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Oil prices retreated from record highs as G7 nations and the International Energy Agency (IEA) reportedly discussed coordinated releases of emergency oil reserves to stabilize markets. WTI crude fell to $102.62, down from a peak near $116, while Brent crude eased to $104.58. The move followed a 12% surge driven by Middle East tensions, including an Iranian drone attack on a Bahraini refinery. European indices continued to decline amid regional conflict fears, with S&P 500 futures down 1.2%. The US dollar strengthened broadly, with CAD outperforming EUR. Germany’s industrial data showed weaker-than-expected production and orders, adding to market jitters. The coordinated G7/IEA plan aims to temper oil prices by releasing strategic reserves, which could reduce short-term volatility. However, the effectiveness of this measure remains uncertain, as geopolitical risks persist. Traders are also monitoring the Fed’s potential rate decisions and the impact of higher Treasury yields (up to 4.17%) on equity markets. Gold and silver declined, while Bitcoin rose slightly, reflecting mixed risk appetite. For Gulf investors, the oil price correction and G7 intervention could ease inflationary pressures but may also weaken energy sector revenues. Key watchpoints include the scale of reserve releases, progress in Middle East de-escalation, and upcoming Fed statements. Regional markets may see mixed flows as energy-linked assets adjust to the new price environment.
