Oil Flat; Fed Rate Decision in Focus — Market Talk

Brent crude oil futures traded around $63.7 per barrel on Monday, close to the highest level in more than two weeks amid mounting geopolitical risks that continue to threaten global supply.

Talks between the US and Russia last week failed to produce a breakthrough toward ending the war in Ukraine, keeping sanctions on Russian energy exports firmly in place.

This came amid continued Ukrainian strikes on Russian energy infrastructure.

Markets were also on alert for the possibility of a US military intervention in Venezuela, with Rystad Energy warning that any escalation could jeopardize the country’s 1.1 million bpd of oil output.

Additional support for prices came from expectations of a US interest rate cut this week, which could stimulate economic activity and bolster fuel demand.

Traders now look ahead to monthly market reports from both the EIA and OPEC+, due later this week, for further insights on supply-demand trends.

WTI crude oil futures traded around $60.1 per barrel on Monday, close to the highest level in more than two weeks amid mounting geopolitical risks that continue to threaten global supply.

Talks between the US and Russia last week failed to produce a breakthrough toward ending the war in Ukraine, keeping sanctions on Russian energy exports firmly in place.

This came amid continued Ukrainian strikes on Russian energy infrastructure.

Markets were also on alert for the possibility of a US military intervention in Venezuela, with Rystad Energy warning that any escalation could jeopardize the country’s 1.1 million bpd of oil output.

Additional support for prices came from expectations of a US interest rate cut this week, which could stimulate economic activity and bolster fuel demand.

Traders now look ahead to monthly market reports from both the EIA and OPEC+, due later this week, for further insights on supply-demand trends.

Gold rises in early Asian trade. A U.S. inflation indicator matched market expectations, supporting the case for a Federal Reserve rate cut later this week, say ANZ Research analysts in a note. The personal consumption expenditures deflator, widely seen as the Fed's preferred measure of inflation, held below 3% in September and indicated a moderate month-over-month increase in prices. Spot gold is up 0.2% at $4,204.41/oz. (megan.cheah@wsj.com)

The large-scale return of containterships to the Red Sea came a step closer with CMA CGM's announcement that its India America Express, or Indamex, service will start transiting the Suez Canal, Xeneta Chief Analyst Peter Sand writes. The first vessel scheduled to go through the canal will sail to New York from Karachi on Jan. 15. While carriers have tested Suez transits on a case-by-case basis since Houthi attacks on shipping were suspended, "CMA CGM's announcement this week is important because it is a structural change with a service proforma to transit Suez Canal on every sailing." ( mark.long@wsj.com )

By Evie Liu

The S&P 500 is set to undergo a quarterly rebalancing on Friday after the market closes. Investors are closely watching — and some are speculating — what changes will be made to the index.

Alnylam Pharmaceuticals, Ares Management, CRH, and Vertiv Holdings are likely to join the benchmark index, according to KBW analyst Shreyank Gandhi, Barron's previously reported . Other possible additions to the index include Carvana, Cheniere Energy, Coupang, Ferguson Enterprises, SoFi Technologies, and Strategy, according to Gandhi.

Any changes to the index usually takes about 5 trading days before they become effective, because index funds need a short window to rebalance their portfolios without blowing up liquidity.

The S&P 500 index is rebalanced each quarter, with new companies added if they meet the criteria of S&P Dow Jones Indices, which oversees the index. The admission committee looks at factors such as market value, profitability, and sector representation.

Andrew Bary contributed to this report.

Write to Evie Liu at evie.liu@barrons.com

This content was created by Barron's, which is operated by Dow Jones & Co. Barron's is published independently from Dow Jones Newswires and The Wall Street Journal.

Natural gas futures climb over 9% for the week, as cold temperatures moved through the U.S., increasing the demand as more consumers run their heaters. What also is underpinning stronger natural gas futures is the demand for U.S. exports, says Capital Economics in a note. "The increase in U.S. natural gas prices has come alongside a surge in LNG exports, with record high volumes of feedgas flowing into export terminals," says the firm. In 2025, U.S. LNG exports have jumped to roughly 15 billion cubic meters. For today, natural gas rose 4.5% to $5.289 per mmbtu. (kirk.maltais@wsj.com)