Oil soars to three-year high on growing Middle East tensions – business live

Good morning, and welcome to our rolling coverage of the world economy, the financial markets, the eurozone and business.

Oil prices soared to their highest levels since December 2014, above $73 a barrel last night. Brent crude futures are at $72.30, still the highest in more than three years.

Donald Trump declared on Wednesday that missiles “will be coming” in Syria, taunting Russia for supporting Syrian president Bashar al-Assad after a suspected chemical attack in Douma near the Syrian capital. Both Damascus and Moscow have denied any responsibility.

Donald J. Trump

Russia vows to shoot down any and all missiles fired at Syria. Get ready Russia, because they will be coming, nice and new and “smart!” You shouldn’t be partners with a Gas Killing Animal who kills his people and enjoys it!

April 11, 2018

Trump’s comments raised the prospect of direct conflict between the two world powers backing opposing sides for the first time in the seven-year-old civil war.

Hidenori Suezawa, financial market analyst at SMBC Nikko Securities, told Reuters:

Last year Russia and Syria did not shoot back against US missiles. But this time the scale of possible attacks by the US and possibly its allies seems larger if Russia fires back, the war front will be bigger.

I don’t think we are heading into World War III but should there be a direct collision between the US and Russia for the first time, that’s the sort of headline that would plunge stock prices.

Michael Hewson, chief market analyst at CMC Markets UK, said oil prices are also under pressure from developments in Saudia Arabia and Yemen.

With nerves already frayed sentiment wasn’t helped by reports that Saudi Arabian defence systems had intercepted a number of missiles fired from Yemen, over the skies of Riyadh, which in turn saw oil prices hit their highest levels since December 2014 above $73.

UK prime minister Theresa May insisted that the chemical weapons attack on Douma “cannot go unchallenged”. She has not ruled out committing the UK to join a coordinated military intervention in Syria without consulting MPs.

The Russian rouble steadied on Wednesday after two days of heavy losses amid mounting concerns over the Syrian conflict and new US sanctions. It closed down around 62.59 to the dollar, still down more than 7% so far this week.

Stock futures are pointing to a flat or lower open in Europe. In Asia, Japan’s Nikkei edged down 0.2% while Hong Kong’s Hang Seng lost 0.7%. On Wall Street, stocks also closed lower. The S&P 500 slipped 0.55% while the Dow Jones lost 0.9%.

Minutes of the US Federal Reserve’s last meeting on 20-21 March released on Wednesday showed all of its policymakers thought the economy would improve further and that inflation would rise in coming months, suggesting a June rate hike remains on the table.


7.30 BST Bank of England deputy governor Ben Broadbent speaking in Sydney

9.30 BST Bank of England credit conditions and bank liabilities surveys – Q1

Halifax regional regional house price index

20.00 BST BOE governor Mark Carney speaking at public policy forum in Toronto

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