1. Oil prices increased following announcements by Russia and Saudi Arabia about extending cuts to oil supplies. Brent crude reached $90 per barrel for the first time in the year.
2. Russia extended its oil export cuts of 300,000 barrels per day until the end of the year, and Saudi Arabia maintained its production cut of 1 million barrels per day until year-end as well.
3. Higher oil prices resulted in gains for petroleum-linked US equities such as Chevron and Devon Energy, while most industrial sectors saw declines in the stock market.
4. There are concerns that higher oil prices could lead to a decline in demand, especially as consumers face high-interest rates designed to combat inflation.
5. Rising oil prices may complicate central banks’ efforts to lower inflation, and this trend is reflected in higher input prices, as seen in PMI (Purchasing Managers’ Index) numbers.
6. The eurozone’s PMI survey showed input cost inflation increasing for the first time in nearly a year, with services in the eurozone contracting to a 30-month low.
7. In Asian trading, sentiment was dampened by China’s Caixin Services PMI, which showed slower growth in the services sector in August.
8. Tock markets had mixed performances worldwide, with some indices in Europe and Asia closing lower, while the Nikkei 225 in Tokyo posted a small gain.
9. Currency exchange rates were also affected, with the Euro and Pound down against the Dollar, while the Dollar gained against the Yen.
10. West Texas Intermediate (WTI) crude oil prices rose to $86.69 per barrel, marking their highest close since mid-November.
These developments indicate that global financial markets are reacting to changes in oil prices and central banks’ efforts to manage inflation, which can have ripple effects on various sectors of the economy. ( Oil prices increased)