Chart of the week: the sudden rise

Data-driven insights and analysis from our investment team every week.

Over the last week we there has been an escalation in the conflict between Israel and Iran. So far, it has followed the patterns of recent years, targeting military installations and thus avoiding a broad conflict. Unfortunately, there is the humanitarian cost for the countries involved, for the rest of the world the main impact comes through the oil price.

Our chart this week shows the movement in the Brent price for oil over the last two years and you can see that it has spiked upwards over the last couple of weeks. However, we must keep this in context. Firstly, it has moved up from a very low level, perhaps an oversold level, and it is still 3% below where it started the year. Secondly, the average Brent price for oil over the last 2 years is $79. The current price is still 7% below that price. A rising oil price is not good news for the developed economies, but the recent rise has not brought it to levels that are out of line with what we have had over the last couple of years. We will continue to watch the oil price but at the moment it has not got to levels which would cause any noticeable dislocation.