Brent Crude Breaks $100 as Middle East Tensions Fuel Oil Price Surge
The Brent crude oil price has broken above $100 per barrel for the first time since July 24, driven by escalating tensions in the Middle East. Iran's missile attack on a US base in Jordan and subsequent attacks on vessels have raised concerns about oil supplies from the region.
The surge in oil prices coincided with a rise in yields on benchmark US 10-year notes to their highest level since November 2023, as the Treasury Department announced it would buy up to $6 billion in 10-to-20-year government bonds. The move was seen as an attempt to support longer-duration bonds amid inflation concerns.
Stock markets globally were lower due to the Middle East turmoil and looming central bank decisions. The Dow Jones Industrial Average, S&P 500, and Nasdaq Composite all fell in midday trading, with MSCI's gauge of global stocks down 0.42%.
Lukman Otunuga, head of market research at FXTM, warned that the prolonged oil shock could keep price pressures elevated and complicate central banks' policy environment. The euro edged higher ahead of the European Central Bank's policy decision on Thursday, while the yen strengthened towards a nearly seven-month high against the dollar.