Oil Holds Below $90 as Markets Weigh Mixed Signals

By Dow Jones Newswires Staff

Oil prices nudged higher in early European trade but held below $90 a barrel as traders weigh an array of mixed signals.

A Wall Street Journal report that the International Energy Agency proposed a record release of oil reserves sparked optimism, but the sustained shipping bottleneck in the Strait of Hormuz and conflicting messages from the Trump administration put a bottom on prices. French President Emmanuel Macron will host a call of G-7 leaders later Wednesday to discuss the energy crisis caused by the Middle East conflict, his office said.

U.S. futures hovered around par in volatile trade after Oracle's earnings gave investor sentiment around artificial-intelligence a boost. The dollar traded flat while Treasury yields edged higher ahead of a U.S. consumer inflation print for February due Wednesday. Economists polled by the WSJ expect inflation to hold steady from January's print at 2.4%.

--In early trading, Brent crude rose 0.7% to $88.45 a barrel, while WTI was up 1.5% to $80.65 a barrel. Officials familiar with the IEA's proposed intervention said the oil release would exceed the 182 million barrels of oil that IEA member countries put onto the market in two rounds when Russia invaded Ukraine in 2022. Oil fell sharply on Tuesday amid shifting comments from the Trump administration about shipping through the Strait of Hormuz. President Trump warned Iran against mining the waterway, while Energy Secretary Chris Wright said, and later deleted, a post on X that the U.S. Navy had escorted an oil tanker through the strait.

European natural-gas prices rose after Tuesday's pullback, as Qatar's liquefied natural gas halt is expected to have far-reaching effects on global markets over the coming months. In early trading, the benchmark Dutch TTF front-month contract rose 3.2% to 48.91 euros a megawatt-hour.

--U.S. futures for the S&P 500 were flat, while the Dow Jones Industrial Average slid 0.2%. The tech-heavy Nasdaq also struggled for direction premarket, though shares in Oracle surged over 10% in after-hours trade. The cloud-computing provider raised its sales outlook on surging AI demand, calming investor fears of a slowdown in AI-related growth.

--Asian stocks were largely higher at Wednesday's close. Taiwan led the region, with the FTSE TW50 climbing 4.4% as chip and electronics stocks bounced back, while South Korea's Kospi and Japan's Nikkei 225 each rose 1.4%. Utilities and basic-materials stocks pushed the Nikkei higher, while technology stocks also gained. In Korea, AI bellwethers SK Hynix and Samsung Electronics both rose above 1%.

Equities in mainland Shanghai closed 0.3% higher, while Shenzhen and ChiNext finished up 0.5% and 1.3%, respectively. Hong Kong's Hang Seng nudged down 0.2%, however, as healthcare and real-estate stocks weighed on the index.

--European stocks fell back into the red at the opening bell as industrials and defense companies lead blue-chip indexes down. After staging a strong recovery Tuesday, the industrials-heavy DAX index slid 1.2% in Germany, with Rheinmetall falling 4.3% as newly reported profits disappointed investors. Miners and real-estate stocks pushed London's FTSE 100 0.7% lower.

In Paris, the CAC 40 slipped 0.6% as luxury names that dominate the index fell. Defense group Leonardo was down 2.2% in Italy, as the FTSE MIB declined 0.8%. The Spanish IBEX 35 traded flat, as a sharp rise for index heavyweight Inditex--up 3.4% after earnings--countered early slides for banks and healthcare stocks

--The dollar traded steady after earlier falling on a drop in oil prices following Wright's quickly deleted social-media post. U.S. CPI data for February, due at 1230 GMT, will help shape dollar trade. "This is a key print, as the recent oil shock has pushed back market expectations for the next Federal Reserve rate cut," Deutsche Bank analysts said in a note. The DXY dollar index traded flat at 98.825.

--Treasury yields rose in overnight trade, albeit only modestly as oil prices remained the key driver. As well as watching for inflation data, investors will monitor the U.S. Treasury's $39 billion auction of 10-year notes. The 10-year yield was up 0.8 basis point at 4.143%, while the 30-year yield rose 1.1 basis points to 4.782%, according to Tradeweb.

Eurozone government bond yields rose, moving in line with Treasurys. A further drop in energy prices could take away the chance of European Central Bank interest-rate hikes, pulling two-year rates lower again, ING's Michiel Tukker and Benjamin Schroeder said in a note.

--Bitcoin fell 0.8% to $69,660, back below the key $70,000 level as uncertainty over the Iran war keeps investors cautious over risky assets.

--Gold prices slid in early trading but remained above the $5,200 mark as investors grappled with mixed messages over the Middle East conflict. Bullion gained in the previous session, boosted by a softer dollar and falling oil prices that eased inflation concerns. However, "the developments continue to obscure the outlook for interest-rate cuts in the U.S.," analysts at ANZ said. "This has seen investors withdraw increasing amounts of gold from ETFs."

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(END) Dow Jones Newswires

03-11-26 0536ET