Oil and gas prices continued to fluctuate on Friday, while stock markets struggled to find direction due to the escalating conflict involving the US, Israel, and Iran.
UK natural gas prices eased slightly in early trading after surging more than 20 per cent on Thursday, reaching their highest level in three years. Meanwhile, Brent crude extended its gains, climbing 2 per cent to nearly $111 a barrel after hitting $119 on Thursday.
Markets reacted sharply to ongoing energy disruptions in the Gulf. The FTSE 100 opened higher but then dropped as much as 0.6 per cent, eventually closing nearly flat at 10,053.6. European indices also fell, with France’s CAC 40 and Germany’s DAX both down 0.4 per cent.
This volatility follows Israeli strikes on Iran’s South Pars gas field, which prompted retaliatory attacks on Qatar’s Ras Laffan facility, damaging key installations, including Shell’s gas-to-liquid plant.
Investors were briefly encouraged after Israeli Prime Minister Benjamin Netanyahu announced he would hold off on further strikes at the request of US President Donald Trump. However, analysts warned that market turbulence is unlikely to subside soon.
Ipek Ozkardeskaya, a senior analyst at Swissquote, stated, “Despite a relatively calmer morning session, uncertainty and volatility will remain prominent.” Saxo Bank experts added, “The disruption has already caused an unprecedented supply shock, with Gulf producers shutting in around 10 million barrels per day. This is intensifying global inflation pressures while raising fears of slower economic growth.”
With no resolution in sight three weeks into the conflict, traders and investors are preparing for continued fluctuations in energy and financial markets. In contrast, the knock-on effects on inflation and household energy bills remain a growing concern.
