Oil Rises To $105/b As Trump Comments Roil Energy Markets

Benchmark oil prices topped $105 a barrel Monday after Yemen’s Iran-backed Houthi movement launched strikes on Saudi Arabia, heightening worries about tight global supplies heading into the northern hemisphere winter.

Doubts surrounding US President Donald Trump’s claim of an “energy ceasefire” between Ukraine and Russia, following his surprise announcement of a deal to buy diesel from Moscow, further unsettled investors.

After a mixed showing for stocks across Asia, Europe’s main indices rose in midday deals, with the car sector lifted by the European Union’s announcement that it will cap imports of hybrid vehicles from China in a bid to avert a trade war.

The dollar was higher against most currencies ahead of key US inflation data this week, which will be pored over for clues on when the Federal Reserve will likely raise interest rates once more in a bid to tame elevated inflation.

“Oil remains well bid above $100 after strikes on Saudi Arabia’s Riyadh airport over the weekend, whilst efforts to secure a Russia-Ukraine energy truce were muddy,” said Neil Wilson, a strategist at Saxo UK.

Meanwhile, “a US deal to purchase some Russian diesel is a drop in the ocean”, he added.

Russia on Monday refused to say whether an agreement had been reached with Ukraine to halt attacks on energy infrastructure, a day after Trump sowed confusion with his unilateral announcement that an “energy ceasefire” had been reached.

Trump also called for Ukraine to “get a new leader” after Volodymyr Zelensky slammed Washington’s easing of Russian diesel sanctions, as Trump grapples with high fuel prices weeks before midterm elections in the world’s biggest economy.

Saudi Arabia’s energy minister acknowledged meanwhile that the kingdom’s infrastructure and resilience had been tested following a wave of deadly attacks by Yemen’s Houthis.

The weekend strikes marked a sharp escalation in the Yemen war, where Saudi Arabia has long supported the internationally recognised government.

Also in view this week for markets is the start of the corporate earnings season, with US banking giants JP Morgan, Goldman Sachs and Bank of America due to report.

Tech giants will follow later in October and November, with traders keen to get an idea of the outlook for the AI sector as it invests vast sums despite growing concerns over the technology.

Microsoft co-founder Bill Gates warned Sunday that unregulated artificial intelligence posed a growing threat and predicted an escalation in AI-powered cyberattacks in the coming year.

He said that while the risk of AI “getting out of control” remained years away, the immediate concern was “bad people” using existing systems without safeguards.

“The front that we’ll probably see most dramatically in the next year is cyberattacks,” Gates told ABC News.

Key Figures At Around 1045 GMT

Brent North Sea crude: UP 0.8 per cent at $105.60 per barrel

West Texas Intermediate: UP 0.9 per cent at $92.69 per barrel

London – FTSE 100: UP 0.6 per cent at 10,618.90 points

Paris – CAC 40: UP 0.2 per cent at 7,819.84

Frankfurt – DAX: UP 0.7 per cent at 25,257.51

Hong Kong – Hang Seng Index: UP 0.3 per cent at 24,271.20 (close)

Shanghai – Composite: DOWN 0.4 per cent at 3,794.60 (close)

Tokyo – Nikkei 225: Closed for a holiday

New York – Dow: UP 0.8 per cent at 51,654.95 (close)

Euro/dollar: DOWN at $1.1184 from $1.1203 on Friday

Pound/dollar: DOWN at $1.3235 from $1.3240

Dollar/yen: UP at 158.62 yen from 158.27 yen

Euro/pound: DOWN at 84.52 pence from 84.62 pence

AFP