Today Fundamental Analysis: Brent Holds Around $100 Amid Fresh US-Iran Escalations

Oil prices rose sharply as escalating US-Iran tensions raised concerns over further disruptions to Middle East energy supplies, with West Texas Intermediate (WTI) up 1.9% to $94.80 and Brent gaining 1.7% to $99.64 after the US destroyed five Iranian crude tankers.
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Oil prices rose sharply as escalating US-Iran tensions raised concerns over further disruptions to Middle East energy supplies, with West Texas Intermediate (WTI) up 1.9% to $94.80 and Brent gaining 1.7% to $99.64 after the US destroyed five Iranian crude tankers.

In China, inflation data showed producer prices rising 3.8% year-on-year in August, above expectations of 3.6%, while consumer inflation rose 0.8% as expected, reflecting higher commodity costs and strong high-tech demand.

And in the US market, stock futures were mostly flat on Wednesday after Tuesday’s losses, as rising oil prices and higher Treasury yields weighed on sentiment. Investors are shifting their focus now to upcoming US inflation data, which will be key in shaping expectations for the Fed’s next interest-rate decision.

Gold is attempting to recover after three consecutive sessions of losses, with a weaker US dollar, partly driven by a stronger Japanese yen, providing some support and helping the metal regain a positive bias. However, expectations for tighter monetary policy from major central banks, including the Fed, ECB, and BoJ, are limiting gold’s upside as higher interest rates increase the opportunity cost of holding the non-yielding asset.

The Japanese yen is leading currency moves, with USD/JPY falling below 155 and approaching 153, driven primarily by expectations of a more hawkish Bank of Japan and potential shifts by Japan’s GPIF toward domestic assets.

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