Crude oil edges higher as investors monitor supply

Today’s headlines

What’s happening: Crude oil prices traded higher this morning as investors monitored developments in the Middle East.

What happened: Rising hostilities between Saudi Arabia and Yemen’s Houthis raised crude oil supply concerns.

Meanwhile, hopes of a diesel deal between the US and Russia limited the gains in oil prices, while investors awaited key supply data from the EIA.

Why it matters: Yemen’s Houthi militants announced an attack on state-owned energy company Saudi Aramco’s headquarters in eastern Saudi Arabia, which sparked a fire in part of the complex.

Houthis also attacked Riyadh’s main airport over the weekend, while a Saudi-led coalition announced a major offensive to reclaim rebel-controlled areas in Yemen.

Meanwhile, Iran increased attacks on tankers in the Strait of Hormuz, even as the US reported assisting safe transit of more than 19 million barrels of crude through the key waterway.

US President Donald Trump pushed back against criticism over a diesel deal with Russia, arguing that additional supply into the global market will help ease surging energy prices.

Russia was the world’s third-biggest crude oil producer behind the US and Saudi Arabia in 2025. Any agreement to end the ongoing conflict between the Russia and Ukraine could also allow increased energy supply.

Despite ongoing supply concerns through the Strait of Hormuz, oil producer group OPEC+ (Organization of the Petroleum Exporting Countries and its allies) recorded a sharp rise in production for September, following an increase from Saudi Arabia.

OPEC also lowered its forecast for the current year’s oil demand for the sixth month in a row, while increasing its outlook for 2027.

Weakness in the US dollar lent support to oil prices as a softer greenback makes commodities cheaper for foreign currency holders. The US dollar index, which measures the greenback’s performance versus a basket of major peers, edged lower to 102.17 this morning.

Spot price for WTI crude oil rose more than 0.1% to $93.99 per barrel, while Brent crude gained 0.1% to reach $104.88 per barrel this morning. Brent futures settled at its highest level since September 15 on Tuesday, while WTI crude closed at the highest level since September 24.

In other commodities trading, gasoline rose 0.1% to $3.2523, while natural gas climbed 1.1% to $3.318 and heating oil prices gained 0.7% to $4.9711 this morning.

What to watch: Investors will keep an eye on developments related to the US-Iran conflict.

The US Energy Information Administration’s data on crude oil stocks change will be released on Thursday. US crude inventories declined by 3.186 million barrels in the week ended October 2, recording the biggest contraction in five weeks, while natural gas stockpiles rose by 85 billion cubic feet. US gasoline inventories surged by 0.382 million barrels in the week ended October 2, notching the first gain in three weeks.

The markets today

US stocks in focus today ahead of some key earnings and inflation data

Context: US equity markets closed lower on Tuesday as investors digested mixed quarterly results from ‌big banks.

Details: Shares of Citigroup fell 5.6%, while Goldman Sachs slipped 0.2% despite both banks topping profit expectations for the latest quarter.

Wells Fargo’s shares declined 3.1% after the bank posted downbeat net interest income, while JPMorgan Chase’s stock slipped 0.9% following weaker-than-expected quarterly profit.

Analysts, on average, expect S&P 500 earnings to grow more than 30% in the third quarter, driven mainly by AI-related tech firms. The S&P 500 has surged 14% this year due to a boost in AI stocks.

Weakness in chip stocks also weighed on the Nasdaq 100. Shares of Micron Technology and Applied Materials settled lower on Tuesday.

Data released on Tuesday showed existing home sales in the US climbed by 1.5% to an annualised rate of 3.99 million units in September. The NFIB Small Business Optimism Index slipped to 97.9 in September, logging the weakest level in three months.

Most sectors on the S&P 500 closed lower, with healthcare and financial among the key losers. Energy and communication services stocks bucked the market trend, closing higher on Tuesday.

The Dow Jones index shed 180.45 points, or 0.35%, to close at 51,670.10 on Tuesday, while the S&P 500 slipped 0.02% to 7,805.45 and the Nasdaq 100 settled lower by 0.31% at 30,569.48.

What to watch: Investors will keep an eye on upcoming key earnings reports.

Data on US inflation rate (1630 UAE Time) will be released today. Analysts expect the annual inflation rate in the US to accelerate to 3.6% in September from 3.4% in each of the previous two months. Investors also await the US Fed Beige Book report (2200 UAE Time) today.

Other Markets: European indices closed lower on Tuesday, with the FTSE 100, DAX 40, CAC 40 and STOXX Europe 600 Index down by 0.06%, 0.07%, 0.07% and 0.10%, respectively.

The news shaping the markets

US President Donald Trump said he is committed to working with Russia and Ukraine to bring an end to the ongoing conflict. The news sent the USD/RUB forex pair higher in forex trading this morning.

Singapore’s economy expanded by 5.4% year-over-year in the third quarter, topping market estimates of 5% growth. However, this being a slowdown from the previous quarter’s 6.2% growth lent support to the USD/SGD forex pair.

New Zealand’s visitor arrivals jumped 8.0% year-over-year to 248,714 in August, following an 8.5% gain in the previous month, which sent the NZD/USD pair higher in forex trading this morning.

Saudi Arabia’s crude oil production surged by 2.134 million bpd to 8.372 million barrels in September, which exerted pressure on the USD/SAR forex pair.

Australia’s Westpac–Melbourne Institute leading economic index declined 0.1% in September, following a flat reading in the previous two months. However, the AUD/USD pair rose in forex trading this morning.

What else to watch today

• US MBA Mortgage Applications (1500 UAE Time)
• Canada’s Building Permits (1630 UAE Time)
• US Inflation Rate (1630 UAE Time)