Oil Rises as Supply Risks Offset Hopes for Russian Diesel Exports

Market Wrap-Up: Oil Rises; Markets Await US Inflation Data

Oil prices rose on Wednesday as traders assessed supply risks linked to fighting between Yemen's Iran-allied Houthis and Saudi Arabia, while expectations of increased Russian diesel exports limited the prospect of sharp price movements.

Brent crude futures gained 0.8% to $106.58 a barrel, while US West Texas Intermediate (WTI) crude futures rose 0.9% to $94.94. The gains followed mixed performance in the previous session, when Brent fell 0.9% and WTI advanced 0.4%. Hiroyuki Kikukawa, chief strategist at Nissan Securities Investment, said supply concerns linked to the conflict were supporting prices, while expectations of higher Russian diesel exports could ease market tightness.

Saudi Arabia's energy ministry said on Wednesday that the Houthis had attacked an administrative building belonging to state-owned oil company Saudi Aramco in Dhahran, causing a limited fire. Separately, OPEC reported that Saudi Arabia had increased oil production in the previous month despite shipment disruptions caused by the US-Iran war.

Gold prices edged lower on Tuesday as investors awaited US inflation data and remarks from Federal Reserve Chair Kevin Warsh. Spot gold fell 0.3% to $4,157.90 per ounce, while US gold futures for December delivery settled 0.3% lower at $4,177.30 per ounce.

Investors are preparing for the US Consumer Price Index (CPI) report on Wednesday and Producer Price Index (PPI) data on Thursday. Warsh's remarks are also expected to draw attention as market participants assess the monetary policy outlook. According to the CME FedWatch Tool, traders priced in a 19% probability of a Fed rate hike at the October meeting and an 88% probability of higher rates by December.

The US dollar and benchmark 10-year Treasury yields slipped from their respective highs. The dollar's retreat followed its advance to a fresh high on Monday, while the US Dollar Index (DXY) ended a two-day winning streak and moved towards 102.20 amid caution ahead of the CPI release. The 10-year Treasury yield also fell to its lowest level in more than a week.

US equities finished lower on Tuesday as chipmakers extended their losses and investors assessed quarterly results from major banks. The S&P 500 slipped 0.02% to 7,805.45, the Nasdaq Composite fell 0.15% to 27,204.38, and the Dow Jones Industrial Average declined 0.35% to 51,670.10.

The PHLX semiconductor index fell 0.23%, marking its fifth consecutive daily decline, amid concerns about rising competition from Chinese chipmakers. Meanwhile, analysts expected third-quarter S&P 500 earnings to increase by more than 30%, supported largely by AI-related technology companies.

Investor attention now turns to US inflation releases, Federal Reserve commentary, and weekly crude inventory data. These developments may provide further insight into the inflation outlook, interest-rate expectations, and the balance between oil supply risks and the prospect of increased Russian diesel exports.

WTI

Key Takeaways

·         Middle East supply risks support oil prices, while potential growth in Russian diesel exports could ease supply tightness.

·         The balance between geopolitical disruptions and additional supply remains central to the oil market outlook.

Technical Outlook

·         Daily Bias: Bullish

·         Support: 91.69

·         Resistance: 96.53

XAU/USD

Key Takeaways

·         Inflation data and Fed policy signals remain key drivers of gold's near-term direction.

·         Expectations of further interest-rate increases may weigh on demand for non-yielding assets such as gold.

Technical Outlook

·         Daily Bias: Bearish

·         Support: 4,144

·         Resistance: 4,200

Dow Jones

Key Takeaways

·         Strong earnings expectations may provide support for US equities, although inflation concerns and uncertainty over the Fed's policy outlook continue to weigh on sentiment.

·         Growing competition in the semiconductor sector remains a headwind for technology stocks.

Technical Outlook

·         Daily Bias: Bearish

·         Support: 51,593

·         Resistance: 52,363

Calendar Watch: 14 - 15 October 2026

• Consumer Price Index (CPI): Markets will assess inflation trends for clues about the Fed's policy outlook.
• MBA Mortgage Applications: The data will offer insight into mortgage demand and housing-market conditions.
• Federal Reserve Beige Book: Investors will assess economic activity, labour-market conditions, and inflation pressures.
• API Weekly Crude Oil Inventories: The report will provide an indication of US crude supply conditions and potential price pressures.
• Michelle Bowman and Thomas Barkin Speak: Investors will look for further signals on the Fed's policy outlook.
• Producer Price Index (PPI): Markets will assess producer-price trends for signs of underlying inflation pressures.
• Federal Reserve Chair Kevin Warsh Speaks: His remarks will be watched for clues about the Fed's monetary policy outlook.

Whether you are new to the markets or an experienced trader, stay connected to global markets with CPT Markets.

Access our trading platforms across multiple devices, with competitive spreads and fast execution.

This content is provided for informational purposes only and does not constitute investment advice, investment recommendations, or an offer or solicitation to buy or sell any financial instrument. Trading financial products such as Forex and CFDs involves a high level of risk and may not be suitable for all investors. You may lose all of your invested capital, and in certain circumstances, losses may exceed your initial deposit. Please ensure that you fully understand the risks involved and carefully consider your financial objectives, level of experience, and financial situation before trading.