Brent breaks US$100 on Mideast flare-up, fanning inflation fears
HONG KONG: Brent broke above US$100 a barrel Wednesday as oil prices surged and stocks struggled on the back of a fresh flare-up in the Middle East crisis, putting upward pressure on inflation ahead of key US data at the end of the week.
Brent crude oil surged past the US$100 mark on Wednesday amid a fresh escalation in the Middle East crisis, heightening concerns over inflation ahead of key US economic data. The prolonged US-Iran conflict has gripped investors, with no sign of resolution despite White House optimism about an imminent agreement. Iran holds control of the strategic Strait of Hormuz, while the US targets Iranian ports and economy.
Tensions escalated after Iran struck a US military base in Jordan and threatened oil tankers off Kuwait and Bahrain. Saudi Arabia and Iran-backed Houthis in Yemen also exchanged fire, targeting oil facilities. Brent crude climbed to a high of US$100.19, the highest since July, while West Texas Intermediate approached $95 for the first time since June.
Inflationary pressures are mounting globally, prompting central banks, including the European Central Bank, to consider interest rate hikes. Wall Street saw equities drop as investors weigh the potential impact on borrowing costs and consumer confidence.
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