Oil spike past $100 dampens stock prices, fans inflation fears

Summary

The article reports a sharp deterioration in Middle East security that has disrupted energy markets and pressured global equities. It says Brent crude rose above the psychologically important $100 level, reaching $101.94, while West Texas Intermediate reached $97.79—its highest level since May. Brent reportedly gained more than 20 percent in less than a week. The article attributes the rise to alleged attacks involving the United States, Iran, Saudi Arabia, and Yemen’s Houthi rebels around the Strait of Hormuz and the Bab al-Mandab chokepoint. According to the article, Iran claimed to have attacked more than a dozen vessels attempting to cross Hormuz and expanded a maritime exclusion zone. Iran also reportedly said it struck a U.S. military base in Jordan after U.S. forces destroyed five Iranian oil tankers. Saudi Arabia is described as fighting Houthi forces, which allegedly targeted Saudi oil facilities and reported approximately 40 strikes in a new offensive toward Bab al-Mandab. The reported energy shock has renewed fears of higher inflation and increased expectations that the U.S. Federal Reserve and other central banks may raise interest rates. U.S. diesel is said to have reached almost $6 per gallon. Asian and European stock markets mostly declined, although Tokyo, Mumbai, London, and Paris edged higher. The article says investors are increasingly focused on inflation and central-bank policy.