Treasury yields steady as Trump strikes diplomatic tone on Iran ahead of midterms
Yields were largely unchanged Friday as investors assessed President Trump's latest comments on Iran.
West Texas Intermediate (WTI) crude oil prices dipped to around $89.65 during early European trading hours on Friday, declining after US President Donald Trump stated that the United States would not launch an attack on Iran before the November midterm elections. Reports indicated that Trump dismissed the likelihood of attacking Iran prior to the US midterm elections, highlighting ongoing productive negotiations with Tehran.
Additionally, WTI prices were influenced by the International Energy Agency's (IEA) decision to accelerate the release of oil stocks and prioritize diesel supplies amidst record fuel prices and supply disruptions caused by war-related factors. The IEA's announcement came after G7 countries agreed to release 100 million barrels of crude and diesel, leading to expectations of further oil stock releases.
Unexpected decreases in US crude oil inventories, as reported by the Energy Information Administration (EIA), also impacted the market, with stockpiles falling by 3.186 million barrels in the week ending October 2, a shift from the previous week's increase of 922,000 barrels. Analysts at ABN Amro noted that the "escalation risk into midterms" was contributing to the bullish sentiment in crude prices, as President Trump reportedly asked the Pentagon to prepare Iran strike plans before the US midterm elections.
The market remained cautious, however, given the increased costs, logistical challenges, and the constant threat of being attacked in regions outside the Omani route, such as off Qatar and in the Gulf of Oman. WTI prices were observed above both the 100-day simple moving average and the lower Bollinger Band, suggesting a mild bullish bias for the near term.
The Relative Strength Index (14) was near 49, indicating a neutral, range-bound market sentiment rather than strong directional pressure. Resistance was identified at the Bollinger middle band around $92.25, while support was seen close to the lower Bollinger Band at $85.15, with the 100-day SMA near $84.10 serving as a strategic floor for potential support.
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