Triple figure oil price in sight
Fears over supply disruptions following an attack by Yemen’s Houthi group in the United Arab Emirates contributed to the surge in oil prices.
Brent crude is up by 13% in 2022 at $88 a barrel, reflecting signs that the Omicron variant won’t have a long-lasting impact on fuel demand.
It means that Brent and its West Texas Intermediate equivalent are both at their highest level since October 2014.
The focus is now on whether OPEC+ can deliver the 400,000 barrels a day increase it has promised each month.
Oanda’s senior market analyst Craig Erlam said: “The evidence suggests it’s not that straightforward and the group is missing the targets by a large margin after a period of underinvestment and outages.
“That should continue to be supportive for oil and increase talk of triple-figure prices.”
Rates set to rise in February as inflation beats pay rises
Pay is falling for the first time since the summer as inflation bites, suggesting the Bank of England might have to move faster to raise interest rates.
While the jobs market remains healthy, the spectre of rising prices could lead to a cost of living squeeze even worse than experts have so far predicted.
In December last year there were 29.5 million UK people in work, up 184,000 on November.
That is up 409,000 on the pre-pandemic level of February 2020. The UK employment rates increased by 0.2 percentage points. Unemployment is down a little 4.1%.
Oil prices continue to surge
Oil prices continue to rise after Brent crude futures hit a seven-year high at almost $88 a barrel.
Supply tightness as some OPEC+ countries struggle to meet their production targets and the recovery in fuel demand has sent prices surging in 2022.
Brent rose another 1.5% or $1.22 to $87.70 a barrel overnight.
The FTSE 100 index is expected to fall back today after closing at its highest level in almost two years last night.
CMC Markets has forecast a decline of 18 points to 7593 as London follows the downward set by Asia markets overnight.
US markets were closed yesterday but futures markets are pointing to a 1% fall for the Nasdaq after the US 10-year bond yield climbed above 1.8% for the first since the pandemic on expectations for higher interest rates.
Wall Street is pricing in a March hike and up to four rises over the course of 2022.