Oil prices rose above $100 per barrel on Friday as ongoing tensions with Iran disrupted global energy supplies, fueling concerns over higher fuel costs and inflation. The surge in oil prices came despite efforts by the US to ease supply pressures, including the partial 30-day waiver on Russian oil purchases.
Front-month WTI crude futures settled at $98.71 per barrel, up 3.11%, while Brent crude climbed 2.67% to $103.14, marking the first time it surpassed $100 since August 2022. Traders are closely monitoring how long the supply disruption will last and its impact on global markets.
The rising oil prices weighed heavily on US stocks. The Dow Jones Industrial Average fell 0.25%, the S&P 500 dropped 0.6%, and the Nasdaq Composite slid 0.9%. European markets also extended their losses, with the STOXX 600 down 0.5% and the MSCI global stock index falling 0.9%.
The US dollar gained strength as investors sought a safe haven amid the turmoil, rising 0.8% against a basket of major currencies. Other currencies, including the euro and Japanese yen, weakened under the pressure of rising oil prices and geopolitical uncertainty.
The conflict in the Middle East has intensified after Iran’s new Supreme Leader vowed to keep the Strait of Hormuz closed, raising concerns about prolonged supply disruptions. Analysts warn that higher oil prices could worsen inflation and force central banks to adjust interest rate expectations.
US economic data shows growth slowing in the fourth quarter, while the Federal Reserve’s preferred inflation gauge, the Personal Consumption Expenditures index, rose 0.3% in January. Traders are recalibrating expectations for interest rate cuts this year in response to sticky inflation and rising energy costs.
Investors are now focused on upcoming policy meetings from the Fed, the European Central Bank, the Bank of Japan, and the Bank of England, with most expected to maintain current rates. Meanwhile, gold prices fell 1.27% to $5,014 per ounce, reflecting market caution amid the surge in oil prices.
