Oil prices are climbing this morning, as investors worry about future supply in the event of an EU ban on Russian oil, and amid reduced flows from Libya.
Brent crude, the global benchmark, rose 1.5% to $108.40 a barrel, while US light cure gained 1.4% to $103.63 a barrel.
Libya, a member of the Opec oil cartel, said yesterday that it was losing more than 550,000 barrels a day due to blockades at major oil fields and export terminals.
Introduction: World Bank warns of ‘human catastrophe’ from food crisis
Good morning, and welcome to our rolling coverage of business, the world economy and the financial markets.
The world is facing a “human catastrophe” from soaring food prices following Russia’s invasion of Ukraine, according to the president of the World Bank, David Malpass.
in an interview with the BBC, Malpass warned that record rises in food prices would push hundreds of millions of people into poverty. He said on the sidelines of the IMF-World Bank meetings in Washington:
It’s a human catastrophe, meaning nutrition goes down. But then it also becomes a political challenge for governments who can’t do anything about it, they didn’t cause it and they see the prices going up.”
The World Bank estimates that could be a “huge” 37% increase in food priceswhich is “magnified for [the] poor”, who will
eat less and have less money for anything else such as schooling. And so that means that it’s really an unfair kind of crisis. It hits the poorest the hardest. That was true also of Covid.
It’s affecting food of all different kinds: oils, grains, and then it gets into other crops, corn crops, because they go up when wheat goes up.
Ukraine and Russia are major exporters of wheat and other grains but the war has disrupted production. Malpass called on governments around the world to increase supply of food, energy and fertilizer wherever possible and to introduce measures targeted at the poorest.
Malpass also warned of a debt crisiswith developing countries struggling to service large debts that have grown during the Covid pandemic, amid soaring food and energy prices.
As many as 60% of the poorest countries right now are either in debt distress or at high risk of being in debt distress.
European Stock Markets bounced back yesterday after losses earlier in the week, while on Wall Street the tech-heavy nasdaq fell 1.2%, dragged down by Netflix. The streaming giant’s shares crashed 35% after it said it expected to lose 2 million subscribers in coming months.
Many Asian markets are up on Thursday, as Japan’s Nikkei rose 1.2% and the Australian market added 0.3%. However, Hong Kong’s Hang Seng lost more than 2% and the Chinese CSI 300 index fell 1.8%, dragged down by worries about the Chinese economy. European shares are expected to extend their bounce, supported by positive company results.
also coming up
The central bank ‘holy trinity’ of US Federal Reserve chair Jerome Powell, European Central Bank president Christine Lagarde and Bank of England governor Andrew Bailey are all due to speak in Washington DC later today.
Michael Hewson, chief market analyst at CMC Markets UK, said:
Lagarde’s comments will be closely scrutinized after yesterday’s comments from Latvian governing council member Martin Kazaks said that a rate rise in July was possible, and that tightening measures needn’t have to wait for evidence of wages growth. Those comments were in contrast to the tone of Lagarde’s ECB press conference earlier this month, so it will be notable if she doesn’t push back on them.
Sterling traders will be looking for clues from Bank of England governor Andrew Bailey on the central bank’s intentions at its May meeting when some form of rate hike is expected, although the extent of any move remains uncertain, whether it be 25 basis points or 50bps. Traders would still be well advised to exercise some caution with respect to any comments Bailey might make given that in previous instances Bank of England guidance has been about as reliable as a chocolate teapot.
IMF/World Bank spring meetings in Washington
- 7.45am BST: France business confidence for April
- 10am BST: Eurozone inflation final for March (forecast: 7.5%)
- 1.30pm BST: US Initial jobless claims for week of 16 April
- 2pm BST: Bank of England policymaker Catherine Mann speaks
- 3pm BST: Eurozone Consumer confidence flash for April (forecast: -20)
- 4.15pm BST: IMF managing director Kristalina Georgieva holds press conference
- 5.30pm BST: Bank of England Governor Andrew Bailey speaks at Peterson Institute for International Economics
- 6pm BST: Georgieva, ECB president Christine Lagarde, Fed chair Jerome Powell and others discuss the global economy
George is Digismak’s reported cum editor with 13 years of experience in Journalism