Both Brent and Nymex WTI have reached the highest level since mid March as oil prices continue to rise thanks to the most recent upward move which saw prices break through their recently reached highs while demand forecasts continue improving as vaccine rollouts reduce uncertainty in markets that are now becoming increasingly optimistic when it comes to the prospect of reopening. Brent is trading above $68 after breaking through its previous high while the USD index dropped to its lowest level since the end of March. Oil giant Saudi Aramco reported a 30% increase in net income, signalling a continued recovery from last year’s oil market crash that saw the company's full-year earnings cut in half. In a release published today, the company said net income rose to $21.7 billion in the first three months of the year, up from $16.6 billion in the same period last year. The biggest threat to the near term oil price rise remains the spike in global covid cases recently in India and as Europe opens up for the summer, the possibility for variants to spread. Any disruption to the recovery from lockdown could have a large impact on demand and therefore oil prices and those stocks that are highly tied to the price of the commodity.
UK stocks up despite delay of indoor dining reopening
Despite their efforts, hospitality bosses have lost a High Court bid to get indoor dining reopened sooner in England, meaning 17 May remains the prospective date from which pubs, cafes and restaurants will be able to serve indoors due to the scientific evidence backing a lower transmission rate outdoors. As one of the most affected sectors from the pandemic, which has seen it’s business disrupted in one of the most extreme ways and several openings which have not led to the rebound in demand that was hoped for with outdoor not being enough to cover the drop. Trade body UK Hospitality recently warned that about £2bn in rent is owed by hospitality businesses with 40% of premises still currently negotiating over unpaid rent with landlords. Nevertheless, UK stocks are up today with the FTSE100 gaining over 0,65% as it approaches the highest level since mid April as it tests the key 7000 points handle. - Walid Koudmani.
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