Oil Prices Expected to Stay High

The International Energy Agency warned that the ongoing war in the Middle East means there is little chance of the oil market returning to normal conditions next year. IEA chief Fatih Birol said war is expected to keep prices high.

Crude oil prices climbed sharply, with West Texas Intermediate—the key US benchmark—rising over 5% as concerns about supply shortages intensified ahead of winter. The escalation in Iran and the Gulf, triggered by US and Israeli strikes in February, has propelled prices above $100 per barrel.

Speaking at a conference, Birol stated, ‘I don’t foresee a realistic scenario where 2027 marks a return to normalcy’ following disruptions in Gulf oil production. As part of the response, the IEA has coordinated the release of up to 400 million barrels from global strategic reserves.

Iran has vowed to take control of tanker shipments through the Strait of Hormuz, which has driven up transport insurance costs.

Oil Market Volatility

Damage to Gulf refining facilities has contributed to diesel reaching unprecedented levels.

The euro remained under pressure despite holding steady against the dollar, as protests over living costs disrupted economies in France and Italy. The yield on France’s 10-year government bond rose to 4.94%, more than 150 basis points above the comparable German government bond.

Tech companies faced heavy losses across Asian markets amid growing skepticism about AI-driven investments. Google disclosed that several Cloud services at its London data center were experiencing major outages, particularly affecting UK financial institutions.

Read Also: EU approves drone defense power for utility companies

South Korea’s Kospi and Japan’s Tokyo markets suffered further declines, with semiconductor leaders SK Hynix, Samsung, and Kioxia all declining sharply. The Kospi dropped nearly 4%, SK Hynix fell 4.2%, and Samsung’s shares lost 3% of their value.

Asian Markets

Data center operator Elice plummeted over 30% on its stock market debut, battered by AI-related concerns. Japan’s Nikkei 225 fell more than 1%, while Kioxia lost over 4% and SoftBank’s shares dropped 6%.

Taiwan’s TSMC also saw losses, though the Taiex index edged slightly upward. Declines were reported in Hong Kong, Sydney, Singapore, Bangkok, Wellington, and Manila. Investors are now focusing on upcoming earnings reports from major US tech firms, including Meta and Tesla.

Indonesia’s Jakarta Composite rebounded over 4% after a steep two-day plunge near 15%, fueled by hopes that regulators would take steps to prevent a downgrade by MSCI. Shanghai and Manila also saw gains, though broader market tensions persisted.

West Texas Intermediate was up 5.2% at $109.08 per barrel, and Brent crude was up 1.6% at $111.30 per barrel.

European markets endured a sluggish start against this volatile backdrop, with oil prices back above $110 per barrel, the highest level since May, also owing to Ukrainian attacks on Russian refineries. The Asia-Pacific Economic Cooperation (APEC) group holds a summit in the Chinese city of Shenzhen on November 18-19, where leaders from China, Russia, and the United States are expected to meet.