Attempts to refloat the giant cargo ship blocking the key trade route have failed so far, leading to growing fears that tankers bringing oil into Europe will have to divert all the way around the Cape of Good Hope.
The FTSE 100 is one of the most sensitive stock market indices to the oil price due to its dominance by old fossil fuel companies, particularly BP and Shell, whose shares ebb and flow with the daily value of crude.
Yesterday the oil price fell amid hopes the 200,000 tonne cargo ship would be shifted but those expectations are gradually seeping away as the hours pass.
Traders on the IG platform were calling Brent crude up 1.3% today before the market opened, with the FTSE 100 forecast to rise 48 points to 6721.
Markets in Europe were also swayed by the positive finish last night to US stocks, which started off weak but finished higher.
CMC Markets traders are calling the Dax in Germany up 89 at 14,710 and the Cac 40 in France up 38 at 5,990.
The Dax and Cac yesterday managed to close higher, unlike the FTSE.
CMC analyst David Madden said it was notable that the falls in European markets due to the botched vaccine rollout there had tended to be fairly shallow. This, he said, suggested investors were not as troubled by the prospects for European recovery as it might initially seem.
“For all the concerns about valuations, in Europe at least the appetite for stocks is still there, despite uncertainty around rising infection rates and the slow rollout of vaccines,” he said.
UK retail sales data out soon should show a bounceback from January’s awful 8.2% decline. Online sales are expected to pull back sales in February to perhaps 2.1%, economists predict.
Naturally, the closure of bars and restaurants will continue having a major impact that operators cannot offset with digital sales.
Later, in the US, personal spending data will give an updated picture of the impact of the crisis on consumer confidence in the world’s biggest economy. Stimulus payments from the government should boost the February data, which will not include the $1.9 trillion stimulus Joe Biden pushed through earlier this month.