In mid-morning trading, the FTSE 100 has risen 20 points, but all eyes are on crude oil after events in the Middle East.

- Oil spikes on tanker explosion news
- Indices see cautious early gains
- Tesco issues disappointing update

News this morning has bee dominated by reports of damage to oil tankers in the Gulf of Oman. The number of attacks in the region is on the rise, with today’s reports coming a day after explosions on board Iranian vessels. Geopolitical concerns are now front and centre, although the cause of today’s explosions is yet to be identified. Oil prices have suffered heavily off the back of rising US crude stockpiles, but today the price of both Brent and WTI has rallied off the lows of June. With an OPEC report due to be released soon, the oil price looks primed for further upside in the short-term at least. Higher oil prices have bolstered oil companies across Europe, with indices making early
gains after some mixed trading over the past few days, but markets continue to keep a worried eye on developments in Hong Kong while also awaiting any further developments in the US-China trade spat.

Has Tesco peaked once again? That will be the question asked this morning after the latest trading update. While the firm blamed the weather (who doesn’t) and also the lack of big events so far this year, it looks like the big chains are still to come up with a durable response to the ever-present threat posed by Aldi and Lidl. The easy work has been done, now Tesco has to find a new offer to keep shareholders enthused.

Ahead of the open, we expect the Dow to start at 26,078, up 74 points on last night’s close.

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