Oil prices tick down after hitting 7-wk high.
Oil prices edged lower in Asian trading on Thursday after hitting seven-week highs, as a surprise decline in U.S. crude inventories added to signs of tighter supply, while heightened geopolitical tensions over Russia kept a risk premium in the market.
Both benchmarks jumped over 2% to a seven-week high in the previous session after the U.S. Energy Information Administration (EIA) released its weekly data.
US crude stockpiles drop unexpectedly – EIA
Data from the U.S. Energy Information Administration (EIA) showed crude inventories fell by 607,000 barrels in the week to Sept. 19, confounding analysts who had forecast a build of around 800,000 barrels.
Gasoline stocks declined by 1.1 million barrels to 216.6 million. Distillate fuel inventories, which include diesel and heating oil, fell by 1.7 million barrels to 123 million.
Asian stock rally pauses for breath.
Asian shares took a breather from their recent rally on Thursday as investors searched for fresh catalysts, while the yen came under some heavy selling pressure, particularly against the euro and Swiss franc.
Oil prices slipped, after surging over 2% overnight to seven-week peaks as a surprise drop in U.S. crude inventories added to supply worries amid export issues in Iraq, Venezuela and Russia.
European stocks are set for a subdued open, with EUROSTOXX 50 futures off 0.1%. S&P 500 futures and Nasdaq futures were flat ahead of a lineup of Federal Reserve officials, whose remarks will be closely watched for their views on interest rates.
San Francisco Fed President Mary Daly said further rate cuts will likely be needed but the timing remained unclear. Earlier in the week, Fed Chair Jerome Powell had struck a cautious tone about further rate cuts, after the central bank delivered the first easing this year just last week.MSCI’s broadest index of Asia-Pacific shares outside Japan slipped 0.1%, having rallied over 5% for the month and 9% for the quarter. Japan’s Nikkei rose 0.2%, after jumping 7% for the month and 13% for the quarter.
Currencies muted as traders await economic data.
The U.S. dollar was steady on Thursday as traders weighed the prospect of a measured Fed easing cycle following a cautious tone from policymakers while awaiting economic data that may outline the impact of tariffs and the outlook for rates.
Traders have priced in 43 basis points of rate cuts in the remaining two meetings this year although comments from officials including Federal Reserve Chair Jerome Powell indicate that a lot will depend on the upcoming economic data.
The lack of clarity and consensus on future easing has meant traders are no longer fully pricing in a cut next month. The dollar has edged higher since the Fed lowered interest rates last week, as expected.
The euro last bought $1.1752, 0.12% higher Asian hours after dropping 0.6% in the previous session. Sterling was at $1.3464 after also slipping 0.6% on Wednesday.
The dollar index, which measures the U.S. currency against six other units, eased a touch to 97.744, but hovered near its highest level since September 11 it touched overnight.
The index is on the cusp of eking out a gain for the month, although the greenback has been on the back foot for much of the year against major peers and is down nearly 10% in 2025.
Vasu Menon, managing director of investment strategy at OCBC Bank, said there are concerns that if U.S. growth turns out to be stronger than expected, the Fed may not cut as many times in 2026 as the futures market is suggesting currently.
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