Key facts
- Oil prices fell on conflicting reports of increased Middle East supply.
- Saudi oil exports recovered to over 4 million barrels per day in September.
- US military escorted ships through the Strait of Hormuz with transponders off.
- Japanese authorities conducted rate checks in the currency market, causing the yen to jump.
- US President Donald Trump will meet Chinese President Xi Jinping on Thursday.
Oil prices dipped on Thursday amid conflicting reports about increased supply from the Middle East, with some data suggesting a recovery while US military assessments were difficult to confirm. Brent crude slipped 2% on hopes Saudi Arabia would quickly restore flows through its East-West pipeline, after initially rising on news of Houthi attacks on the kingdom over the weekend.
Admiral Brad Cooper, head of US Central Command, said over the weekend that the volume of crude oil, cargo, and liquefied natural gas in the past two weeks was higher than at any point in the past six months. However, ships were being escorted by the US military while running the Strait of Hormuz with their transponders off, making it hard to confirm Cooper's assessment. Shipping data showed just 12 commodity vessels transited the Strait of Hormuz on Saturday and Sunday, down from 35 during the previous weekend.
Figures from analytics firm Kpler did show exports from Saudi Arabia had recovered to just over 4 million barrels per day (bpd) so far in September after slumping to 2.4 million bpd in August, the lowest since at least 2013. Analysts at JPMorgan said satellite data indicated Saudi oil moving through the Strait of Hormuz averaged 2.9 million bpd over the past six days, up from just 700,000 bpd in August.
The drop in oil prices helped lift most share markets, though liquidity was light with Japan on a three-day break. Tech led South Korea up more than 1%, while Nasdaq futures added 0.6% and S&P 500 futures 0.4%. European share futures also nudged higher, with no sign as yet of any drag from news that Chancellor Friedrich Merz's mainstream conservative party had suffered its worst election results since 1949. The euro was also steady at $1.1484, while the dollar drifted under 157.00 yen amid concerns the Bank of Japan might take advantage of the lack of liquidity to intervene in support of its currency. The yen jumped on Friday after Japanese authorities conducted rate checks in the currency market, the Nikkei newspaper reported.
It is also set to be a busy week for diplomacy with US President Donald Trump attending the United Nations General Assembly, ahead of a meeting with Chinese President Xi Jinping on Thursday. Treasury Secretary Scott Bessent and Chinese Vice Premier He Lifeng concluded talks in New York on Sunday with the US side proposing a new AI safety notification mechanism.