Global oil prices extended declines for a third consecutive session on Wednesday, easing pressure on nervous markets amid signs of easing geopolitical tensions and technical selling.
Brent crude futures fell more than 2% to $85.43 per barrel, while U.S. West Texas Intermediate crude dropped 2.43% to $80.36. The declines follow a week of heightened volatility tied to Middle East tensions and supply concerns. If sustained, this would represent the largest weekly decline in oil prices since June, according to market data.
The retreat in crude prices came as Oman and Iran resumed talks aimed at reopening a key Gulf shipping route, easing concerns over potential disruptions to oil flows. U.S. Energy Secretary Chris Wright noted that a significant volume of oil is reportedly exiting the Strait of Hormuz via ships with transponders disabled, though he did not provide specific figures.
Refined product prices, including diesel, remained elevated, reflecting tightness in fuel markets despite the broader crude price decline. The divergence underscored ongoing supply constraints in certain segments of the energy complex.
In the U.S., Federal Reserve officials prepared for a high-profile gathering at Jackson Hole, Wyoming, where Chair Kevin Warsh is scheduled to deliver a keynote speech on Friday. Richmond Fed President Thomas Barkin is also set to participate in the annual symposium, which traditionally serves as a platform for central bankers to discuss policy frameworks and economic outlooks.
Economic data released Wednesday showed U.S. consumer confidence declined again in August, while new home sales posted a sharp drop. The July personal consumption expenditures (PCE) inflation index, due later in the week, is expected to show annual headline and core inflation rates still running above 3%, well above the Fed's 2% target. Revisions to the PCE data are slated for September.
Treasury auctions proceeded as scheduled, with the U.S. selling $70 billion in 5-year notes and $28 billion in 2-year floating-rate notes. The auctions followed the government's second-quarter GDP revision and corporate profit estimates, which are closely watched for signs of economic momentum.
In corporate earnings, Nvidia is expected to report revenue nearly doubling over the past year, with full-year estimates exceeding $100 billion. Options markets implied a potential 5% stock swing around the results. Morgan Stanley estimated that Nvidia's Rubin chips could generate nearly $9 billion in sales in the quarter ending October. Rival chipmakers Intel and AMD also faced scrutiny as the sector's performance remained a key barometer for tech sentiment.
Other major earnings reports due included HP, Salesforce, CrowdStrike, Agilent, and Synopsys. The broader equity market showed signs of stabilization as oil prices retreated, though investors remained cautious ahead of the Jackson Hole event and upcoming inflation data.
