Surging oil prices will ‘serve to further stoke inflation’ and hit recovery

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Shell’s share price defied a near-3.9 percent slump in the FTSE 100 caused by the attack on Ukraine.

It came as the price of Brent crude jumped to more than $100 a barrel, with experts Rystad Energy predicting it will nudge $130 by June.

Russ Mould, investment director at broker AJ Bell, said the oil price surge “was terrible news for businesses and consumers” because “it will serve to further stoke inflation”.

Defence giant BAE Systems was among just seven FTSE 100 firms which closed up yesterday.

The blue-chip index’s fall was mirrored by other markets around the globe.

The FTSE All-World Index, which takes in most markets, fell by two percent.

Fears of a protracted crisis in Ukraine led to concerns that the global economic recovery could be derailed.

Pantheon Marcroeconomics research consultants said: “The rise in energy prices in response to Russia’s decision to attack Ukraine has significantly darkened the outlook for the UK economy.”

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The price of gold – seen as a safe haven in troubled times – hit an 18-month high yesterday.

The spot gold price rose 0.9 percent to $1,923.86 per ounce, having touched $1,973.96 earlier, its highest value since September 2020.

Traders also bought into low-risk government bonds.

Among markets abroad, Germany was among the hardest hit given its reliance on Russian gas imports.

On Moscow’s stock exchange share prices plummeted more than 50 percent.

In the US, the Dow Jones was down almost two per cent while the S&P 500 fell nearly one percent.

Walid Koudmani, chief market analyst at brokerage XTB, said: “Investors hate uncertainty and whilst it’s inevitable the West will respond to Russia’s aggression, what’s unclear is by what severity and how the situation could escalate further.”

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