Brent crude has climbed past $102 a barrel as the Middle East conflict escalates, and HSBC has raised its price forecast in response. The move is pulling Treasury yields higher too, with the 10-year note touching its highest level since 2023 as investors price in a longer inflation shock.
Brent crude pushed past $102 per barrel as fighting in the Middle East intensified, and HSBC responded by raising its oil price forecast. According to Crypto Briefing, the move marks the first time Brent has topped $100 since late May.
Brent and WTI both push higher
In European trading, Brent rose more than 1% to above $102 as Middle East tensions kept supply disruptions in focus. WTI crude also climbed 1.5% to $97.50. Separately, investingLive reported that Brent closed above $100 on Wednesday for the first time since July. S&P Global reported Dated Brent jumped to $114.26 on September 9, underscoring how tight the physical market has become.
The Strait of Hormuz risk
The escalation of the Iran war has raised the risk of further disruption through the Strait of Hormuz, a waterway that normally carries roughly a fifth of global oil and gas supplies. As buyers compete for alternative barrels, physical oil prices have surged alongside futures.
Yields climb as inflation fears build
Higher crude feeds directly into gasoline, transportation and production costs, so investors are demanding more compensation for holding long-dated bonds. The 10-year Treasury yield climbed to 4.867%, its highest level since 2023. The 5% mark is firmly in traders' sights ahead of the US CPI report. According to investingLive: "For now, oil is the signal. Everything else is just noise."
A Treasury plan to repurchase up to $6 billion of longer-dated debt disappointed traders who had expected a larger buyback, and did little to slow the rise in yields. Central bank tightening or an end to the Iran war are the only routes out, investingLive noted, since the buyback cannot make $100 crude oil disappear.
Sources: Crypto Briefing, Investinglive, Investinglive
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