Oil Prices Surge as Middle East Tensions Escalate
The global market remains cautious due to rising oil prices and escalating tensions in the Middle East. Brent crude futures have risen nearly 1.5% to $97.6 a barrel, marking their highest level in seven weeks.
Iran's announcement of a restricted zone outside the Strait of Hormuz has led to increased concerns about supply disruptions, causing oil prices to surge almost 8% last week and reaching a 35% increase from its pre-war levels.
The impact on fuel prices is already being felt, with diesel hitting record highs last week. Central banks are now expected to raise interest rates in response, making this week's U.S. consumer price reading a key focus for investors.
Market analysts predict that the European Central Bank will increase its benchmark rate to 2.75% on Thursday and potentially to 3.0% by December, while the Federal Reserve is also expected to raise rates, with markets pricing in a 58% chance of a hike when it meets on September 16.