Asian Markets Dip as Oil Rises on Saudi-Houthi Tensions

Asian markets saw slight declines on Wednesday, despite fresh highs in US stocks, as oil prices climbed amid rising tensions between Saudi Arabia and Yemen’s Iran-backed Houthis. The regional downturn followed a stronger performance in US equities, with the S&P 500 and Nasdaq Composite both reaching record highs. Meanwhile, Brent crude oil rose 1.05% to $90.38 per barrel, and US West Texas Intermediate (WTI) crude gained 1.06% to $101.65, driven by concerns over supply disruptions from a storm in the Gulf of Mexico and Houthi attacks on Saudi oil facilities.

Oil prices were further supported by reports that around 12 million barrels per day (bpd) of crude and 2 million bpd of refined products had recently left the Middle East on tankers, according to Vitol CEO Russell Hardy. The rise in oil prices came despite increased Middle East crude supplies, as traders weighed potential supply constraints from geopolitical tensions and natural disasters.

In bond markets, French debt saw a rebound after heavy selling, as far-right presidential candidate Marine Le Pen pledged spending cuts and a reduction in the country’s budget deficit. Ten-year French yields fell more than 11 basis points, narrowing the spread between French and German yields to 132 basis points. This helped stabilize the euro just above $1.1250. Meanwhile, US Treasury yields edged higher ahead of key bond auctions later in the week.

In currency markets, the US dollar index rose slightly to 101.94, while the yen weakened against the dollar. Gold prices also climbed, with spot gold trading higher at $4,165.53 per ounce. The Federal Reserve’s upcoming release of its September policy meeting minutes will be closely watched for clues on potential rate moves in the coming months.