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  • Today's business and finance round up 29th September 2021

Today's business and finance round up 29th September 2021

📈Oil price reaches three-year high

29th September 2021

Good morning People who suspect they have been victims of fraud can now call a new number - 159 - which aims to be a '999 for fraud'. The 159 number is being trialled by Stop Scams UK, a group of banks and telephone firms.

Today's stories

  • Oil price reaches three-year high

  • Gov takes over rail franchise after £25m breach

ENERGYOil price reaches three-year high

What’s going on?After collapsing at the start of the pandemic to below $20 a barrel, crude oil prices have rebounded and are now above $80 for the first time in three years.

Why is this important?

Yesterday Brent crude, the global benchmark oil price, rose for the seventh day to touch $80.20, its highest price since October 2018. A combination of soaring demand and supply constraints are driving the price increases.On the demand side the reopening of economies from lockdown has meant high demand for energy across several industries. But supply has struggled to keep up with hurricanes Ida and Nicholas passing through the Gulf of Mexico and damaging US oil infrastructure, a major producer.The recent turmoil in the natural gas market has also made oil a relatively cheaper alternative for power generation, which in turn has increased demand.As we enter winter the demand for energy will only increase. Analysts at Goldman Sachs believe oil prices could rise to as much as $90 before the year is out.This has led to further fears among investors that inflation will become more persistent due to rising energy prices. As a result the pound suffered its biggest one-day drop against the dollar, tumbling 1.3% to just under $1.3530. It was its lowest since January, as investors sought safe haven in the dollar.TakeawayDemand for oil and gas has risen sharply over the past few weeks with consumers paying more for petrol and on energy bills. However as the cost of fuel goes up, shares in oil and gas giants like BP and Shell get a boost. Even though these companies have tried to move towards renewable energies in recent years, they still generate huge revenues and profits from the sale of oil and gas.

TRANSPORTGov takes over rail franchise after £25m breach

The Southeastern rail franchise is being turned over to public ownership after its owners failed to declare £25m in taxpayer funding that should have been returned.The current operator London & South Eastern Railway (LSER) said it had repaid the funding but it’s too little too late, the government says the trust has gone.It will start running the network, which covers London, Kent and East Sussex, from 17 October. The government assured passengers there would be no change to fares, tickets or services.In a sharply worded statement, the Department of Transport said there was a serious breach of the franchise agreement dating back to 2014. Evidence of the £25m breach came as the government negotiated with LSER over a new operating contract, due to start next month.Southeastern becomes the third rail franchise to be placed under public ownership following London North Eastern Railway and Northern.LSER’s problems may have just begun, the Serious Fraud Office is reportedly being involved and a criminal investigation could be on the way.The events have also put other rail operators under a spotlight with calls for forensic auditing of accounts to find any wrongdoing.Shares in Go-Ahead Group, which owns 65% of LSER, fell 25% following the news. The firm announced Elodie Brian has resigned as group chief financial officer and will be standing down from the board with immediate effect.

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