Key Takeaways
- UK retail sales growth slowed to 1.7% year-on-year in June, missing analyst estimates of 2.9% as a heatwave drove consumers online and away from physical stores.
- U.S. Crude futures surged over 1% to $79.02/bbl following reports that President Trump endorsed Saudi military strikes against Houthi targets in Yemen.
- Barclays UK consumer spending rose 1.9%, a significant acceleration from May's 0.8%, fueled by the men's football World Cup and seasonal demand for cooling appliances.
- BPH Energy (BPH) announced that its investee, Advent Energy, has filed an appeal with the Full Court of the Federal Court of Australia regarding the PEP11 gas permit.
UK Consumer Trends: Heatwave and World Cup Drive Spending
British retail performance saw a divergence in June as total sales grew by 1.9%, according to the British Retail Consortium (BRC), while like-for-like sales growth decelerated to 1.7%. The figures fell short of the 2.7% to 2.9% growth expected by economists, largely due to record-breaking temperatures that stifled footfall in brick-and-mortar locations. In-store non-food sales dropped 1.1%, while online sales surged 5.1% as consumers opted to shop from home to avoid the heat.
Data from Barclays (BARC) painted a more resilient picture of broader consumer activity, showing a 1.9% year-on-year increase in card spending. The bank noted that the arrival of the World Cup provided a massive boost to the hospitality sector, with pub takings tripling on key match days. Additionally, demand for "heatwave essentials" such as electric fans and paddling pools reached record highs, though retailers faced challenges maintaining stock levels.
Geopolitical Tensions: Trump Backs Saudi Strikes on Houthis
Energy markets reacted sharply to a report from Axios stating that President Trump has given Saudi Crown Prince Mohammed bin Salman his backing for "risky" military strikes against Houthi rebels. The endorsement follows a period of heightened cross-border escalations, including a Saudi strike on the Sanaa airport and retaliatory Houthi missile attacks. The news sent U.S. Crude (WTI) futures up more than 1% to $79.02 per barrel as traders weighed the risk of supply disruptions.
The situation in the Strait of Hormuz remains critical, with reports indicating that traffic has plummeted to a two-month low. President Trump has reportedly threatened to resume a naval blockade and suggested a 20% fee on ships transiting the strategic waterway. These developments have introduced a significant "war premium" back into global oil prices, with analysts warning of further volatility if the conflict between the U.S., Saudi Arabia, and Iran-backed forces continues to intensify.
Australian Energy: BPH Energy Investee Appeals PEP11 Ruling
In the Australian energy sector, BPH Energy (BPH) confirmed that its investee, Advent Energy, is moving forward with a legal challenge against a June 17 Federal Court judgment. The original ruling by Justice Jackson dismissed a judicial review application concerning the Petroleum Exploration Permit 11 (PEP11), an offshore gas project located near the Hunter Region of New South Wales.
The appeal, filed by Advent’s subsidiary Asset Energy, seeks to overturn the refusal to vary and extend the permit. The PEP11 project is considered a critical potential source of natural gas for Australia's East Coast, which is currently facing a forecast supply shortfall. Investors are closely monitoring the proceedings, as the outcome will determine whether the joint venture—which includes Bounty Oil & Gas (BUY)—can proceed with exploration activities.
Ed Liston is a senior contributing editor at TheStockMarketWatch.com. An active market watcher and investor, Ed guides an independent team of experienced analysts and writes for multiple stock trader publications.