, actual physical Brent prices reportedly topped $105 per barrel, with fears about supply shortages looming ever higher; Some in the markets suggest oil could remain elevated for quite some time if supply disruptions continue long-term.

It isn't just the energy market itself feeling the strain though, higher oil prices are now reigniting inflationary concerns, raising the 10-year U.S Treasury yield to 4.7%+, while tech stocks are coming under selling pressure as inflation makes money tighter and central banks have that little bit further to hike to bring it down. Markets are now looking for further central bank rate hikes on the back of renewed inflation worries.

The market may have some telling weeks ahead as it tries to digest the various Middle Eastern developments, energy supply chain issues,inflationary figures and Federal Reserve policy.

Do you believe rising oil prices will spur on another phase of inflation, or is the market set to correct itself before energy prices begin to move sharply upward again?

‍#Oil #GlobalMarkets #GateSquare