22/05/2025

BIZ & FINANCE THURSDAY | MAY 22, 2025

18

Oil prices jump on Mideast supply fears

o US intelligence suggests Israel plans

to strike Iran, CNN reports

LONDON: Oil prices rose more than 1% yesterday after reports that Israel could be preparing to strike Iranian nuclear facilities raised fears of a supply disruption in the Middle East. Brent futures rose 87 cents, or 1.3%, to US$66.25 a barrel by 0807 GMT (4.07pm in Malaysia). US West Texas Intermediate crude jumped 89 cents, or 1.4%, to US$62.92. US intelligence suggests that Israel is preparing to strike Iranian nuclear facilities, CNN reported on Tuesday, citing multiple American officials. It was not clear whether Israeli leaders have made a final decision, CNN added, citing the officials. “Such an escalation would not only put Iranian supply at risk, but also (put supply at risk) in large parts of the broader region,” ING commodities strategists said. Considering Iran exports more than 1.5 million barrels per day (bpd), fears of supply disruptions have helped to drive prices higher, said UBS analyst Giovanni Staunovo. Iran is the third-largest oil producer among the members of the Organisation of the Petroleum Exporting Countries (Opec) and an Israeli attack could upset flows from the country. There are also concerns that Iran could retaliate by blocking oil tanker

Liberia-flagged crude oil tanker Green Admire transits the Bosphorus in Istanbul, Turkiye. – REUTERSPIC

stock data from the Energy Information Administration later this week. Kazakhstan’s oil production, meanwhile, has risen by 2% in May, an industry source said on Tuesday, defying Opec+ pressure to reduce output. – Reuters

However, there were some signs of improving crude supply. US crude oil stocks rose last week while gasoline and distillate inventories fell, market sources said, citing American Petroleum Institute figures on Tuesday. Investors will also assess US oil

campaign of stronger sanctions on Iranian crude exports. Despite the discussions, US officials and the Iranian Supreme Leader Ayatollah Ali Khamenei made comments on Tuesday indicating both sides remain far from a resolution.

flows through the Strait of Hormuz, through which Saudi Arabia, Kuwait, Iraq and the United Arab Emirates export crude oil and fuel. The US and Iran have held several rounds of talks this year over Iran’s nuclear programme while President Donald Trump has revived a

Cyberattack to cost Marks & Spencer £300 million LONDON: British retailer Marks & Spencer said yesterday a “highly sophisticated and targeted cyberattack” would cost it about £300 million (RM1.7 billion) in operating profit, with disruption set to run into July. June and into July as it restarts systems and then ramps up operations. Online sales and trading profit in that division had been “heavily impacted” by the decision to suspend online shopping, it said, though store sales had “remained resilient”. early trade yesterday, extending losses since the cyberattack to 13%. The group said it would use the crisis to “accelerate the pace of improvement of our technology transformation” and had found new and innovative ways of working.

UK inflation rockets in April, Reeves ‘disappointed’

double-digit inflation we saw under the previous administration, but I’m determined that we go further and faster to put more money in people’s pockets,” Reeves said. Sterling rose against the US dollar after the figures were published and was up by almost a third of a cent. The chance of a rate cut in August was cut to 40% by investors, down from 60% before the inflation data. “This data should call into question whether there is a cut ... in August,” Patrick O’Donnell, senior investment strategist at Omnis Investments, said. Interest rate futures pricing suggested investors saw about 35 basis points of BoE rate cuts by the end of 2025, little changed from Tuesday. Services price inflation – a key metric of domestic inflation pressure – leapt to 5.4% in annual terms in April, above all forecasts in the Reuters poll for an increase to 4.8%. It was far above the BoE’s prediction of a reading of 5.0% for April. In April alone, services prices leapt 2.2% – the biggest monthly increase in 34 years. – Reuters

Britain

suffered

a

LONDON:

bigger-than-expected inflation surge in April, including in areas watched closely by the Bank of England which investors now believe will have to slow its already gradual pace of interest rate cuts. Inflation leapt to 3.5% in April from 2.6% in March, the Office for National Statistics said, the highest reading since January 2024 and the largest increase between two months since 2022 when inflation was rocketing above 10%. A jump in air fares over the Easter holiday was a driver of the sharp climb. A Reuters poll of economists had pointed to a reading of 3.3% in consumer price inflation in April. The Bank of England earlier this month projected inflation of 3.4%. The data will add to unease over the outlook for Britain’s economy which grew strongly in early 2025 but is likely to slow in the second half of the year. Finance Minister Rachel Reeves said she was “disappointed” by the inflation figures which further reduced the chance of an interest rate cut in the coming months in the eyes of investors. “We are long way from the

The attack on one of the biggest names in Britain, with 64,000 staff and 565 stores, has shocked the retail sector. It forced M&S’ online clothing operation offline, left some food shelves bare and wiped over a billion pounds from the company’s stock market value. M&S, which was trading strongly before the hack, said online disruption in its fashion, home and beauty division would continue throughout

“We are focused on recovery, restoring our systems, operations and customer proposition over the rest of the first half, with the aim of exiting this period a much stronger business.” British companies and institutions have been hit by increasingly aggressive and regular cyber and ransomware attacks in recent years, with the British Library, a blood testing service and the London Underground all suffering months of disruption. – Reuters European sales rose 1.2%. Chanel said it made “record” investments in 2024, notably acquiring prestige properties in Paris and New York and expanding its global network of stores, including in China and Japan. It planned to pursue that path, by expanding further in China as well as in India and Mexico. Nair told Vogue Business that China was “one of the most dynamic and important markets for the luxury ecosystem” and Chanel had opened 15 new stores there last year. – AFP

In food, M&S said it had been hit by reduced availability and higher waste and logistics costs as it was forced to return to pen and paper systems. It said food sales had since improved. The company said it hoped to halve the expected profit hit for its 2025/26 year through the “management of costs, insurance and other trading actions”. Shares in M&S were down 3.4% in

Chanel reports 28% drop in full-year profit PARIS: French luxury group Chanel said on Tuesday that it suffered a 28.2% drop in net profit to US$3.4 billion (RM14.5 billion) last year because of“challenging” conditions in some markets. Several rivals, such as Hermes, have already hiked their prices to compensate for the 10% tariffs into the US market ordered by President Donald Trump.

Chanel chief financial officer Philippe Blondiaux told Vogue Business that the situation with the US tariffs was “extremely volatile” and “we are waiting to see what will be the outcome of all the ongoing discussions”before deciding. Chanel 2024 sales in North and South America dipped 4.3%, while those in the Asia-Pacific region plummeted 9.3%. Revenues from

“We saw challenging macroeconomic conditions which had an impact on sales in some markets,”CEO Leena Nair said. Global revenue dipped 5.3% to US$18.7 billion. It said the headwinds raise questions over whether it will raise prices, as it typically does twice a year, in March and in September.