Charting the Global Economy: Oil Storms Higher on War Escalation

The monthly jobs report in the US showed employment growth exceeded projections and the unemployment rate fell, with a solid increase in March payrolls. Iran targeted more sites in Arab Gulf states overnight and into Friday, hours after US President Donald Trump issued fresh threats against Iranian infrastructure to pressure Tehran to start peace negotiations. Abu Dhabi suspended operations at its largest natural gas processing facility, while a drone attack caused a fire at Kuwait's Mina Al Ahmadi oil refinery, with a capacity of 346,000 barrels a day. On Thursday, oil rallied above $110 a barrel. Meanwhile, in the US, the monthly jobs report showed employment growth exceeded projections and the unemployment rate fell. The solid 178,000 increase in March payrolls will likely reinforce the Federal Reserve's focus on inflation risks amid the rapid run-up in energy prices. Here are some of the charts that appeared on Bloomberg this week on the latest developments in the global economy, markets and geopolitics: World Oil rallied Thursday after US President Donald Trump vowed an escalation in the war in Iran over the coming weeks, a move that could prolong disruptions to energy flows through the vital Strait of Hormuz. West Texas Intermediate surged 11%, while the global Brent benchmark settled near $109. Europe's diesel futures benchmark climbed above $200 a barrel for the first time since 2022. And Dated Brent, the world's most important price for real-world oil barrels, surged to an 18-year high. Iran's strikes on Persian Gulf aluminum plants are threatening to send a fragile market into crisis, raising the prospect of record prices for the metal used in everything from airplanes to food packaging and solar panels. On the first day of trading after two major producers confirmed attacks by Iranian drones and missiles, futures on the London Metal Exchange surged as much as 6%. US Job growth rebounded in March and the unemployment rate unexpectedly fell, suggesting the labor market was stabilizing as the Iran war began. Payrolls gains were fairly broad and the unemployment rate dipped to 4.3%. Retail sales rebounded by more than forecast in February in a broad advance as consumers stepped up spending after a slow start to the year. The retail figures indicate consumer demand was holding up ahead of the Iran war, helped by wage growth that is outpacing inflation and larger tax refunds. Europe The euro area saw its steepest jump in inflation since 2022 as the Iran war pushed energy costs sharply higher, backing expectations that the European Central Bank will have to raise interest rates. Consumer prices rose 2.5% from a year ago in March - up from 1.9% the previous month and the highest since January 2025. Core inflation unexpectedly slowed. UK house prices unexpectedly surged in March, according to one of the country's largest mortgage lenders, as demand appeared to hold up at the start of the Iran war. Nationwide said average home values rose 0.9% to £277,186 ($366,000) in March, the strongest increase since December 2024. Asia China's factories saw a huge run-up in input costs even as their activity expanded for the first time this year, in one of the first tangible signs of spillover from the conflict in the Middle East that's threatening profits. Chinese companies recorded their fastest surge in raw material costs and output prices in about four years, data published by the National Bureau of Statistics showed. China's central bank withdrew cash from its financial system for the first time in a year, a cautious signal that keeps its policy options open as higher oil prices filter through the economy. The withdrawal marks an abrupt reversal from months of a buildup in liquidity, when officials steered the world's second-biggest economy through its steepest slowdown since the reopening from Covid lockdowns in late 2022. Emerging Markets Egypt kept interest rates unchanged, seeking to tame the impact of the US-Israel war on Iran that's sent energy prices soaring and the pound to a record low. The central bank left its benchmark deposit rate at 19% and the lending rate at 20%. Egypt started trimming rates from a record last year in a bid to spur private investment and trim interest payments on state debt.