British consumer spending fell even before the jump in living costs due to rising energy prices due to the war in the Middle East.
Bloomberg News Agency reported that retail sales fell in September by more than expected and amounted to 0.4 percent compared to the previous month, as consumers reduced their purchases of clothing due to the mild weather, while sales of food and high-cost goods such as appliances also decreased.
On the other hand, the GfK Market Research Institute stated that its index measuring consumer confidence in Britain fell to negative 24 points this month, a decrease of 11 percentage points compared to last September.
Excluding the pandemic period, this percentage represents the largest rate of decline since the British narrowly voted to leave the European Union in 2016.
This decline in confidence levels dissipated the improvement that was achieved during the summer after Andy Burnham assumed the presidency of the government and announced that he would provide a helping hand to British families facing the problems of high prices.
Bloomberg quoted Neil Bellamy, Director of Consumer Insights at the GfK Institute, as saying: “The speed of this deterioration is worrying, as consumers are now facing pressure from rising costs of living in light of an international scene of regional conflicts that continue without a solution.”
Oil prices rose during Friday's trading session, with Brent crude touching its highest level in more than five months, amid fears of an escalation in the pace of war in the Middle East, which may increase disturbances in energy supplies from the region.
By 08:10 GMT, Brent crude futures rose 79 cents, or 0.7 percent, to $113.96 a barrel, after earlier reaching $114.72, its highest level since May 4. US West Texas Intermediate crude futures increased $1.10, or 1.1 percent, to $100.57.
Brent is heading for a third consecutive week of gains of nearly 4 percent, while West Texas Intermediate crude is expected to end the week down 0.8 percent.
“The market is still concerned about an escalation, which could lead, in a worst-case scenario, to renewed supply disruptions,” said Giovanni Staunovo, an analyst at UBS, according to Reuters, adding that the volatility of oil flows and high shipping rates caused a shortage in supply.
Fighting has intensified between the Houthis and the Saudi-led coalition supporting the internationally recognized Yemeni government since the Houthis, allied with Iran, advanced towards the Bab al-Mandab Strait.
Linh Tran, an analyst at XS.com, said: “The main factors to monitor now are the extent of the actual disruption and the time required to resume operations, as these two factors will ultimately determine the value of the risk premium that the market will be willing to bear for the sake of supplies.” She added: “If the attacks continue and lead to delays in deliveries, the rise in prices will have a stronger basis.”
In Libya, the valve of the oil pipeline extending from the Hamada and Tahara fields to the port of Zawiya was closed, leading to a decrease in production in both fields, the head of the National Oil Corporation said on Thursday.
On the other hand, data from the London Stock Exchange Group showed, on Friday, that a tanker flying the Maltese flag and loaded with up to 40,000 tons of Russian diesel is heading towards New York.
Russia agreed to lift the ban on diesel exports in order to supply global markets, including the United States, in an attempt to reduce fuel prices following an agreement between US President Donald Trump and his Russian counterpart, Vladimir Putin.
Copper fell, on Thursday, to its lowest level in more than five weeks, as additional quantities continued to flow into London Metal Exchange warehouses, which contributed to alleviating some concerns about supplies, despite continued expectations of regional supply bottlenecks outside the United States.
By 16:00 GMT, the benchmark copper price for delivery after three months on the London Metal Exchange fell by 1.8 percent to $14,089 per metric ton. During the session, the metal recorded its lowest level at $14,031, which is the lowest level since September 15, according to Reuters.
Copper stocks in London Metal Exchange warehouses rose for the fourth day in a row, after entering 29,050 tons on Wednesday, most of which was concentrated in the exchange’s storage center in New Orleans in the United States.
Thus, total registered copper inventories reached 272,950 tons, the highest level since July 24, following earlier flows during the week to New Orleans and Baltimore. About 62 percent of all listed copper stocks are currently located within the United States.
Alistair Munro, chief metals strategist at the brokerage firm Marks, said that the recent increase in copper stocks on the London Metal Exchange came as a result of the contraction in the price premium on the US COMEX exchange as contract delivery dates approached.
Traders had shipped quantities of copper to the American COMEX exchange throughout most of this year, seeking to avoid potential customs duties on the metal, which pushed prices on the American stock exchange to rise above their levels on the London Metal Exchange.
But this situation changed, as the prices of nearby contracts on the COMEX became lower than their counterparts on the London Metal Exchange, which encouraged shipments to be directed to the London Stock Exchange instead. The “price decline” situation on the London Metal Exchange, in which spot delivery prices are higher than futures delivery prices, also contributed to stimulating deliveries.
In the latest trading, the price of copper for immediate delivery on the London Metal Exchange recorded a premium of $116 per ton compared to the contract price for delivery after three months, indicating continued scarcity of supply in the near term.
In a related context, industrial metals were under pressure as a result of selling operations in stock markets, which came against the backdrop of doubts about the prospects of artificial intelligence.
In other metals, aluminum fell by 1 percent to $3,010 per ton, zinc fell by 2.2 percent to $3,670, while lead fell by 0.7 percent to $1,896.50, despite an order to withdraw 46,800 tons of it from warehouses in Singapore.
Nickel also fell by 1 percent to $16,060, after jumping by 3.7 percent during the previous session, against the backdrop of indications of a reduction in production in Indonesia. Tin, in turn, fell by 1.7 percent to $50,330.
