Oil Prices Rebound Amid Hormuz Uncertainty

WTI and Brent crude oil prices rebounded sharply on Monday after Friday's pullback, following renewed uncertainty surrounding the Strait of Hormuz.

The delay in a planned meeting between Iran and Gulf Arab states in Oman has added to market concerns about supply disruptions. The Strait of Hormuz remains critical to global energy flows, with continued disruption or uncertainty around shipping potentially keeping crude prices elevated.

Higher oil prices could further complicate inflation, which remains above the Federal Reserve's target. August CPI increased 0.4% month over month, accelerating from July's 0.1% gain, while annual headline inflation remained at 3.4%. Core CPI rose 0.3% during the month and 2.4% from a year earlier.

The Federal Reserve's Wednesday meeting is now a major catalyst for financial markets, with rate-hike expectations having risen sharply following the latest inflation data. Higher oil prices could make the Fed's job even more difficult by adding fresh pressure to headline inflation.