Oil settles flat amid OPEC+ output hike, supply glut fears

HOUSTON – Oil prices steadied on Tuesday as investors weighed a smaller-than-expected increase to OPEC+ output in November against signs of a potential supply glut.

Brent crude futures settled down 2 cents, or 0.03%, to USD 65.45 a barrel. US West Texas Intermediate crude was up 4 cents, or 0.06%, to USD 61.73.

Both contracts settled more than 1% up in the previous session after the Organization of the Petroleum Exporting Countries plus Russia and some smaller producers, together known as OPEC+, decided to increase collective oil production by 137,000 barrels per day, starting in November.

The move was in contrast to market expectations for a more aggressive increase, a sign that the group remains cautious in light of predictions for a global supply surplus in the fourth quarter as well as next year, said ING analysts.

Market sentiment remains subdued, in particular after Saudi Arabia opted to keep the official selling price of its flagship crude to Asia unchanged, defying analyst expectations for an increase, StoneX analyst Alex Hodes said in a note on Tuesday. The Abu Dhabi National Oil Company has set the November official selling price of its benchmark Murban crude at USD 70.22 a barrel, it said on Tuesday, up from October’s OSP of USD 70.10.

On the demand side, India’s fuel demand rose 7% year-on-year in September, according to data from the Petroleum Planning and Analysis Cell of the country’s Oil Ministry.

On the supply side, US oil production is expected to hit a record of 13.53 million bpd this year, up from a prior forecast of 13.44 million bpd, the Energy Information Administration said on Tuesday.

Global oil inventories are also expected to rise through next year as non-OPEC+ countries lead oil output growth, according to the EIA, putting significant downward pressure on commodity prices in the months ahead.

JPMorgan said global oil inventories, including crude stored on water, have risen every week in September, adding 123 million barrels during the month.

In the US, crude stocks rose while gasoline and distillate inventories fell last week, market sources said, citing American Petroleum Institute figures on Tuesday.

Crude stocks rose by 2.78 million barrels in the week ended October 3, the sources said on condition of anonymity.

Gasoline inventories fell by 1.25 million barrels, while distillate inventories dropped by 1.82 million barrels, the sources said.

China is building oil reserve sites at a rapid clip as part of a campaign to boost stockpiles, according to public data, traders, and industry experts.

Geopolitical factors have kept a floor under prices, with conflict between Russia and Ukraine affecting energy assets and creating uncertainty over Russian crude supply.

Russia’s Kirishi oil refinery halted its most productive distillation unit after a drone attack and subsequent fire on October 4, with recovery likely to take about a month, two industry sources said on Monday.

(Reporting by Georgina McCartney in Houston, Enes Tunagur and Robert Harvey in London, Anjana Anil in Bengaluru, and Siyi Liu in Singapore; Editing by Clarence Fernandez, David Goodman, Rod Nickel, Nia Williams, and Deepa Babington)

Gold notches fresh high on safe-haven demand, Fed rate-cut bets

Gold prices rose to an all-time high on Tuesday, extending gains to a third session on US economic and political uncertainties and expectations of further interest rate cuts by the Federal Reserve.

FUNDAMENTALS

* Spot gold held its ground at USD 3,961.64 per ounce, as of 0055 GMT, after hitting a fresh high of USD 3,977.19 earlier in the session.

* US gold futures for December delivery gained 0.2% to USD 3,985.50.

* The White House on Monday backed off President Donald Trump’s assertion that government employees were already being laid off due to the shutdown, but warned job losses could result as the standoff looked set to stretch into a seventh day.

* Kansas City Fed Bank President Jeff Schmid signaled he is disinclined to cut interest rates further, arguing that as the Fed navigates between the twin risks of overly tight and overly easy policy, it should stay focused on the danger of too-high inflation.

* However, markets are pricing in an additional 25-basis-point rate cuts in both October and December, with probabilities of 95% and 83%, respectively, according to the CME FedWatch tool

* Non-yielding gold thrives in a low-interest-rate environment and during economic uncertainties.

* Gold has climbed 51% so far this year on strong central bank buying, increased demand for gold-backed Exchange-Traded Fund (ETFs), a weaker dollar and growing interest from retail investors seeking a hedge amid rising trade and geopolitical tensions.

* SPDR Gold Trust GLD, the world’s largest gold-backed exchange-traded fund, said its holdings fell 0.17% to 1,013.16 metric tons on Monday from 1,014.88 tons on Friday.

* Elsewhere, spot silver eased 0.4% to USD 48.32 per ounce, platinum fell 0.8% to USD 1,612.85 and palladium lost 0.3% to USD 1,315.86.

(Reporting by Brijesh Patel in Bengaluru; Editing by Subhranshu Sahu)

Japan’s Nikkei hits record high as chip-related stocks track US peers

By Junko Fujita

TOKYO, Oct 7 (Reuters) – Japan’s Nikkei share average hit a record high on Tuesday as chip-related stocks advanced to track their U.S. peers, but the index pared gains as enthusiasm toward a new leader of the nation’s ruling party retreated.

As of 0044 GMT, the Nikkei .N225 was up 0.3% at 48,075.52, after hitting a record high of 48,527.33 earlier in the sesion.

The broader Topix .TOPX edged up 0.14% at 3,230.82.

The Nikkei rallied for a third straight session on Monday, and crossed the 48,000 level for the first time, after Sanae Takaichi was all but confirmed to become the country’s next premier, stoking bets on a revival in big spending and loose monetary policy.

“Investors continued to buy stocks on expectations for Takaichi’s policy today, but the market did not have the momentum it had in the previous session,” said Yugo Tsuboi, chief strategist at Daiwa Securities.

“Shares are not rising in a broad rally, with half of the stocks falling.”

Chip-testing equipment maker Advantest 6857.T rose 1.34%, while SoftBank Group 9984.T, an investor in artificial intelligence-related firms, rose 0.96% to track its U.S. peers.

Overnight, the S&P 500 .SPX and the Nasdaq .IXIC reached record closing highs on Monday, as AI-related dealmaking boosted investor sentiment even as the U.S. government shutdown extended through its sixth day.

Chip-making equipment maker Tokyo Electron 8035.T reversed gains to fall 0.36%.

Of more than 1,600 stocks trading on the Tokyo Stock Exchange’s prime market, 52% fell, 42% rose and 5% traded flat.

(Reporting by Junko Fujita; Editing by Rashmi Aich)

((junko.fujita@thomsonreuters.com;))

Oil steady as market chews over OPEC+ output hike, supply glut fear

By Anjana Anil

Oct 7 (Reuters) – Oil prices were steady on Tuesday, with sentiment toward a smaller-than-anticipated OPEC+ output hike dulled by weakening global demand and the potential for a supply glut.

Brent crude futures LCOc1 gained 1 cent, or 0.02%, to $65.48 a barrel by 0014 GMT. U.S. West Texas Intermediate crude CLc1 was unchanged at $61.69 a barrel.

Both contracts settled more than 1% higher in the previous session.

“Crude oil prices gained after OPEC announced a smaller than expected production rise. The oil market has been anticipating a large rise in quotas for the group’s members as they met to discuss their supply agreement over the weekend,” ANZ analyst Daniel Hynes wrote in a note to clients.

“This staved off fears of an even bigger surplus than the one the market is anticipating in coming months.”

On Sunday, the Organization of the Petroleum Exporting Countries plus Russia and some smaller producers – known as OPEC+ – decided to increase its collective oil production by 137,000 barrels per day starting in November.

The group has increased its oil output targets by more than 2.7 million bpd this year, equating to about 2.5% of global demand.

Geopolitical factors have kept a floor under prices, with conflict between Russia and Ukraine impacting energy assets and creating uncertainty over Russian crude supply.

Russia’s Kirishi oil refinery halted its most productive distillation unit, CDU-6, following a drone attack and subsequent fire on October 4, with its recovery likely to take about a month, two industry sources said on Monday.

Still, oil prices have come under pressure as investors see a likelihood of a supply surplus as output increases from both OPEC+ and non-OPEC+ producers. Moreover, any slowdown in demand due to weak economic growth triggered by U.S. trade tariffs is likely to exacerbate the surplus, analysts said.

(Reporting by Anjana Anil in Bengaluru; Editing by Christopher Cushing)

((Anjana.Anil@thomsonreuters.com;))

Gold sails past USD 3,900/oz for first time on safe-haven bids

Gold surged past the USD 3,900-an-ounce level for the first time on Monday, driven by safe-haven demand following a fall in the yen and a US government shutdown, while growing expectations of additional Federal Reserve rate cuts also lent support.

Spot gold was up 0.9% at USD 3,922.28 per ounce by 0208 GMT, after hitting an all-time high of USD 3,924.39 earlier in the session. US gold futures for December delivery gained 1% to USD 3,947.30.

“Yen weakness on the back of the Japanese LDP elections has left investors with one less safe-haven asset to go to, and gold was able to capitalize,” said KCM Trade Chief Market Analyst Tim Waterer.

“The enduring US government shutdown means that a cloud of uncertainty still hangs over the US economy and the potential size of any GDP impact.”

Gold is a go-to asset for investors under these circumstances, particularly with the Fed expected to cut rates further this month, Waterer said.

The yen tumbled against the US dollar by the most in five months after fiscal dove Sanae Takaichi was elected to lead the ruling party and become the next prime minister.

The Trump administration will start mass layoffs of federal workers if US President Donald Trump decides negotiations with congressional Democrats to end a partial government shutdown are “absolutely going nowhere,” a senior White House official said on Sunday.

Fed Governor Stephen Miran pressed for an aggressive rate cut trajectory again on Friday, citing the impact of Trump administration’s economic policies.

Gold has climbed 49% so far this year after a 27% rise in 2024, helped by strong central bank buying, increased demand for gold-backed exchange-traded funds, a weaker dollar and growing interest from retail investors seeking a hedge amid rising trade and geopolitical tensions.

The rally found fresh support last month after the Fed cut rates by a quarter of a percentage point and indicated it would steadily lower borrowing costs for the rest of the year.

According to the CME FedWatch tool, investors are pricing in additional 25-basis-point cuts in both October and December, with probabilities of 95% and 83%, respectively.

Non-yielding gold thrives in a low interest rate environment and during economic uncertainties.

Spot gold broke the USD 3,000-per-ounce level for the first time in March and USD 3,700 in mid-September. Many brokerages have turned bullish on the rally.

Elsewhere, spot silver climbed 0.8% to USD 48.33 per ounce, platinum rose 1.1% to USD 1,621.90, and palladium gained 0.8% to USD 1,270.25.

(Reporting by Brijesh Patel and Anushree Mukherjee in Bengaluru; Editing by Sumana Nandy and Subhranshu Sahu)

Politics jolts markets as Japan stocks soar 4%, bitcoin leaps to record high with gold

TOKYO – Japanese stocks surged more than 4% to an all-time high while the yen skidded on Monday after fiscal and monetary dove Sanae Takaichi was elected as leader of the ruling party, putting her on course to become the nation’s first female prime minister.

Gold climbed to a record peak above USD 3,900, while leading cryptocurrency bitcoin rallied to a lifetime high on Sunday, with investors increasingly turning to alternative assets as a store of value as the US government shutdown frayed nerves.

Japan’s Nikkei soared as much as 4.3% to an unprecedented 47,734.04 in the first 15 minutes of trading after Takaichi bested the more moderate Shinjiro Koizumi in the Liberal Democratic Party’s leadership vote on Saturday, stoking expectations for fiscal stimulus.

The yen slumped 1.6% to the cusp of 150 per US dollar while short-dated Japanese government bond yields slid to a two-week low as traders pared back bets on when the Bank of Japan will resume raising interest rates.

Market-implied odds of a BOJ hike by year-end fell to 41% from 68% on Friday.

A year ago, Takaichi criticized the BOJ’s decision to raise rates as “stupid”, although her recent rhetoric has been more restrained, saying only that central bank policy should be aligned with the government.

“We believe concerns among some investors that the next administration might pursue extreme fiscal expansion or exert political pressure on the BOJ are overblown,” Morgan Stanley MUFG Securities economists wrote in a research report, noting that Takaichi’s stance “appears closely aligned” with BOJ Governor Kazuo Ueda’s “cautious approach” to policy normalization.

Most other major share markets around the region were closed for holidays, including mainland China, South Korea, and Taiwan.

Hong Kong’s Hang Seng declined 0.3%, ahead of a holiday on Tuesday. Australia’s benchmark eased 0.1%, though trading was thinned by holidays in several states, including New South Wales and Queensland.

US S&P 500 futures pointed 0.2% higher, after the cash index rose to a record high on Friday.

The US dollar made up some ground on European currencies, capitalizing on its momentum against the yen to rebound from last week’s 0.5% decline against a basket of major peers.

The euro lost 0.25% to USD 1.1714, and sterling slipped 0.23% to USD 1.34385.

Gold last changed hands around USD 3,904 after advancing as much as 0.9% earlier to a record USD 3,919.59.

Bitcoin traded around USD 123,590 following its jump to USD 125,653.32 on Sunday.

“The shutdown matters this time around,” said Geoffrey Kendrick, head of digital assets research at Standard Chartered Bank.

“This year, bitcoin has traded with ‘US government risks,’ as best shown by its relationship to (the) US Treasury term premium,” he added.

“I suspect bitcoin will rise throughout the shutdown,” and will soon reach USD 135,000, Kendrick predicted.

Oil prices rose after OPEC+ announced on Sunday it would increase production by 137,000 barrels per day (bpd) from November, the same modest monthly increase as in October, amid persistent concerns over a looming supply glut.

In the run-up to the meeting, sources said Russia was advocating for an output increase of 137,000 bpd to avoid pressuring prices, but Saudi Arabia would have preferred double, triple or even quadruple that figure to regain market share more quickly.

Brent crude futures rose 1.3% to USD 65.39 a barrel, while US West Texas Intermediate crude was at USD 61.71, up by 1.4%.

(Reporting by Kevin Buckland)

Wall Street eyes Washington standoff with stocks near records

NEW YORK – The US government shutdown tops investors’ agenda next week as markets head into the seasonally strong fourth quarter, with equities near record highs bracing for an earnings-season test later this month.

A deep partisan rift in Washington led to a federal government shutdown that risks delaying crucial economic data and could potentially muddy the Federal Reserve’s policy-easing outlook.

Few on Wall Street expect the Washington impasse to derail a rally that has lifted the S&P 500 by 14% to repeated record highs, but with little in the way of major data or earnings, the Capitol Hill drama is set to dominate investor focus.

“The shutdown and the potential reopening … that’s going to get almost all investor attention,” said Mark Hackett, chief market strategist at Nationwide.

Investors’ main worry is that the shutdown will suspend the flow of timely economic data.

Should the data drought last several weeks, it could cause confusion about the Fed’s monetary policy path, as the central bank will be without government data that helps guide its decisions. It also poses a possible drag on economic growth the longer it extends.

But for now, there is little reason to panic, investors said.

BULLS IN CHARGE

Despite some softness in labor data, the US economy has borne the onslaught of trade and tariff headlines well and corporate earnings have supported stocks’ march higher.

Analysts as of Thursday expected earnings from S&P 500 companies to increase 8.8% in the third quarter from a year ago, up from forecasts of 8.0% growth at the start of July, according to LSEG data.

“In my opinion, lack of data actually puts more burden of proof on bears than it does on bulls,” Hackett said.

Investors will get a taste of the upcoming earnings season, with Levi Strauss and Delta Air Lines set to report results on Thursday.

“The most likely scenario is the market’s just kind of calm … moving sideways during the shutdown,” Hackett said.

KEY Advisors Wealth Management CEO Eddie Ghabour, who sees the shutdown possibly stretching for two to four weeks, echoed the sentiment.

“If we’re right on the shutdown stretching out, if you get extra stimulus in the economy in the form of two more rate cuts, and then the government is back in business, you’re going to see a huge re-acceleration of growth in the economy and the equity markets,” Ghabour said.

Investors will get a read on what Fed policymakers were thinking when they cut rates in September when the minutes of that meeting are released on Wednesday.

SEASONALLY STRONG

For stock bulls, it helps that the just-started fourth quarter is historically the S&P 500’s strongest, with an average gain of about 2.9% and a high share of positive returns, according to LSEG data going back to 1928.

“Despite headline risks and the potential for short-term volatility, the weight of the evidence continues to support a constructive stance,” Keith Lerner, co-chief investment officer at Truist Advisory Services, said in a note on Thursday.

“As always, we will continue to follow the weight of the evidence.”

Meanwhile, the market’s strong momentum has stock bears in hibernation. The S&P 500 logged its 30th record closing high of the year on Thursday.

“The shutdown is going to be the news, but I think the underlying backdrop is really three things, seasonality, which is positive, the tailwind of rate cuts to protect the labor market … and we have momentum in the markets,” said Sonu Varghese, global macro strategist at Carson Group.

“We’ve been overweight equities and we are continuing to be that,” he said.

(Reporting by Saqib Iqbal Ahmed; Additional reporting by Laura Matthews; Editing by Alden Bentley and Jamie Freed)

Oil on track for steepest weekly plunge in 3-1/2 months

Oil prices rose slightly on Friday after four straight sessions of declines but were on track for their steepest weekly decline since late June due to market expectations that the OPEC+ group could hike output further despite oversupply concerns.

Brent crude futures gained 18 cents, or 0.3%, to USD 64.29 a barrel by 0000 GMT. US West Texas Intermediate crude climbed by 19 cents, or 0.3%, to USD 60.67 a barrel.

If prices do not further recover in this session, Brent could close at the lowest level since the week ended May 30, while WTI would finish at a level not seen since May 2.

On a weekly basis, Brent has plunged 8.3%, while WTI is 7.6% lower.

OPEC+ could agree to raise oil production by up to 500,000 barrels per day in November, triple the increase for October, as Saudi Arabia seeks to reclaim market share, sources told Reuters this week.

“If OPEC+ do go ahead and announce a 500,000 bpd increase this weekend, it’s likely a big enough increase to send crude oil lower again, initially to support at USD 58.00, before a test of this year’s lows USD 55.00 area,” said Tony Sycamore, an analyst at IG.

Potentially higher OPEC+ supply, slowing global crude refinery runs due to maintenance and a seasonal dip in demand in the months ahead are set to accelerate oil stock builds in the US and elsewhere, analysts say.

The Energy Information Administration said on Wednesday that US crude oil, gasoline and distillate inventories rose last week as refining activity and demand softened.

“Concerns that a US government shutdown will curtail economic activity and the resumption of Iraq’s Kurdish oil exports is also weighing on the crude price,” Sycamore said.

The Group of Seven nations’ finance ministers said on Wednesday they will take steps to increase pressure on Russia by targeting those who are continuing to boost purchases of Russian oil.

(Reporting by Sudarshan Varadhan; Editing by Jamie Freed)

Dollar rebounds, uncertainty reigns as US government stays shut

The dollar gained against the euro and yen on Thursday, with the greenback rebounding against the Japanese currency after four consecutive days of losses, as traders weighed the impact of a US government shutdown.

The shutdown leaves a gap in government data, including the closely watched monthly jobs report for September that was due to be released on Friday.

Still, with Federal Reserve and private data continuing to be released, the void may not be as bad as feared, said Marc Chandler, chief market strategist at Bannockburn Global Forex in New York.

“That really misunderstands how the markets have evolved with private sector data,” Chandler said. “I don’t think that either the market nor the Fed is flying blind.”

A Chicago Fed report on Thursday, which combines private and available public data, estimated the September jobless rate was 4.3%, the same as in August and evidence that a feared rapid rise in unemployment had not yet begun.

But details of the report, along with other data, pointed to ongoing sluggishness in the labor market.

The dollar fell on Wednesday after the ADP National Employment report showed private payrolls decreased by 32,000 in September, boosting expectations that the Federal Reserve will cut interest rates two more times this year.

But the currency retraced that move on Thursday.

“A lot of people thought that with the government closing, the dollar would sell off. And I think that people got caught leaning the wrong way, and now are being forced out of positions,” Chandler said.

The dollar index was last up 0.13% on the day at 97.86. The euro fell 0.09% to USD 1.1719.

Traders see a 25-basis-point cut at the Fed’s October meeting as almost certain and are pricing in a 90% probability of an additional cut in December, according to the CME Group’s FedWatch Tool.

Dallas Fed President Lorie Logan on Thursday said the US central bank appropriately cut rates last month to guard against the risk of a sharp deterioration in the job market, but said that so far the cooling has been gradual and signaled she is not eager to cut rates further.

Against the Japanese yen, the dollar strengthened 0.08% to 147.17.

Traders are watching this weekend’s election to lead Japan’s ruling party for signs on how fiscal policy will influence the currency.

Sterling GBP= weakened 0.25% to USD 1.3443. Traders have started to assess the impact the UK November budget will have on the economy and sterling.

“In the UK there’s a focus on the fiscal situation,” said Eric Theoret, FX strategist at Scotiabank in Toronto.

In cryptocurrencies, bitcoin gained 2.24% to USD 120,218.

(Reporting by Karen Brettell, additional reporting by Joice Alves; Editing by Mark Potter, Gareth Jones, Emelia Sithole-Matarise and Deepa Babington)

Gold rallies to record high on US government shutdown and Fed rate cut bets

Gold prices surged to a record high on Wednesday, lifted by a weaker dollar and safe-haven demand after a US government shutdown, while softer jobs data reinforced expectations that the Federal Reserve will cut interest rates this month.

Spot gold was up 0.1% at USD 3,861.77 an ounce at 01:48 p.m. ET (1748 GMT) after touching a record peak of USD 3,895.09.

US gold futures for December delivery settled 0.6% higher at USD 3,897.5.

The dollar weakened against a basket of other leading currencies, making dollar-priced gold more affordable for overseas buyers.

“The dollar has been under pressure because, usually, when the government shuts down, the mood turns quite negative on the US,” said Marex analyst Edward Meir, adding that the dollar and US equity markets are among the casualties.

The soft ADP jobs report will not help the dollar, he said, noting how a slowing economy and lower interest rates are bullish for gold.

US private payrolls decreased by 32,000 jobs in September after a downwardly revised 3,000 decline in August. Economists polled by Reuters had forecast private employment increasing 50,000 after a previously reported 54,000 advance in August.

The US government has shut down large parts of its operations, potentially putting thousands of federal jobs at risk, after partisan divisions prevented Congress and the White House from reaching a funding deal.

The shutdown could delay the release of economic indicators, including the closely watched non-farm payrolls (NFP) report scheduled for Friday.

Non-yielding gold, viewed as a safe-haven asset in times of economic and geopolitical uncertainty, thrives when interest rates are low.

Investors are pricing in a 99% chance of a rate cut this month, the CME FedWatch Tool shows.

“We are now seeing increased appetite from Western investors, both institutional and retail, as a case of ‘FOMO’ kicks in … Should this trend continue, we would not be surprised to see gold prices break above USD 4,000/oz,” SP Angel analysts said in a note.

Among other precious metals, spot silver gained 1.6% to a more-than-14-year high of USD 47.42 an ounce, platinum lost 1.6% to USD 1,549.17, and palladium was down 1.1% at USD 1,243.31.

(Reporting by Noel John and John Biju in Bengaluru; Editing by David Goodman and Sahal Muhammed)

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