The FTSE 100 is poised to benefit today due to another uptick in oil prices, which are inching closer to the $100/barrel mark.
For the first time this year, US oil prices have surpassed $90, registering an increase of 0.9% to reach $90.97/barrel. Meanwhile, Brent crude has climbed to over $94/barrel, marking a 0.73% increase to settle at $94.38/barrel.
Sophie Lund-Yates, the principal equity analyst at Hargreaves Lansdown, attributes this price surge to concerns that global consumption might exceed production. The International Energy Agency anticipates a notable supply deficit in the forthcoming months.
She highlights, “OPEC+ stalwarts, Saudi Arabia and Russia, are curbing supply amidst soaring consumer demand in major markets like the US and China.”
“The ascending oil prices are lending support to the FTSE 100, given the index’s strong ties to commodities and oil,” Lund-Yates emphasized.
However, the scenario isn’t entirely rosy. The surge in fuel prices complicates the task of central banks addressing inflation, and businesses grapple with escalating expenses. Several US airlines have already emphasized the ramifications of the price hike.
