Tokyo Wire
Brent crude oil prices paused in early trading on Tuesday after gaining in the previous session following a drone attack on an oil pipeline pumping station in Russia that reduced flows from Kazakhstan. Bloomberg Creative | Bloomberg Creative Photos | Getty Images
Iran's Revolutionary Guard claimed it has struck two U.S. vessels and a further eight oil tankers in the Gulf. This escalation comes in response to American military attacks on five Iranian crude oil tankers, which U.S. Central Command said it had destroyed on Tuesday. The strikes from both sides mark an escalation in military hostilities as the Trump administration continues its pressure on Tehran via economic sanctions.
Risk-off sentiment is evident as oil prices remain sharply higher. In early Wednesday trade, U.S. benchmark West Texas Intermediate futures for October delivery are holding around $94 a barrel, while Brent crude futures are within cents of $100 a barrel. Goldman Sachs' Daan Struyven noted that prices driving above $120 is definitely plausible.
Inflationary pressures are felt globally. Chinese wholesale inflation for August topped expectations due to rising commodity costs. Meanwhile, the Bank of England Governor Andrew Bailey warned that inflation risks are on the rise, citing higher energy prices. The negative sentiment is reflected in stock markets, with the Dow closing 600 points lower in back-to-back losses. Asian equities are mixed, while U.S. and European futures lack direction.
Additionally, LIV Golf has filed for Chapter 11 bankruptcy protection after Saudi Arabia's Public Investment Fund indicated it would pull funding, leaving the venture searching for new investment.
Source: CNBC
