By Peter Nurse
Investing.com - European stock markets traded higher Friday, as investors digest the European Central Bank’s jumbo rate hike ahead of a key EU meeting to discuss plans to tackle the region’s energy crisis.
The European Union energy ministers are set to meet later Friday to discuss the 27-nation bloc's response to the energy crisis, including potentially agreeing on the imposition of a price cap on gas imported from Russia.
Soaring gas prices are threatening to push some of the European countries heavily dependent on supplies from Russia into rationing as winter approaches, potentially shutting down industries and sending the region into recession.
New U.K. prime minister, Liz Truss, announced plans on Thursday to cap consumer energy bills for two years and prop up power companies, a move which could cost Britain about 150 billion pounds ($290 billion).
Investors are also digesting the European Central Bank ’s decision to raise interest rates by an unprecedented 75 basis points on Thursday, while pointing towards further increases in the months ahead to tame runaway inflation.
Data released Friday showed French industrial production dropped 1.6% on the month in July, a sharper drop than the revised 1.2% fall the previous month.
In corporate news, ASOS (LON: ASOS ) stock rose 1.3% after the U.K-based online fashion group upheld its full-year sales forecast despite a sales slowdown over the last month.
Oil prices pushed higher Friday, rebounding from an eight-month low, but are set for a second straight weekly decline as aggressive monetary policy tightening and China's COVID-19 curbs weighed on demand.
Data released Thursday by the Energy Information Administration showed a large build-up of U.S. crude inventories of 8.8 million barrels last week, more than that reported by the industry body API on Wednesday, creating doubts about the strength of demand from the world’s largest consumer.
However, this build is likely to have been exaggerated by the government releasing crude stockpiles from the country’s Strategic Petroleum Reserve.
By 04:10 ET, U.S. crude futures traded 1.3% higher at $84.59 a barrel, while the Brent contract rose 1.4% to $90.42. Both contracts were set to lose over 3% for the week, their second straight week of losses.
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