Fuel frenzy sparks chaos on UK forecourts

September 27, 2021

In our weekly Market Monday insights, Prosperity Investment Management examines the latest developments across the globe's biggest financial markets - providing you with all the latest information you need to know.

Forecourts across the United Kingdom have seen unprecedented demand as motorists flock to fill their vehicles amid fears of a potential fuel shortage.

The Petrol Retailers Association has warned that as many as two-thirds of its membership of nearly 5,500 independent outlets are out of fuel, with the rest of them "partly dry and running out soon". 

The frenzy comes as fears grow over the widespread shortage of HGV drivers affecting deliveries and supplies of fuel to filling stations. The UK Government has suspended competition laws to allow oil firms to work together to address the issue and offered temporary three-month visas to European workers but has stopped short of calling in the army to drive fuel tankers to stations.

In the United States, the week’s jobs data appeared to defy hopes for a resurgence in the labour market, with first-time jobless claims rising to 351,000, well above consensus forecasts and the highest number in a month. IHS Markit’s survey of both manufacturing and services sector activity in September also came in below expectations but still indicated healthy expansion, especially in the former. Conversely, housing data mostly came in on the upside, with both housing starts and permits easily surpassing expectations. New home sales in August also hit their highest level (740,000) in four months, although they remained well below their peak a year earlier (977,000).

Mainland Chinese stocks ended a holiday-shortened week broadly flat from the previous Friday after being closed Monday and Tuesday for the Mid-Autumn Festival. The market’s subdued performance was noteworthy after Hong Kong’s Hang Seng Index fell more than 3.0% on Monday amid the mounting debt crisis surrounding China’s Evergrande Group. A series of large cash injections by China’s central bank during the week helped ease worries about a disorderly debt resolution for the indebted developer. However, some of Evergrande’s offshore bondholders did not receive their portion of USD 83.5 million in interest payments by Thursday’s deadline, according to Reuters.

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