Hong Kong (AFP) – Oil prices fell on Wednesday after President Donald Trump said US and Iranian representatives had met for “very good” talks at the United Nations. The international benchmark, Brent crude, and main US contract, West Texas Intermediate, dipped to $98.91 and $89.93 per barrel respectively in early Asian trade — well below the symbolic $100 mark they have smashed repeatedly since the Middle Eastern war broke out in February.
The three-hour meeting was “very good”, “very productive” and “they have another one scheduled in the very near future”, Trump told reporters as he met Ukrainian President Volodymyr Zelensky. Trump’s announcement came just hours after he delivered a bellicose address to the UN in which he said he faced a “big decision” on whether to make a deal with Iran or “annihilate the Islamic Republic and do it quickly”.
Nearly seven months after US-Israeli strikes on Tehran triggered the conflict, the foes remain at an impasse, with Iran keeping the Strait of Hormuz closed and the United States persisting with a counter-blockade of Iranian ports. A parallel conflict between Saudi-backed government forces and the Iran-backed Houthis in Yemen has enveloped the kingdom, squeezing energy exports from the Red Sea.
“The three-hour US-Iran meeting matters because it shifts the market from pure escalation pricing toward a genuine diplomatic process, even if a final deal still looks distant,” said Stephen Innes at Quintex Intel. Trump has pledged that oil would come down “as soon as” the United States wins the war. The dip in oil prices came as the world’s biggest crude exporter, Saudi Arabia, reportedly rebooted operations along its East-West Pipeline — a crucial oil export route shut down by the conflict rocking the Middle East.
Riyadh said this month that drones launched from Iraq had forced the closure of the pipeline, which it had increasingly used to bypass the lockdown of the Strait of Hormuz by Iran. The kingdom is aiming to resume exports later this week, Bloomberg quoted a source as saying. But while Saudi oil giant Aramco reportedly told Asian refiners they could soon pick up crude from the Red Sea port of Yanbu, the firm told their European counterparts that they will not be allocated oil in October, Bloomberg said.
– AI buzz –
Asian markets were mixed, with Taiwan’s Taiex index — home to chipmaking titan TSMC — up 0.8 percent following a renewed burst of confidence in artificial intelligence. Anthropic and OpenAI released new, cheaper AI models within hours of each other on Tuesday, days after the heads of both companies called for a slowdown in the development of the powerful technology. Anthropic’s release comes a few weeks before its expected stock market debut. OpenAI has delayed its IPO plans until next year.
Facebook owner Meta kicked off the AI buzz at the start of the week, surging 11 percent after its free AI agent Muse — which can book travel, send emails, and make purchases — topped download charts. Traders are also looking to Washington ahead of a summit on Thursday between Trump and China’s President Xi Jinping that is expected to focus on trade between the world’s two biggest economies. A simmering US-China trade war is a key concern, as both sides have maintained a tariff truce for nearly a year but have yet to secure a lasting agreement.
“But the higher impact issue will be the war in the Middle East and any support the US can extract from China to use its leverage to sway the Iranians,” said Kyle Rodda, senior financial market analyst at Capital.com. “Another high-powered issue will be artificial intelligence and the arms race evolving between the two economic and strategic competitors, following recent warnings from US tech leaders that the technology poses existential risks without stronger guardrails.”
– Key figures at around 0215 GMT –
West Texas Intermediate: DOWN 0.7 percent at $89.93 per barrel
Brent North Sea Crude: DOWN 0.3 percent at $98.91 per barrel
Hong Kong – Hang Seng Index: DOWN 0.9 percent at 24,864.97
Shanghai – Composite: DOWN 0.2 percent at 3,944.04
Tokyo – Nikkei 225: closed for a holiday
Dollar/yen: UP at 157.64 from 157.37 on Tuesday
Euro/dollar: DOWN at $1.1436 from $1.1451
Pound/dollar: DOWN at $1.3324 from $1.3344
Euro/pound: UP at 85.83 pence from 85.81 pence
© 2024 AFP
