The Albany Gazette - Brent oil tops $100 on Mideast flare-up, fanning inflation fears

The jump in crude futures -- with Brent North Sea rallying 2.8 percent to $100.65 a barrel -- weighed on stock markets, as investors eye interest-rate hikes from major central banks bidding to keep a lid on consumer prices.

European markets were especially jittery, with Paris shedding nearly two percent in afternoon deals.

Oil at "$100 is a psychological level that matters for markets", noted Kathleen Brooks, research director at XTB trading group.

She added that it raises "costs for businesses and consumers and ultimately could weigh on economic growth".

The main US oil contract, West Texas Intermediate, climbed above $95 a barrel.

Meanwhile average diesel prices in the United States reached a record $5.94 a gallon, heaping domestic pressure on President Donald Trump ahead of midterm elections in November.

All eyes are on US inflation data due Friday that could cement expectations that the Federal Reserve will raise borrowing costs at a policy meeting next week.

Before then, the European Central Bank is widely forecast to hike eurozone interest rates on Thursday.

"The continuing conflict in the Middle East is keeping concerns over supply disruptions, and that in turn is worrying investors about the inflationary consequences of elevated oil prices," said Fawad Razaqzada, a market analyst at FOREX.com.

"For the Fed, the combination of resilient US employment and renewed pressure from energy prices are both hawkish signals."

Iran on Wednesday launched fresh attacks against US targets in the Middle East, in retaliation for American strikes on Iranian oil tankers, dragging the foes deeper into war.

Tehran's powerful Revolutionary Guards said they attacked 20 US vessels trying to pass through the strategic Strait of Hormuz, largely controlled by Iran since the war erupted.

Iran added that it would target oil tankers off US-allied Kuwait and Bahrain in retaliation for the US strikes on its tankers.

Away from the war, focus later has fallen firmly on Apple, which is set to unveil a slew of new and updated devices, including a long-rumoured foldable iPhone to compete with Samsung's versions.

It will also be the first major event under new chief executive John Ternus, an Apple veteran who replaced Tim Cook on September 1.

- Key figures at around 1130 GMT -

Brent North Sea Crude: UP 2.8 percent at $100.65 per barrel

West Texas Intermediate: UP 2.3 percent at $95.12 per barrel

London - FTSE 100: DOWN 1.0 percent at 10,705.23 points

Paris - CAC 40: DOWN 1.9 percent at 8,159.34

Frankfurt - DAX: DOWN 1.5 percent at 25,607.48

Tokyo - Nikkei 225: DOWN 0.2 percent at 65,142.78 (close)

Hong Kong - Hang Seng Index: DOWN 0.2 percent at 25,274.96 (close)

Shanghai - Composite: UP 0.3 percent at 3,951.51 (close)

New York - Dow: DOWN 1.2 percent at 52,786.07 (close)

Dollar/yen: DOWN at 153.31 yen from 153.96 yen on Tuesday

Euro/dollar: UP at $1.1645 from $1.1627

Pound/dollar: UP at $1.3562 from $1.3541

Euro/pound: UP at 85.86 pence from 85.85 pence

burs-bcp/sbk

(O.Robinson--TAG)