Oil rose and Asian equities were lower as the spotlight returned to Middle East geopolitical developments after artificial-intelligence jitters eased.
Oil strengthened early Thursday amid concerns over a re-escalation of the Middle East conflict. Although President Trump has said that the U.S. won't attack Iran before U.S. midterm elections on Nov. 3, the U.S. military has been preparing a range of options to strike Iran, The Wall Street Journal reported, citing officials familiar with the planning. Two aircraft carrier strike groups are in the Middle East, with a third on the way from the Pacific.
Saudi Arabian authorities blamed Iran-backed Houthi militants for an attack on a civilian airport that resulted in casualties, as the U.S. said it ordered nonemergency U.S. government employees and their family members to leave Saudi Arabia in response to continuing threats from the Yemen-based group.
Separately, Saudi Arabia's energy ministry said on X that the country intercepted a drone that attempted to target Saudi Aramco's Shaybah oil field on Wednesday.
The Middle East disruption to oil supply continues to weigh on global inventories. The decline in U.S. crude oil stockpiles last week was sharper than expected at 3.1 million barrels, according to data released Wednesday by the U.S. Energy Information Administration.
Front-month WTI crude oil futures rose 0.9% to $98.02 a barrel, while front-month Brent crude oil futures gained 1.1% to $109.98 a barrel.
Oil prices will likely remain volatile, with sharp reactions to political developments, particularly as WTI prices hover near the psychologically significant $100 threshold, said Rania Gule, senior market analyst at XS.com.
Asian equities extended losses in early trading as investors digested Middle East developments and key tech earnings. Investors' risk appetite remains low and they likely took profit after a brief rebound in some markets on Wednesday.
South Korea's Kospi fell 2.1% and Japan's Nikkei Stock Average was down 1.0%. China's Shanghai Composite Index declined 0.9% and Hong Kong's Hang Seng Index shed 2.1%.
Meta's results overnight were in focus. While it reported a record third-quarter revenue and beat market expectations, its future funding plans for AI investments attracted scrutiny. "Investors will reward growth and monetization, yet they're also becoming more sensitive to how the next leg of investment is financed and what it means for existing shareholders," Pepperstone head of research Chris Weston said in a note.
Precious metals continued to tumble as higher oil prices fueled inflation concerns. Spot gold was down 0.6% at $4,114.73 a troy ounce and spot silver declined 1.1% to $57.31 a troy ounce.
Comments