Oil Prices Fall Amid Middle East Peace Talks and Rising US Inventories

Economic

Commodity

Summary:

Oil prices saw a slight dip as traders shifted their focus to the easing of tensions in the Middle East and the growing stockpiles in the United States. Brent crude dropped below $66 per barrel after a previous rise of over 1%, while West Texas Intermediate hovered around $62. ...

The latest developments in the Middle East, including an agreement between Israel and Hamas for the release of hostages, brought a sense of optimism, signaling a potential reduction in the region's geopolitical risks. US President Donald Trump mentioned that a visit to Israel could be imminent, further supporting the peace process.

Middle East Peace Plan and US Crude Inventories

The breakthrough in the peace talks, mediated by the US and Qatar, has sparked hopes of calming the two-year war between Israel and Hamas. However, concerns remain as crude prices are still under pressure due to factors outside the Middle East.

In the US, crude stockpiles increased for the second consecutive week, adding more supply to the market. Despite this, the levels of oil stored in Cushing, Oklahoma, declined, alongside a drop in refined product inventories, signaling a possible shift in the supply chain dynamics.

Geopolitical and Supply Factors Impacting the Oil Market

While the Middle East conflict is a major concern for global oil supply, the increasing supply from OPEC and other producing nations such as those in the Americas is adding to the pressure. Geopolitical factors outside the Middle East, particularly Ukrainian attacks on Russian oil infrastructure, are also influencing global oil flows.

Despite the expectations for a surplus in the oil market in the coming months, analysts are divided on how deeply prices will fall. Goldman Sachs, among others, predicts a future average price of $56 per barrel for Brent crude next year as global production is expected to outpace demand. Citigroup, however, suggests that the oil market's outlook could be tempered by non-OPEC+ growth and risks from large producers like Russia and Iran.

Overall, the oil market remains under significant pressure, with a potential surplus of global supply set to keep prices subdued. However, geopolitical risks, such as the situation in Russia and Iran, continue to complicate the forecast. While some analysts expect a downturn in prices, others believe the pace of decline may be slower due to these uncertainties.

Source: Bloomberg

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Daily News

[Quick Facts]

1. U.S. Senate fails again to pass Government Funding Bill to end shutdown.

2. Gaza Ceasefire Talks continue, Hamas demands "International Guarantees" for implementation.

3. German government raises 2025 economic growth forecast, expects faster growth next year.

4. Trump claims Israel and Hamas have agreed to the "first phase" of a peace deal.

5. Fed Minutes: Further rate cuts expected this year, tariffs to keep inflation high.

6. Canadian rents fall for the 12th consecutive month.

[News Details]

U.S. Senate fails again to pass Government Funding Bill to end shutdown

The U.S. Senate failed to pass government funding bills, pushing the Trump administration's shutdown into its second week. Around 12:50 p.m. Eastern Time, a Democrat-backed bill failed with a vote of 47-52. Shortly afterward, a Republican version was put to a vote. In the previous five votes, these closely contested stopgap measures had all failed. Democrats are pushing for any funding bill to include health care provisions, particularly an extension of Obamacare subsidies set to expire at the end of the year.

Gaza Ceasefire Talks continue, Hamas demands "International Guarantees" for implementation

On the 8th, a new round of Gaza ceasefire negotiations between the Palestinian Islamic Resistance Movement (Hamas) and Israel continued in Sharm El-Sheikh, Egypt. According to media outlets such as Al Jazeera, Hamas presented several demands during the previous day's talks: first, Israel must completely end its occupation of Gaza, which must be guaranteed internationally; second, the release of Israeli hostages must be tied to the full withdrawal of Israeli forces. The Israeli government has not yet commented on the progress of the negotiations.

The day before, Hamas chief negotiator Khalil al-Hayya said in an interview with Cairo News Channel that the Hamas delegation’s goal in coming to Egypt was clear: to immediately stop the conflict, ensure Israel’s withdrawal from Gaza, and reach a deal for the exchange of hostages. He emphasized that Israel must completely end its occupation of Gaza, which must be "genuinely guaranteed" by the ceasefire mediators.

German government raises 2025 economic growth forecast, expects faster growth next year

According to updated government projections, Germany's economy is expected to grow modestly by 0.2% this year, but with hundreds of billions of euros in fiscal stimulus, growth is forecast to accelerate to 1.3% in 2026. The latest semi-annual forecast released by German Economy Minister Katherina Reiche on Wednesday is slightly more optimistic than the previous government's April outlook and aligns with projections from major German economic research institutes. Reiche acknowledged that much of the growth in the coming years will come from a surge in government spending, but she warned that the effectiveness of stimulus measures "depends on whether investments can be quickly implemented."

Trump claims Israel and Hamas have agreed to the "first phase" of a peace deal

U.S. President Donald Trump announced on social media on the evening of the 8th that Israel and Hamas have agreed to the "first phase" of a peace deal. "This means that ALL of the Hostages will be released very soon, and Israel will withdraw their Troops to an agreed upon line as the first steps toward a Strong, Durable, and Everlasting Peace," Trump wrote on social media.

"Everybody will be treated fairly," said Trump. He also thanked Qatar, Egypt, and Turkey as mediators, saying their representatives worked with the U.S. to make this historic event possible. Cairo News Channel later reported that Egyptian, Qatari, and other mediator representatives announced that a new round of Gaza ceasefire negotiations had reached an agreement covering all terms and implementation mechanisms of the first phase of the ceasefire, confirming that the final version of the agreement is currently being drafted.

Hamas and the Israeli Prime Minister's Office each issued statements confirming the agreement. According to earlier reports from The Times of Israel, citing multiple negotiation insiders, the main hurdles in Gaza ceasefire talks have been resolved, with only procedural matters remaining. Israel and Hamas are expected to sign the agreement on the 9th, with Israeli hostages likely to be released on the 11th.

Fed Minutes: Further rate cuts expected this year, tariffs to keep inflation high

On October 8th, the Federal Reserve released the minutes of its September meeting, showing that the decision to cut the benchmark interest rate by 25 basis points was supported by the vast majority of committee members. The sole dissent came from new Governor Stephen Miran, who advocated for a larger 50-basis-point cut, citing "labor market conditions had softened", and core inflation is now significantly close to its "2 percent objective."

Participants noted that, in these circumstances, if policy were eased too much or too soon and inflation continued to be elevated, then longer-term inflation expectations could become unanchored and make restoring price stability even more challenging. By contrast, if policy rates were kept too high for too long, then unemployment could rise unnecessarily, and the economy could slow sharply.

Tariff increases were still expected to raise inflation this year and to provide some further upward pressure on inflation in 2026. Inflation was projected to decline in 2026, to reach 2 percent in 2027. However, the staff continued to view the uncertainty around the projection as elevated, primarily reflecting uncertainty regarding changes to economic policies, including those for trade, immigration, fiscal spending, and regulation, and their associated economic effects.

Participants noted that the low level of estimated job gains over recent months likely reflected declines in growth of both labor supply and labor demand. With regard to the outlook for the labor market, participants generally expected that, under appropriate monetary policy, labor market conditions would be little changed or would soften modestly.

Canadian rents fall for the 12th consecutive month

Canadian rents declined year-over-year in September, partly due to a weakening job market. Detailed data from real estate firm Urbanation showed that upward pressure on inflation is easing, providing some relief to the Bank of Canada, which may consider further rate cuts. Urbanation reported that asking rents fell 3.2% in September, marking the 12th consecutive month of year-over-year declines. The drop in September was attributed to increased rental supply, immigration restrictions, and a weak labor market. Data showed that Canadian rents are 1.2% lower than they were two years ago. However, Urbanation noted that average rents over the past three months have remained relatively flat.

[Today's Focus]

UTC+8 15:00 Speech by ECB Governing Council Member François Villeroy de Galhau

UTC+8 16:30 Speech by BOE Monetary Policy Committee Member Catherine Mann

UTC+8 18:00 Speech by ECB Governing Council Member José Luis Escrivá

UTC+8 19:30 September Monetary Policy Meeting Minutes from the ECB

UTC+8 20:30 Speech by Federal Reserve Chair Jerome Powell

UTC+8 20:35 Speech by Federal Reserve Governor Michelle Bowman

UTC+8 (The Next Day) 00:45 Speech by Federal Reserve Governor Michael Barr on the Economic Outlook

Risk Warnings and Disclaimers

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Samantha Luan

Cryptocurrency

Forex

Economic

Key takeaways:

● Solana ETFs and ETPs recorded $706 million in weekly inflows, outpacing XRP’s $219 million, per CoinShares.

● SOL funding rates stayed below the 6% neutral level, signaling reduced appetite for leveraged bullish positions among traders.

Solana’s native token, SOL, climbed back to $229 on Tuesday after briefly dipping to $218. The move came as investors responded positively to the US Federal Reserve’s release of minutes from its Sept. 17 meeting, which reaffirmed expectations of additional interest rate cuts in 2025.Traders remain optimistic that SOL could advance toward the $300 mark, a target that appears realistic given the strong bullish sentiment reflected in derivatives metrics and onchain data.

Blockchains ranked by 7-day fees. Source: Nansen

Solana recorded a 22% increase in seven-day network fees, driven by rising activity across decentralized exchanges (DEXs). Meanwhile, its main rival by deposits, Ethereum, saw the opposite trend, with network revenue falling 21% during the same period. Solana continues to dominate in transaction count, surpassing the combined total of Ethereum and its layer-2 ecosystem.

Weekly Solana DEX (left) and perpetual (right) volumes, USD. Source: DefiLlama

DEX volumes on Pump rose 78% over the past seven days, followed by a 73% increase on Meteora and a 46% rise on Raydium. Solana regained its leading position in decentralized exchange activity, posting $129 billion in 30-day volume and surpassing Ethereum’s $114 billion, according to DefiLlama data. Notably, the fastest-growing rival, Hyperliquid, has stalled at around $31 billion.

Solana network activity increases

Network fees remain a key element for any blockchain focused on decentralized applications, particularly when the revenue helps offset inflationary pressures. Unless the system is centralized, maintaining validators incurs costs, and staking participants expect a reasonable return. In short, weak network activity discourages holding the native token and can trigger sell pressure.

Solana’s total value locked (TVL) rose 8% in 30 days, supporting further growth in network fees. Standout performers included a 20% rise in Kamino deposits, 12% in Drift, and 12% in Orca. By comparison, Ethereum’s TVL increased 3% over the same period, while Tron deposits grew 6%. As a result, Solana has solidified its position as the second-largest network, with $14.2 billion in TVL, representing an 8% market share.

The rapid surge in activity on the perpetual futures trading platform Aster has redirected traders’ focus toward BNB Chain, following a wave of memecoins that soared 150% or more within seven days. As a result, even though SOL’s price rose 3% during the same period, BNB’s remarkable 28% rally weighed on sentiment among Solana ecosystem investors.

Top 7-day performances of BNB Chain tokens, USD. Source: Cryptorank.io

Rising inflows to SOL ETPs signal increasing institutional demand

Data from SOL perpetual futures provides insight into whether traders have lost confidence after the failed attempt to break above $250 on Sept. 18. Many SOL holders are likely frustrated, especially as some rival tokens have recently reached new all-time highs, including BNB at $1,357 on Tuesday and Mantle at $2.81 on Wednesday.

SOL perpetual futures funding rate, annualized. Source: laevitas.ch

The funding rate on SOL perpetual futures has remained below the 6% neutral threshold, signaling weak demand for bullish leveraged positions. This cautious stance among traders may be partly attributed to the growing traction of competing blockchains, which have drawn attention away from Solana despite record weekly inflows into its exchange-traded products.

CoinShares reported that Solana ETFs and ETPs attracted $706 million in inflows during the seven days ending Sept. 5, far surpassing the $219 million recorded by XRP instruments. Investors now anticipate that the US Securities and Exchange Commission will approve multiple spot Solana ETFs on Friday, a development that could drive additional institutional inflows and potentially push SOL’s price beyond $300.

Source: CryptoSlate

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Gerik

Economic

Commodity

As of now, gold is on track for its best year since 1979, when runaway inflation drove investors toward safe-haven assets. Despite its remarkable rally, analysts are divided on how much further it can climb, with some forecasting even higher prices in the short-term.

Goldman Sachs: A Continued Surge with 22% Growth Expected by 2026

Goldman Sachs has set a bullish outlook for gold, raising its price target to $4,900 per ounce by December 2026. This would represent a 20% increase over the next year. The investment bank's optimistic view is driven by strong central bank demand, with purchases expected to average 80 metric tons in 2025 and 70 metric tons in 2026.

Additionally, the bank predicts that Western investors will continue driving inflows into gold ETFs, bolstered by the Federal Reserve's anticipated rate cuts. These factors are expected to support gold's upward trajectory for the foreseeable future.

HSBC: Limited Upside with Potential for a Moderation in 2026

HSBC’s forecast is more conservative. The bank sees gold trading within a range of $3,600 to $4,400 per ounce in 2026, implying an 8% increase from its current levels. Geopolitical uncertainties and concerns over the Fed’s independence are expected to maintain upward pressure on prices in the near term.

However, HSBC analysts caution that as the rally matures, factors such as increased supply and reduced physical demand could lead to price moderation in the second half of 2026. In the long term, the bank projects prices will ease slightly to around $3,950 in 2026 and further decline to $3,600 by 2027.

Bank of America: Potential Resistance at $4,000, But $5,000 Is Still Within Reach

Bank of America has pointed out signs that gold's momentum might be weakening, noting that the metal has been up for seven consecutive weeks and is currently trading 21% above its 200-day moving average.

Historical patterns suggest that gold might face resistance around the $4,000 mark, but there is also the possibility of a surge to $5,000 before encountering further challenges. The bank draws comparisons to the 2015-2020 period when gold experienced a dramatic 85% rally before correcting.

Ed Yardeni: Long-Term Bullish Outlook with a Potential $10,000 Price Target by 2030

Ed Yardeni, president of Yardeni Research, presents a highly optimistic view of gold’s future, predicting that the metal could reach $5,000 by the end of 2026 and potentially surge to $10,000 by the end of the decade. This represents a 146% gain over the next five years. Yardeni’s bullishness is rooted in ongoing economic uncertainty, central bank buying, and the "Gold Put" provided by central banks diversifying their reserves into gold.

In conclusion, while there are varying opinions on how much further gold can rise, the consensus is that economic uncertainties and central bank demand will continue to fuel its price appreciation. The forecasts range from moderate increases to a potential massive surge over the next few years, with analysts continuing to closely monitor inflation trends, geopolitical developments, and the broader financial landscape.

Source: Business Insider

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Gerik

Economic

Stocks

The CSI 300 Index gained 0.6% after opening, while Chinese stocks listed in Hong Kong saw a slight decline of 0.3%. Despite signs of economic weakness, such as weak holiday consumption and disappointing box office earnings, investors remained buoyed by the positive global sentiment around AI advancements, particularly driven by companies like OpenAI. The rally in Chinese equities has been notably fueled by chip stocks after major announcements from DeepSeek and Huawei Technologies.

AI-Driven Optimism vs. Weak Consumer Spending

The recent Golden Week spending data revealed a consumer shift towards more budget-conscious behavior, with weak performance in movie ticket sales and airline bookings, as reported by major financial institutions like Morgan Stanley. This was reflected in declines in entertainment stocks, such as Maoyan Entertainment, as well as a shift from air and rail to highway travel. Although overall passenger traffic increased by almost 7%, this growth marked a decline compared to previous holiday periods. Analysts from Julius Baer noted that consumer-related stocks might experience profit-taking due to these signs of ongoing consumption weakness.

Nevertheless, the global AI trend has continued to fuel market optimism. AI developments such as the launch of DeepSeek's new AI model and Huawei's plans to double AI chip production have driven investment interest in Chinese stocks, particularly in the tech and chip sectors. Despite the ongoing challenges in consumer sentiment, the broader enthusiasm for AI technology has kept many investors hopeful for a rebound in China’s tech sector.

Policy and Market Expectations

As investors look forward to the upcoming Communist Party meeting, attention is shifting to potential policy signals that could address domestic demand weakness. In late September, China introduced a $70 billion capital injection aimed at boosting investment, and the market expects further policy interventions to stimulate domestic consumption. Analysts anticipate that policy measures could focus on addressing deflationary pressures and unlocking excess savings to reinvigorate consumption, which could offer a much-needed boost for China’s economy in the coming months.

Yuan’s Resilience and Market Sentiment

Despite a slight dip in the offshore yuan during the holiday period, it remains stronger by over 2% year-to-date, as demand for Chinese assets grows. The market is closely monitoring the People’s Bank of China’s reference rate for further policy guidance, as stability in the yuan will likely serve as a stabilizing factor for regional currencies. Analysts expect the yuan to strengthen further to around 7.07 per dollar by the end of the year, driven by resilient export performance and anticipated demand-side stimulus.

China’s stock market surged on AI-driven optimism despite weak holiday spending, with investors hopeful that global AI momentum will spill over into the Chinese market. Consumer sentiment remains sluggish, as evidenced by Golden Week data, but expectations of policy measures to stimulate domestic demand may provide support for the market. The yuan remains resilient, with analysts forecasting further strength by year-end.

Source: Bloomberg

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Economic

Commodity

According to data from Vortexa cited by Bloomberg, there are currently 1.2 billion barrels of crude oil being moved across the seas, with some of these barrels stored in floating storage, bringing the total to the highest level since 2020. This suggests a looming imbalance in the oil market, with production rates far exceeding consumption rates.

Oversupply and the Challenges it Brings

This surge in oil at sea raises alarms, as it reflects a situation where oil is being moved from one location to another, searching for buyers rather than being transported between already-secured buyers and sellers. Essentially, the oil appears to be moving without the usual demand backing it up. Oil producers are facing pressure as the market becomes oversaturated, with diminishing returns on their investments.

However, despite this oversupply, the situation is not entirely bleak for oil-consuming nations, especially China. The country has absorbed much of the excess oil, hoarding barrels since the start of 2025. Chinese state-owned energy companies are responding by investing in new storage capacities, further accelerating the stockpiling of crude oil. In 2025 and 2026, China plans to build 11 new storage sites, with a capacity of approximately 169 million barrels. This strategy is part of China's broader plan to take advantage of low oil prices while they last, positioning itself as a key player in the global oil market.

China's Strategic Hoarding and the Broader Market Implications

China's oil imports have been higher than its domestic refinery needs, with stockpiling rates reaching nearly 1 million barrels daily. This behavior has raised questions about China's long-term strategy, especially as global oil supply is expected to increase further, and prices are predicted to remain low. The uncertainty of future oil production trends, including slowing U.S. shale production and diminishing spare capacity from OPEC+, likely influences China’s decision to continue its aggressive stockpiling.

This move by China could also signal a cautious outlook on the future stability of the oil market. While U.S. shale production remains a key factor in keeping oil prices low, its growth slows as prices drop. Moreover, OPEC+ has struggled to meet its production targets, depleting its spare capacity and leaving the global market more vulnerable to fluctuations in demand. If a demand surge occurs, OPEC+ may not be able to respond as robustly as it once could.

A Complex Oil Market: Tensions Between Supply and Demand

Despite the substantial glut in the oil market, there remains significant market sensitivity surrounding supply disruptions. Any mention of new sanctions against Russia, for example, pushes oil prices higher, illustrating that concerns over supply security still influence traders' decisions. This dynamic reflects a market that is not entirely certain of a stable oversupply, despite the apparent glut.

In conclusion, while the oil market seems oversupplied at the moment, the dynamics of supply and demand remain complex. China’s oil hoarding strategy, alongside the challenges facing U.S. shale and OPEC+, suggest that the oil market is not as stable as it might seem. The tension between oversupply and market sensitivity to potential disruptions in supply will continue to shape the global oil landscape for the foreseeable future.

The current global oil glut, with 1.2 billion barrels of oil in transit, indicates an oversupply, with demand failing to keep pace. However, China is absorbing much of this surplus through aggressive stockpiling, raising questions about its long-term strategy. Despite the glut, oil prices remain sensitive to geopolitical tensions, particularly sanctions against Russia, suggesting that the oil market remains unpredictable.

Source: OilPrice

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Gerik

Economic

Commodity

Gold Retreats from Record High as Profit-Taking Follows a Torrid Rally

Gold prices pulled back from their record high above $4,000 an ounce reached on Wednesday, as profit-taking followed a torrid rally that had sent the precious metal soaring. On Thursday, gold dropped by as much as 1%, after having closed 1.4% higher in the previous session. This decline comes after a period where gold had been in overbought territory, with technical indicators suggesting that the rally had become unsustainable and leading investors to lock in gains.

Despite the pullback, gold remains up more than 50% this year, continuing to be buoyed by a combination of global economic uncertainties and geopolitical tensions. The sharp rally has been fueled by various factors, including concerns about the U.S. Federal Reserve’s independence, U.S. fiscal stability, and the growing unease surrounding global trade. Additionally, central banks worldwide have remained active buyers of gold, further contributing to its upward trajectory.

Geopolitical Developments and U.S. Optimism

However, some of gold’s haven appeal weakened after U.S. President Donald Trump indicated that a peace deal in the Middle East could be "very close." His remarks followed cautious optimism from Israeli and Hamas officials about the prospects of peace talks underway in Egypt, which could lead to an end to the two-year-long war in Gaza. As discussions surrounding a potential resolution gained traction, it somewhat dampened the demand for gold as a safe-haven asset, which had been rising amid the ongoing geopolitical instability.

While gold’s price has seen a retreat, it is still up significantly from the start of the year, highlighting its role as a preferred store of value amid uncertainty. This year’s price increase has been a result of several factors, including the continuing instability in global markets and escalating geopolitical tensions. The flight to gold has been especially pronounced as investors have sought a refuge from economic and fiscal concerns, particularly in the U.S.

Gold Price Movement and Market Trends

As of 9:48 a.m. in Singapore on Thursday, spot gold had dipped 0.3% to $4,031.21 an ounce, following the record high of $4,059.31 reached on Wednesday. The Bloomberg Dollar Spot Index also dipped 0.1%, reflecting some weakness in the greenback. Despite this retreat, gold remains firmly elevated, having gained more than 50% this year, largely due to persistent global risks and central bank activity in the gold market.

In addition to gold, other precious metals also saw some movement. Platinum edged lower after strong gains in previous sessions, while palladium held steady. The metals have continued to benefit from market tightness and significant inflows into exchange-traded funds (ETFs) that are backed by the metals, helping to support prices even as gold took a breather.

Silver, although slightly down on Thursday, remained close to its record high levels according to Bloomberg’s intraday data, which dates back to 1993. The continued interest in precious metals, particularly as an alternative to traditional financial assets, has been a defining feature of the market this year, with silver benefiting from a broader shift towards commodities seen as a hedge against inflation and instability.

In summary, while gold’s price correction might have dampened the euphoria around the record-breaking rally, its long-term upward trend is still supported by the same factors that have propelled it to its high levels, including ongoing global uncertainty and central bank demand. The coming weeks will likely provide further insight into how markets react to both economic developments and geopolitical resolutions.