Brent crude exceeds $109: Middle East tensions also drive up bond yields
Rising tensions in the Middle East following the targeting of oil tankers have pushed oil prices higher, while also triggering a sharp increase in US bond yields.
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The rising tension in the Middle East, following the direct targeting of oil tankers, has increased concerns regarding global energy supply. As a result of these developments, the price of a barrel of Brent crude rose to $109.65 as of 00:55 Turkish time.
Markets are assessing the possibility that conflicts in the region could intensify further, potentially putting pressure on oil supply. Meanwhile, US President Donald Trump, in a statement to a television channel, said that contrary to his previous assessments, a war with Iran could end before the November 3 Congressional midterm elections.
The rise in oil prices has also strengthened concerns that inflation may be persistent. The yield on the 10-year US Treasury note rose above 4.96%, reaching its highest level since 2023. The 30-year bond yield also exceeded 5.37%, reaching its highest level since 2007.
On the macroeconomic data front, the US Producer Price Index (PPI) rose by 0.4% on a monthly basis in August, in line with expectations. The annual increase, however, remained above estimates at 5.4%.
Analysts note that investors are focusing on the Consumer Price Index (CPI) data to be released in the US. This data is expected to shape expectations regarding the monetary policy move the US Federal Reserve will take next week.