EBC Markets Briefing | Crude market on a roll as US prepares for new attacks

Oil prices hit a fresh 5-month high on Friday as investors weighed possible progress ‌toward Russia-Ukraine talks against declining US oil stocks and a lack of US-Iran dialogue.

Russia declared its willingness to resume US-brokered negotiations with Ukraine next month after Putin hosted US special envoy Steve Witkoff in St Petersburg.

With high fuel costs fueling widespread public concern, Trump's approval numbers have hit rock bottom as polls suggest voters will penalize Republicans in the upcoming congressional elections.

Although Trump stated that the US will pause strikes on Iran until the election, official sources indicate that Tehran fully expects the bombing campaign to restart down the road.

By taking alternative routes to avoid the contested Strait of Hormuz and other chokepoints, shipping firms have successfully restored Middle Eastern oil exports to prewar levels.

US crude oil inventories fell for a third consecutive week in the week ended 16 October as production and imports declined, according to data released by the EIA.

EBC Financial Group analyst says Brent crude has broken the September peak. The lack of extreme exhaustion volume indicates that the trend is steady and not yet overly stretched into a blow-off top.

Asset Recap

As of market close on 22 October, among EBC major products, ProShares UltraPro Short QQQ led gains as the NASDAQ 100 tumbled on renewed concerns around spending by AI companies.

Accenture has risen for 12 straight sessions despite the board downturn. For an S&P 500 stock, this phenomenon is so rare it happens only once or twice every few decades.

Gold prices fell below $4,000. HSBC notes that bullion does not serve as a reliable hedge against equity drawdowns, though the currency debasement trade is expected to persist.

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EBC Financial Group Disclaimer: This material is for general information purposes only and is not intended as (and should not be considered to be) financial, investment or other advice on which reliance should be placed. No opinion given in the material constitutes a recommendation by EBC Global Financial Collaboration or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person.