Oil Surges Past $100 as Trump Rules Out Iran Deal — SkimNews
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- U.S. crude oil surged above $100 per barrel and Brent crude surpassed $107 on Thursday, both reaching their highest levels since mid-May, with analysts warning Brent could climb to $120–$150 if the Iran stalemate continues
- Trump told reporters Wednesday he is not looking for a deal with Iran and expects oil prices to fall only "right after" the November midterm elections, despite months of saying the war would end quickly
- Saudi Arabia informed OPEC its crude output plunged to the lowest level since 1990 due to renewed hostilities with Iran, and the U.S. Strategic Petroleum Reserve is at its lowest level since the 1980s after 400 million barrels were released earlier this year
- National average gas prices rose 5 cents overnight to $4.27 and diesel jumped to $5.97, with diesel and heating fuel driving the Producer Price Index up 0.4% from June to July (5.4% year-over-year)
- Treasury yields spiked, with the 10-year touching 4.93% (highest since 2023) and the 30-year hitting 5.35% (highest since 2007), pushing the average 30-year fixed mortgage rate to 7.07%
- U.S. stocks tumbled on inflation fears, with the S&P 500 falling 0.6%, the Nasdaq down 0.7%, and the Dow shedding 350 points
- Market odds of a Fed rate hike at next week's meeting rose to roughly 75% after the European Central Bank raised eurozone rates Thursday, with ECB President Christine Lagarde warning inflation will remain "well above target" into the first half of 2027
Why it matters: American households are now paying $4.27 for gas and 7.07% on a 30-year mortgage while the 30-year Treasury yield sits at a 17-year high, and the Fed is increasingly likely to hike rates next week. With the Strategic Petroleum Reserve at its lowest since the 1980s and Saudi output at a 35-year low, there is no buffer left if the Iran stalemate extends into winter.
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