With continuing geopolitical issues and industrial action, the commodities market is witnessing rising volatility.
Consumers may be interested to note that both brent and heating oil have risen in value on the AvaTrade platform this week whilst Groupon, Uber, and General Motors have fallen.
According to Kate Leaman, chief market analyst at AvaTrade, the rising and falling value of commodities is a result of the Israel-Hamas war which continues to escalate.
There are concerns that the price of oil per barrel could “rise to $100” and there are concerns over the political instability in the Middle East.
Leaman said, “Looking at our most rising table this week, both brent and heating oil have increased amid geopolitical issues. Oil prices rose 5% on Friday and brent crude futures have soared to $90 a barrel with worries that it will rise to $100. This comes as the Israel-Hamas conflict continues to escalate, with rising concerns over the political instability in the Middle Eastern region, where over 48% of the world’s oil is located.
“What’s more, if Iran were to become involved in the conflict, there is a risk that up to 20 billion barrels of oil per day will be directly interrupted, causing the price of the commodity to rise even further.
“Elsewhere, the US recently imposed the first sanctions on those possessing Russian oil that is higher than the G7’s price cap of $60 a barrel. Given both Russia being one of the world’s largest crude exporters and the tighter US measures, oil supply could be significantly impacted.
“In this week’s falling table*, Groupon, Uber, and General Motors have all fallen in value. Groupon has taken the top spot following the company’s decision to sell a part of its stake in the electronic payments firm, SumUp Holdings, at a price much lower than expected. This value reduction has resulted in an approximately $100 million loss for Groupon which has inevitably impacted its market capitalisation, leading to a discrepancy to $317.17 million from $360 million.
“Uber is forecasting a considerable uptick in its rideshare and delivery services prices following the decision to include gig workers in its workplace reforms made by the Australian government. In the absence of clearer regulations, ride costs could lead to a 55% increase and a 65% rise in delivery fees during peak times. As inflation continues to persist, consumers may be letting expenses on take-out and private transport take a backseat.
“What’s more, General Motors’ stock price dropped to below $30 during October, the first time in more than three years, amid the United Auto Workers strike. In the first 10 days of the strike beginning in September, the US economy lost over $5 billion. In fact, General Motors’ will report its Q3 results later this month, telegraphing a $200 million hit to profits due to strike-related costs.
“However, Auto Workers in Canada came to a deal with General Motors which consisted of a base-wage increase of 20%, preventing the resumption of the strike. This should put an end to the fall of General Motors share price for the time being.”