UOB Global Economics & Markets Research reported that oil prices continued to hold near multi-year highs, with WTI crude settling at $90.42 per barrel, up 1.2%, and Brent at $103.53 per barrel, up 0.9% on Wednesday [1]. These elevated prices reflect strong year-to-date gains, driven by ongoing uncertainty surrounding Middle East supply, despite crude flows reportedly nearing pre-war levels. However, fuel supplies, particularly gasoline, have not recovered as quickly as crude flows, contributing to the sustained strength in oil prices [1].
The close of the third quarter on Wednesday (30 September) was marked by turbulence in broader financial markets. The S&P 500 index fell 0.25% to 7,651.54, recording its worst monthly performance since June, while the Dow Jones Industrial Average dropped 0.86% to 50,906.05 [1]. This suggests that elevated oil prices and supply concerns may be weighing on investor sentiment and contributing to broader market volatility.
UOB's analysis highlights that the persistence of Middle East supply uncertainty, even as crude flows approach pre-war levels, is a key factor supporting oil prices. The lag in fuel supply recovery, especially gasoline, remains a concern for market participants [1].
CONCLUSION
Oil prices are holding firm near multi-year highs, supported by ongoing Middle East supply uncertainty and lagging fuel supply recovery. The elevated prices appear to be contributing to broader market volatility, as evidenced by declines in major equity indices. Investors remain cautious as supply dynamics continue to influence both energy and financial markets.