International oil prices are on track for their longest run of declines since before the outbreak of Middle East conflict, following the first US-Iran talks in June. During Asian afternoon trading on Wednesday, Brent crude slipped 0.8% to $98.43 per barrel, positioning the benchmark for a sixth consecutive daily drop, which would mark the longest losing streak since August last year. Simultaneously, US crude prices fell below $90 per barrel, with a cumulative decline of more than 10% over the past five trading sessions.
Tuesday's downward movement in oil was driven by signals from Saudi Arabia indicating readiness to restart the key east-west pipeline, resuming crude exports from the Red Sea coast. A chart of Brent crude prices (in US dollars per barrel) illustrates the commodity's six-day slide. The retreat in oil prices contributed to new record highs on Wall Street this week, as investor optimism regarding artificial intelligence development prospects persisted, with the Nasdaq 100 Index reaching an all-time high on Tuesday.
According to Chi-lo Lam, Deputy Chief Investment Officer for Asia-Pacific at BNP Paribas Wealth Management, the decline in oil prices has only slightly reduced market expectations for a Federal Reserve rate hike in October, with the probability currently standing at 53%. She noted that "the market believes oil prices will find it difficult to sustain any downward trend if the US-Iran conflict remains unresolved, as tensions could easily escalate again."
Global bond markets remained steady on Wednesday, with the 10-year US Treasury yield edging up 0.01 percentage points to 4.96%. Higher energy prices had previously fueled inflation concerns, pushing global bond yields upward. This week, Chicago Fed President Austan Goolsbee cautioned that if the current inflation uptick is driven by factors more persistent than an oil price shock, the Federal Reserve would need to respond with forceful, front-loaded policy measures.
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