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Oil prices surge amid US and UK attack on Yemen

Oil prices surge amid US and UK attack on Yemen

The escalation of the conflict in Yemen has triggered a rise in oil prices. Meanwhile, data on increased inflation in the US did not shake investors' confidence in an imminent start of interest rate cuts by global central banks.

The President of the European Central Bank (ECB), Christine Lagarde, announced that the regulator would begin reducing rates once confident that inflation is within the target range of around 2%.

Oil prices rose by more than 2% amid bombings by the US and UK on Houthi bases in Yemen to restore navigation in the Red Sea.

Brent crude futures for March increased by 2.13% to $79.04 per barrel. West Texas Intermediate (WTI) crude futures for February rose by 2.22% to $73.62 per barrel.

The military conflict in the Red Sea keeps the markets tense. The broadest MSCI index of Asia-Pacific stocks showed a modest increase of 0.2%, while Japan's Nikkei index, amid a weak yen, rose by 1.1%, reaching a 34-year high.

China's inflation report confirmed a weak economic recovery: the consumer price index fell by 0.3% from last year's data. However, in December, exports rose stronger than forecasts, and imports also began to grow.

After the US inflation report, trading on Wall Street turned green, and the major indices closed the session slightly higher.

"Comments from the Fed representatives were quite soft; we didn't hear explicit opposition to the idea of a rate cut in March," said Andrew Lilly, an interest rate analyst at Barrenjoey.

Furthermore, Thomas Barkin, head of the Richmond Federal Reserve, stated that the inflation report had little impact on the Fed's intentions.

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