Oil prices surged almost a fifth this morning, the biggest intraday jump on record, after drone strikes on a Saudi Arabian processing facility wiped out 5 per cent of the global supply of oil products.
Brent crude jumped 19 per cent to $71 a barrel within seconds after trading opened in Asian markets. Another closely watched benchmark, West Texas Intermediate, jumped as much as 15.5 per cent in New York to $63.34.
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It is hard to think through the global ramifications of an event such as this, because we know so little about the attack, about the likely political and military response to it, and about the practical implications for both Saudi Arabia, and more important, the world economy. But some points are already clear and it is worth setting them out.
The Middle East moved closer towards a broad armed conflict on Monday following US accusations that Iran was behind a sophisticated multi-faceted attack on major Saudi oil facilities at the weekend.
President Donald Trump warned in a tweet late on Sunday that the US was “locked and loaded” in response to the Saturday morning attack, which took up to a half of Saudi oil production off line and caused world petroleum prices to jump 20 per cent.But he also said that the US would wait for intelligence that confirmed the “culprit” behind the attack and until Saudi Arabia, whose leadership is closely allied with the Trump administration, provided guidance.
"The weekend’s attacks in Saudi Arabia will have two consequences for financial markets and the global economy: the immediate oil price shock, which has already hit, and the longer-term costs of increased tensions or even a possible outbreak of conflict in the Persian Gulf."The size of the initial shock to oil prices was immense. Spot prices have surged by amounts unprecedented since the 1990 Iraq invasion of Kuwait, while Brent crude oil futures recorded their largest intraday surge since trading began in 1988, although since then the initial knee jerk surge has been pared back.
Tensions in the Gulf have the potential to cause oil to trade with a premium - as the sharp drop in crude oil prices after the sacking of Iran hawk John Bolton proves.The weekend’s attacks are likely to once again raise US-Iran tensions and therefore could keep oil trading at a premium well beyond the actual supply disruption.
Average UK property asking prices have dipped by 0.2 per cent over the past month in a downward trend that began in June.
The average asking price dropped by £730 to £304,770, the first fall at this time of year since 2010, according to Rightmove which looked at data covering 95 per cent of all UK listings.
The property website said the housing market remains “fundamentally sound” but is being hurt by uncertainty surrounding the outcome of Brexit.
The full story:
While the attacks present yet another headwind for a global economy that is already buffeted by deteriorating manufacturing activity and elevated trade tensions, we don’t believe that this short-term disruption to oil production will trigger a global recession.
The European Union plans to introduce a tax on digital services even in the absence of a global accord on a so-called ‘web tax’, the Commissioner-designate for Economic Affairs Paolo Gentiloni was quoted as saying on Monday.
“My first task will be to see whether it is possible to introduce a web tax at the OECD/G20 level, that is to say at a global level, because that would be the most effective solution,” Gentiloni, a former Italian prime minister, told daily La Stampa in an interview.
“The Commission will seek to reach an accord by 2020 but if that’s not possible my mission will be to propose a European web tax ... we’re not prepared to wait,” he added.
Reuters
Eddie Stobart warns on profits amid takeover interest
Troubled haulage firm Eddie Stobart Logistics has warned that annual profits will be "significantly below" expectations after a poor first half of the year.
The distributor said that "adverse performance" combined with an ambitious budget, as well as delays on a major project, cut into the company's earnings.
On the back of the profit warning, Eddie Stobart said its leadership team has started a "wide-ranging review" into its operations and financial performance.
Eddie Stobart said it expects revenue for the six months to May 31 to be around £450 million and underlying earnings to be between £10-11 million for period.
Press Association
LONDON (Reuters) - Deutsche Bank said on Monday it cut its probability that Britain will crash out of the European Union on Oct. 31 without a deal to 35% from 50% previously after lawmakers passed a law that could force Prime Minister Boris Johnson to delay the process.
“Elections remain our base case, however. For now, all eyes will be on both the upcoming Party conferences and any possible breakthrough in the run-up to next month’s EU summit,” it said in a note.
US drug company Purdue Pharma has filed for bankruptcy as it faces more than 2,500 lawsuits worth billions of dollars, in relation to its alleged role in America’s opioid crisis.
The company, owned by the Sackler family, manufactured the opioid-based drug OxyContin – marketed as a narcotic painkiller and which has been blamed for a sharp rise in addiction, prescription drug abuse and fatal overdoses.
The company has denied any wrongdoing.
The bankruptcy is part of a framework designed to settle the legal claims and provide further funding to fight opioid addiction in the US.
Harry Cockburn has the full story:
Firm blamed for US opioid crisis files for bankruptcy amid blizzard of multi-billion-dollar lawsuits
Of those who voted, 93 per cent of shareholders voted in favour, with 7 per cent voting against, despite opposition to the plans, including from the family of the group's founder Michael Cobham.
