Oil prices continued their strong momentum on Thursday, with Brent crude futures settling up $2.16, or 2.4%, at $93.78 per barrel, reaching the highest level since July 24. US West Texas Intermediate crude futures for September gained $2, or 2.3%, at $87.83 per barrel, also hitting their highest level since July 24. The benchmarks were on course for a second straight weekly gain, with Brent having risen more than 7% over the previous five sessions and WTI having advanced more than 8%. Both benchmarks had reached their highest levels since July 24 during the run of gains. The latest gains followed a more than 2% jump in oil prices on Thursday, when they settled at their highest in nearly a month, as reported by Business Standard.
US President Donald Trump threatened "economic warfare and isolation on an unprecedented scale" against Tehran, warning of consequences for any country providing "any type of lifeline to Iran". US Treasury Secretary Scott Bessent announced he would hold a press conference on Monday "to talk about exactly what we'll do." The escalation comes as the Iran war, which began on February 28 when the US and Israel launched military strikes on Iran, has stranded millions of barrels of Middle Eastern oil. Thousands of people have been killed in the conflict, with shipping traffic through the Strait of Hormuz on Wednesday remaining unchanged from the day before, far below pre-war levels when shipments equal to about one-fifth of global consumption moved through the waterway. This week, the United Arab Emirates suspended all financial and economic transactions with Iran until further notice, highlighting the fraught ties between major Gulf Arab oil producers and Tehran.
US equity futures indicate a cautious start on Friday, as crude oil prices surge above $94 per barrel amid escalating West Asia tensions. Dow Jones futures were down 0.1%, indicating a modest decline compared to the previous close. Nasdaq-100 futures also slipped 0.1%, while S&P 500 futures remained largely unchanged. The weakness comes after all three major indices ended Wednesday's session in the green, snapping a three-day losing streak after the US Treasury doubled its debt buyback programme. However, bond yields edged higher again on Thursday, with the 30-year Treasury yield rising 3 basis points to 5.2256%, as reported by LiveMint.
The technology sector faced significant selling pressure with SanDisk Corporation shares descending 9.01% to $1,625.76, while Nvidia declined 2.34% to $219.74, according to The Economic Times. Other major tech companies including Western Digital, Marvell Technology and Seagate Technology were down 7.43%, 7.82%, and 9.16% respectively. Among AI-linked chipmakers, Micron declined 7%, Sandisk crashed by 9%, Intel plunged by 7% and AMD fell by over 4%, as reported by Goodreturns. The chip stock retreat rattled markets and contributed to the broader market decline, as investors reassessed growth prospects amid rising interest rate concerns. Despite the tech sector weakness, some stocks managed to rise in the weak market, including Johnson & Johnson, Salesforce, Nike, The Coca Cola Company, Visa, Apple, Walmart, Thomson Reuters Corp, Netflix, Airbnb, Adobe and Eli Lilly and Company.
US stockpiles of distillate fuel, including diesel and heating oil, fell last week for a third straight week, according to the Energy Information Administration on Wednesday. However, crude inventories unexpectedly rose by 4.4 million barrels, as reported by Business Standard. The war has also impacted the supply of refined fuels and drawn down inventories, with less crude available to refiners. Oil trading advisor Ritterbusch and Associates noted that "For now, these new threats appear unlikely to sway Iran into relinquishing their primary source of leverage, that being control of the Strait, absent major concessions from the US." The advisory firm added that "So, the beat goes on with no resolution in sight that would spur a major decline in oil prices back to levels anywhere close to those prior to the war."
