Oil Prices Plummet, Asian Stocks Rise on Hopes for Middle East Deal
Asian stock markets rebounded on Wednesday after oil prices plummeted by over 2 percent on Tuesday, driven by hopes of an eventual deal to end the US-Iran war and reopen the Strait of Hormuz. The sharp fall in crude prices also led to a release of more oil from US emergency reserves.
According to Chris Weston of Pepperstone, 'reported oil supply and flows are moving back towards pre-conflict levels,' which has driven a strong repricing in crude. Brent crude rose 0.7 percent to $103.29 per barrel, while West Texas Intermediate (WTI) climbed 0.3 percent to $89.65 per barrel.
However, the surge in oil prices earlier this month had fueled inflation worries and put pressure on central banks to raise interest rates. The yield on 30-year US Treasuries has topped 5.6 percent, a 24-year high, while the benchmark 10-year yield is above 5.2 percent.
Investors are awaiting personal consumption expenditures (PCE) data, the Federal Reserve's preferred inflation gauge, which could weigh on its policy meeting at the end of October.