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Oil prices to hit $100; Asia stock markets fall as Middle East tensions increase
Brent crude climbed to $100 per barrel Wednesday, keeping Asian stock markets calm as the attacks intensified in the Middle East. This stoked inflation fears ahead of closely-watched U.S. consumer price indices. As traders exited their short positions, the yen rose to a near seven-month high against the dollar. This was due to expectations of faster Bank of Japan rate hikes as well as a possible rush of Japanese capital repatriation. The euro climbed ahead of Thursday's European Central Bank policy announcement, as markets were expecting an increase amid inflationary pressures due to the Iran War. Iranian-backed Houthis launched attacks on Saudi cities?on Tuesday. Meanwhile, U.S. forces struck multiple Iranian oil tanks and Iran attacked a U.S. military base in Jordan. Prices of oil jumped by more than $1 for the fourth consecutive session on Wednesday. Brent crude futures rose by $1.57 a barrel to $99.49, their highest level since June. ?U.S. West Texas Intermediate crude oil was $94.63 per barrel, an increase of $1.60. The Hang Seng in Hong Kong fell 0.6%, and blue chips on the mainland of China edged up by 0.2%. The rebound in chip and AI stocks has helped other regional benchmarks, however. Japan's Nikkei is up 0.6% after Tuesday's 1.7% drop. South Korea's KOSPI jumped a?1.6%, while Taiwan's TAIEX grew 0.6%. Japanese cable manufacturers?surged following Verizon and Corning signing a deal on high density optical fibre. Overnight, the Philadelphia SE Semiconductor index rose 1.3% despite declines in Wall Street's main three indexes. U.S. S&P futures rose 0.1% after the cash index fell 0.6% on Wednesday. "Across several of the major macro markets, we see indecision in the price action -- tight ranges and a general holding/consolidation pattern," Chris Weston, head of research at Pepperstone, wrote in a client note. Brent crude is "one of most clear real-time signals" for sentiment for the entire market. $100 "now seems like an extremely achievable level," said he. Recent weeks have seen a rise in bond yields due to inflation fears. Traders are pricing higher odds of central bank tightening. The U.S. CPI is due Friday. The odds of the U.S. Federal Reserve raising interest rates by a quarter point or holding them steady on Wednesday next week are almost equal, while the BOJ is all but certain to increase the rate by a quarter point two days later. The yen increased by 0.2%, to 153.66 dollars per yen. This is a slight increase from its previous high of 152.89. Market players say that it 'had surged about 4% in the last five sessions. Hawkish comments by BOJ officials were ostensibly what triggered a move which then snowballed when breaks of key levels led to additional buying. Thursday, the ECB will almost certainly raise rates in the euro zone by a quarter-point. The euro added 0.1% to $1.1629 and is now in the middle of its range for the last three weeks. The pound was little changed at $1.3545. The Bank of England is due to announce their latest policy decision next Thursday. Economists predict that the key rate for the rest of the year will remain unchanged. The Australian dollar rose by 0.1% to $0.7222. Bitcoin climbed to $78,680.60. Gold rose 0.3% to $4,368 per ounce.
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Early trade: Oil prices jump $1 after Iran launches missiles against Jordan
The oil prices rose for the fourth consecutive session on Wednesday, rising'more than $1' in the early trade after Iran launched new attacks on U.S. assets - in the Gulf as the war between Washington and Tehran continues to spread across the region. Brent crude futures were up $1.57 or 1.6% to $99.49 per barrel at 0001 GMT. U.S. West Texas Intermediate Crude was $94.63 per barrel, up $1.60 or 1.72 %. Brent crude prices have increased by 25% since early August, as the hopes of a 'permanent resolution' to a six-month old war faded. In retaliation to a 'U.S. attack on Iranian oil tankers,' Iran's Revolutionary Guards claimed that they had launched ballistic missiles against two U.S. destroyers in Jordan's Al Azraq and what they called 'a U.S. 'base in Jordan's Al Azraq. Attacks on Iranian oil tanks. The state news agency quoted the military as saying that Jordan's air defence systems destroyed 18 out of 20 ballistic missiles launched from Iranian territory. Two missiles fell into unpopulated areas, and no one was injured. Marco Rubio, the U.S. Secretary for State, warned Iran of a retaliatory strike against?Iranian tankers for attempting to attack U.S. warships. Rubio said during a trip to Colombia that Iran continues to try to strike U.S. navy ships. "For every time they try this, they will lose tankers," Rubio informed reporters. The U.S. Central Command announced?on?Tuesday that its forces destroyed five Iranian crude?oil?carriers?on September 8 following two failed missile attacks against a U.S. Navy Warship.
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Oil prices rise as Middle East inflation worries persist
On Tuesday, stocks fell and oil prices soared to $100 per barrel as investors fretted about inflation and the ongoing conflict in Middle East. The three main U.S. indexes all fell on Tuesday, starting off the holiday-shortened work week in a negative note. The Dow Jones Industrial Average ended down 1.18%. Meanwhile, the S&P 500 fell 0.58%. And the Nasdaq Composite dropped 0.32%. The MSCI index of global stocks was down by 0.55% last week. Oil prices rose after the?Houthis, backed by Iran, attacked Saudi energy installations in Yemen. Brent crude oil rose 2.13% to $99,07 per barrel while U.S. crude increased 2.82% to $94,05 per barrel. Inflation has risen in recent weeks and this is partly due to the rise in bond yields which have reached multi-year highs. This puts pressure on central banks to increase interest rates. The European Central Bank will almost certainly raise the euro zone rates by a quarter-point on Thursday of this week. Meanwhile, the Bank of Tokyo is likely to do the same thing next week. This has put the yen in a position for its biggest rally in the past two years. Federal Reserve will also be reviewing its rates on September 16, issuing a statement. The U.S. data on inflation released by the Federal Reserve this Friday may be decisive for setting expectations about the outcome of its upcoming meeting. Money markets indicate that traders currently attach a 58% chance to a rate increase. The yen's rise is a major concern for the global markets. Oil was the main theme on Tuesday. Due to its low yield, traders borrowed yen to buy higher-yielding assets, including currencies, bonds, and equities. This strategy is known as carry trading. The yen gained nearly 4% in the past week, its biggest week-on week increase since July 2024. On Tuesday it was around 153.97 and the dollar was slightly lower for the day. The dollar index, which measures greenbacks against a basket currencies including the yen, the euro and other major currencies, increased by 0.02% at 98.86. Copper, a commodity other than oil, hit a new record on Tuesday as the global supply was tightened. The metal continued to flow into the U.S. in anticipation of possible tariffs. The price of three-month copper at the London Metal Exchange was up 1.5% to $14,728 per ton. On the bond market, U.S. benchmark 10-year Treasury bills yielded 4.8%. This was not far from their highest since November 20,23.
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Alberta landowners sue regulator over oil well cleanup
Alberta landowners have filed a lawsuit to argue that the energy regulator of the province has knowingly and chronically underfunded a program designed to protect the public against the costs of cleaning abandoned oil and natural gas wells. The legal action is a culmination of years' simmering tensions between farmers, ranchers, and oil and natural gas producers in Canada’s largest energy-producing province. This province has struggled with thousands of "orphan" or "wild" wells which dot the rural landscape of Alberta. The Alberta Energy Regulator is being questioned about its willingness to enforce environmental rules at a moment when the Canadian and Alberta government are eager to increase domestic oil production due to the escalating U.S. trade war. Alberta has about 7,300 oil and gas inactive wells that were left in many cases due to company bankruptcy. The Orphan Well Association, a group funded by the industry and responsible for cleaning these sites and reclaiming them, has decommissioned 8,900 wells in Alberta since 2002. The cost to remediate the remaining backlog has been estimated at C$1.66 Billion. Two landowners, the Alberta Surface Rights Federation, and the Polluter Pay Federation filed an application in an Alberta courtroom Tuesday asking for a judicial review to determine the legal responsibility of the Alberta Energy Regulator. They wanted the Alberta Energy Regulator to make sure that the burden of cleaning orphan wells falls on industry, and not the taxpayers. The lawyer who represents landowners, Susanne Calabrese, told reporters on Tuesday that the Alberta Energy Regulator had consistently set the amount oil and gas companies have to pay in order to fund the work of the Orphan Well Association at a too low level. The levy for this year was approximately C$154,000,000, which represents only 11% of the estimated total cost to close wells. Calabrese stated that the funding for cleaning up abandoned sites does not keep pace with the growing pile-up, which poses a 'health and safety risk to landowners -- many of whom have wells on their properties -- as wells as financial risks to tax payers. She said, "The safety net falls further and further behind." The Alberta Energy Regulator refused to comment on this legal proceeding. Dwight Popowich is a landowner who has been fighting for years to clean up an inactive oil well on his property. He said that most rural Albertans are in favor of oil and gas development as long as the companies "clean up after themselves". Popowich stated that "that promise has been broken repeatedly, both to me and to?thousands other Albertans." Abandoned oil and gas wells are associated with many risks including methane leakage and soil and ground contamination. They also pose a financial burden for cleanup.
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Nike shareholders reject climate proposals backed by Norway Wealth Fund
Nike announced on Tuesday that its shareholders rejected a proposal calling for more transparency in regards to the sportswear company's climate goals. This included revealing details about how it intends?to reach its?emissions reduction targets. The resolution of the'shareholders' raised questions about Nike's environmental goals, given that it is facing financial pressure, U.S. government pressure, and international regulatory scrutiny for misleading environmental claims. Nike, based in Oregon, said it would reduce its carbon emission by 65% within its own operations by 2019 and by 30% across its supply chains by 2030. In a fiscal update for 2024 it reported that its supply chain emissions were down 11% from the baseline of 2015. The company did not disclose the vote totals of its shareholders. It has a capitalization market value of $56 billion. Norway's wealth funds, according to LSEG, the 11th largest shareholder in Nike, announced this week that it will support the drive for greater transparency. Nike hasn't dropped the ball. Giovanna Eichner, shareholder advocacy at Green Century Capital Management, the company that introduced the climate proposal, said, "We want to know more about what is really happening." It's not clear if the same level of commitment is being made to achieving goals. Nike's 2024 impact report detailed the company's efforts to recycle polyester and rubber, and assist factories in its supply chains source renewable energy. Last year, the details of these climate initiatives were replaced with a list containing data on waste and emissions. Nike's Board urged shareholders to reject the proposal. In a filing, the board stated that Nike remains committed to reducing emissions of greenhouse gases and that management is the "best-positioned" to determine targets and disclosures. Athletic footwear maker, Elliott Hill, is struggling with slumping sales and declining market share. This comes after two years of his tenure. Shares are down about 40% this year. EXECUTIVE COMMUNITY COMPENSATION APPROVED The company's shareholders voted in favor of the contested proposal to approve executive compensation on Tuesday. Hill's compensation totaled more than $36 million for fiscal 2026. Norway's wealth funds had stated that it would vote against executive compensation. They argued that Nike's Board "should ensure that benefits are clearly justified in terms of business." Glass Lewis and Institutional?Shareholder?Services, proxy advisers, had advised voting against the compensation packages. A proposal from a group conservative investors asking Nike to exclude gender transition surgery for minors from employee health plans failed as well. This resolution, which was part of a larger campaign against employers and Nike, has increased scrutiny over Nike's diversity policies.
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Oil prices surge amid fears of Middle East inflation and Wall Street slide
Investors were worried about inflation and the ongoing conflict in the Middle East. The three main U.S. indexes all fell on Tuesday, starting off the holiday-shortened work week in a negative note. In midday trading the Dow Jones Industrial Average fell 0.95%, the S&P 500 was down 0.33%, and the Nasdaq Composite dropped 0.12%. The MSCI index of global stocks was down by 0.37% last week. Oil prices rose after Houthis, backed by Iran, attacked Saudi energy facilities in Yemen. Brent crude oil rose 0.24% to a price of $97.23 per barrel, after reaching a six-week peak at $98.28 earlier in the day. U.S. crude oil rose by 0.93% to $92.33 per barrel. Inflation has risen in recent weeks and this is partly due to the increase in bond yields which have reached multi-year highs. This puts pressure on central banks to increase interest rates. The European Central Bank will raise the euro zone interest rates by a quarter-point on Thursday of this week. Meanwhile, the Bank of Japan is likely to do the same thing next week. This has put the yen in a position for its biggest rally in the past two years. Federal Reserve will also be reviewing its rates on September 16, issuing a statement. The U.S. data on inflation released by the Federal Reserve this Friday may be decisive for setting expectations about the outcome of its upcoming meeting. Money markets indicate that traders attach a 58% chance to a rate rise. The yen surge is a major concern for the global markets. Oil was the main topic of discussion on Tuesday. Due to its low yield, traders borrowed yen for the purpose of funding purchases of higher yielding assets, including currencies, bonds, and equities. This strategy is known as "carry trading". The yen gained 4% in the past week, the largest weekly gain since July 2024. On Tuesday it was trading at 154.23 and the dollar was slightly lower for the day. The dollar index (which measures the greenback in relation to a basket currencies including the yen and euro) rose by 0.04%, reaching 98.86. Copper, a commodity other than oil, hit a new record high price on Tuesday as the global supply was tightened. The metal continued to flow into the United States. Ahead of potential tariffs. The price of three-month copper at the?London Metal Exchange rose 1.5% to $14,728 per tonne. The benchmark 10-year Treasury note yielded 4.8% on the bond market. This is not far from their highest level since November 2023.
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Chevron will double the number of oil rigs in Venezuela to support its growth plan
Eimear Bonner, Chevron's Chief Financial Officer, said that the company will double the number of oil rigs in Venezuela as part of a five-year plan to increase production in the country. Last week, U.S. Oil Major announced that its joint venture partnership in Venezuela will invest more than $7 billion to double oil production to 600,000 barrels per day by 2031. The company has maintained its presence in Venezuela for years despite political turmoil. And the Trump administration has been urging oil companies to invest there following 'the removal of President Nicolas Maduro from power by U.S. troops. Bonner stated that Chevron expects the production to plateau between 600,000.00 and 700,000.00 bpd once the joint ventures reach 600,000.00 bpd. She said, "The large base of resources gives us the chance to extend this plateau for 5-10 years and that is just the initial recovery." There's more upside to be had." Bonner said that Chevron received a right to arbitration in international courts as part of the new contract terms signed last week. Other oil producers, such as?ExxonMobil or ConocoPhillips who left Venezuela in 2007 after their assets were nationalized, have cited the ability to'resolve any potential disputes through international arbitration courts'. They claim they still owe money.
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European shares tempered as oil rally fuels cautiousness; Novartis tumbles
Investors were cautious on Tuesday due to escalating tensions in the Middle East, and higher oil prices. Novartis also suffered its biggest one-day drop in history after reporting another setback in its drug development pipeline. The pan-European STOXX 600 fell 0.05% to 649.6. Novartis' 10.9% drop in the benchmark Swiss index weighed on the overall index, which fell by 1.6%. Novartis, the Swiss drugmaker, was the largest faller in the STOXX 600 index after it announced that its experimental treatment of a muscle-wasting condition had failed a late-stage study. News of the failure came just a day after Novartis revealed that its experimental cholesterol drug also failed in a closely-watched late-stage trial. Brent crude futures were hovering around $98 per barrel. Energy shares rose?0.6%. Oil prices increased after Houthi forces, who are aligned with Iran in Yemen, attacked Saudi Arabian cities and energy facilities. This highlights the danger that the conflict will spread across the region. Copper prices also rose, boosting mining stocks. Boliden Antofagasta KGHM all gained between 4.6% to 6.3% while the broader European Mining Index grew by 2%. German exports dropped unexpectedly in July. Weaker shipments to European Union and China highlighted the fragility of trade-driven growth in Europe's biggest economy. Focus on RISING RATE Bets The recent sell-off of global bonds has been attributed to the rising oil prices. This is also a factor in the expectation that central banks will need to continue to restrict their monetary policies. Investors expect that the European Central Bank will raise interest rates on Thursday by 25 basis points. Markets still expect another rate increase by the end of this year and in 2027, despite policymakers' limited appetite for tightening. "Any increases beyond September will move the policy away from the insurance end of the spectrum and into the restrictive side. This shift is still?not sufficiently supported by the data", ING analysts wrote in a recent note. Markets could also be underestimating the concerns over tightening and potential spillovers into European bond markets. The U.S. Inflation data is due this week. ?The inflation report follows a stronger-than-expected U.S. ?jobs reading that reinforced bets on another ?Federal Reserve rate hike this month. Kion Group, among other movers in the market, rose 6.8% following Citi's upgrade of the German forklift manufacturer to "buy" (from "neutral") citing a possible turning point in industrial-truck cycles.
Oil nears $100 after new Middle East attacks raise supply risk
The oil price rose for the 4th straight session, with a gain of more than $1 on early Wednesday trade.
Brent crude futures were up 1.4% to $99.33 per barrel at 0212 GMT. U.S. West Texas intermediate crude was $94.34 per barrel, an increase of 1.4%.
Brent crude prices jumped by 25% since early August, as the hopes of a permanent solution to the six-month old war faded and fighting flared up again. Prices are now fast approaching $100 per barrel.
The 'Middle East War' intensified Tuesday as Iranian-backed Houthis launched strikes against several Saudi cities, further entangling a U.S. ally in the conflict.
The?U.S. The?U.S.
Recent developments have only reinforced the idea that (peace) negotiations are still a long way off. The market will likely continue to price a significant risk premium in the interim," ING analysts wrote in a report.
The latest attacks could further disrupt?Middle East Oil Supplies, already stressed by strikes against?regional infrastructure? and key shipping lanes.
Analysts said that while Saudi Arabia has diverted exports from the Strait?Hormuz to other ports, sustained attacks against the kingdom would complicate efforts to keep crude flowing into global markets.
OCBC analysts in a recent note expressed concern about a possible prolonged oil supply disruption due to Iran's attack on Saudi energy facilities and the destruction of five Iranian tankers.
(source: Reuters)