Business
Oil jumps 10% and could spike to $100 a barrel, analysts warn
Brent crude jumped 10% to about $80 a barrel over the counter on Sunday, oil traders said, while analysts predicted that prices could climb as high as $100 after U.S. and Israeli strikes on Iran plunged the Middle East into a new war.
The primary driver of this market volatility is the critical Strait of Hormuz. Ajay Parmar, director of energy and refining at ICIS, stated: “While the military attacks are themselves supportive for oil prices, the key factor here is the closing of the Strait of Hormuz.”
Most tanker owners, oil majors and trading houses have suspended crude oil, fuel and liquefied natural gas shipments via the Strait of Hormuz, trade sources said, after Tehran warned ships against moving through the waterway. More than 20% of global oil is moved through the Strait of Hormuz.
“We expect prices to open (after the weekend) much closer to $100 a barrel and perhaps exceed that level if we see a prolonged outage of the Strait,” Parmar said.
Middle East leaders have warned Washington that a war on Iran could lead to oil prices jumping to more than $100 a barrel, said RBC analyst Helima Croft. Barclays analysts also said prices could hit $100.
The OPEC+ group of oil producers agreed on Sunday to raise output by 206,000 barrels per day (bpd) from April, a modest increase representing less than 0.2% of global demand.
While some alternate infrastructure could be used to bypass the Strait of Hormuz, the net impact from its closure would be a loss of 8 million to 10 million bpd of crude oil supply even after diverting some flows through Saudi Arabia’s East-West pipeline and Abu Dhabi pipeline, said Rystad energy economist Jorge Leon.
Rystad expects prices to rise by $20 to about $92 a barrel when trade opens.
The Iran crisis also prompted Asian governments and refiners to assess oil stockpiles and alternative shipping routes and supplies.
There might also be a more direct impact on food. “Some elements of crude oil are used in fertiliser, and so there could be a cost implication in terms of food prices,” Benjamin Goodwin, partner at banking advisory firm PRISM Strategic Intelligence told the BBC.
Gold prices in Pakistan surged sharply on Monday, with the price of 24-karat gold rising by Rs13,300 per tola, according to the All Pakistan Sarafa Gems and Jewellers Association.
The new price of 24-karat gold per tola stands at Rs563,862, up from Rs550,562.
Updated Gold Rates
24K gold (per 10 grams):
Increased by Rs11,402 to Rs483,420
22K gold (per 10 grams):
Rose by Rs10,453 to Rs443,151
Silver Prices Also Rise
Silver (per tola):
Up Rs188 to Rs10,050
Silver (per 10 grams):
Increased by Rs161 to Rs8,616
International Market Impact
The surge in domestic prices follows gains in the international market, where gold climbed by $133 to $5,411 per ounce, while silver rose by $1.88 to $95.66 per ounce.
Analysts attribute the rally to global economic uncertainty and heightened geopolitical tensions, which typically drive investors toward safe-haven assets like gold.
One in five UK grocery trips involves at least one missing item, adding up to roughly £2.1 billion in “displaced” sales, according to a report.
As a result, 44% of consumers say they have switched to another supermarket or added in a visit to an alternative grocer in the past year to find an item they need – rising to almost two thirds of shoppers under 45, a study by DHL Supply Chain and the consultancy Retail Economics found.
Almost six in 10 shoppers (59%) said availability is a main reason they shop across multiple stores, and one in three now prioritised availability over price, a survey of 2,000 UK households suggests.
Meanwhile, convenience stores accounted for around one fifth of grocery sales but made up almost half of all displaced spending because of gaps on shelves.
Some 63% of shoppers believe availability is worse in convenience stores.
Nick Archer, managing director of convenience and consumer at DHL Supply Chain, said: “The research shows that even small stock gaps can have a significant impact on how shoppers feel about a retailer.
“Despite the pressure on shoppers’ wallets, loyalty is being driven by more than price.
“In a market where customers can switch stores with ease, availability is much more than an operational metric. Being competitive in today’s market requires precision.”
Retail Economics chief executive Richard Lim said: “In today’s environment of busy lifestyles, hybrid working and smaller, more frequent shopping trips, customers expect to find what they need quickly and easily.
“This is not only limited to grocery, but in all retail sectors, from fashion to beauty.
“Convenience comes down to having products there when the customer needs them, and availability has become the clearest sign of reliability.
“Retailers who get it right will be the ones who earn trust and lasting loyalty.”
Will petrol and diesel prices go up now?
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