Brent crude topped $106 a barrel on Thursday after U.S. strikes on Iranian oil tankers, and traders pushed the odds of a Federal Reserve rate increase next week to 64% following an August producer price report. Bitcoin fell 2.1% as the rally in oil and the rise in Treasury yields dragged most large crypto tokens lower.
Brent crude traded at $106.83 a barrel on Thursday afternoon, up 5.6% on the day and its highest level since May 19. The contract has risen 11.7% since Sept. 2, when it settled at $95.63.
Five tankers destroyed in the Gulf
U.S. Central Command said on Sept. 8 that its forces destroyed five Iranian crude carriers — the M/T Kaviz, Charminar, Horizon 1, Riesco and Derya — after Iran's Revolutionary Guard Corps targeted a U.S. Navy warship with ballistic missiles twice over the prior two days. Four of the strikes hit the Gulf of Oman and one hit near Kharg Island, and crews were directed to abandon ship before the vessels were hit. A Sept. 5 release describes three earlier tanker strikes.
The U.S. Maritime Administration renewed its advisory on Sept. 9, warning that Iran continues to threaten and strike commercial vessels in the Persian Gulf, Strait of Hormuz and Gulf of Oman. The advisory replaced one expiring the same day, making it a scheduled six-month renewal rather than a response to the week's strikes.
Inventory data lags the rally
Separately, the Energy Information Administration's Weekly Petroleum Status Report, delayed from Wednesday by the Sept. 7 holiday, publishes at 12 p.m. ET Thursday. The most recent report, for the week ending Aug. 28, recorded commercial crude inventories down 4.5 million barrels to 424.5 million — a snapshot that predates both sets of tanker strikes.
Producer prices lift hike odds
The Bureau of Labor Statistics reported that the producer price index for final demand rose 0.4% in August, against 0.1% in July. Final demand prices climbed 5.4% over 12 months. The report added to signs of persistent inflation just days before the Fed's meeting, and traders responded by pushing the odds of a quarter-point rate hike from 52.5% at 8 a.m. ET to 63.5% by early afternoon on Polymarket.
Treasury yields moved with the odds: the 10-year yield reached 4.92%, its highest since Oct. 25, 2023. The 30-year reached 5.34%, above every daily close of the past five years. The European Central Bank separately raised its three key rates by 25 basis points on Thursday, taking its deposit facility to 2.50%.
Crypto retreats across the board
Bitcoin last changed hands at $77,120, down 2.1% over 24 hours and 5.1% over seven days. Ether fell to $2,448.88, down 1.9% on the day. XRP fell 4.8% to $1.35 and Solana declined 3.6% to $99.69.
One hundred and three of the 125 largest non-stablecoin tokens fell over 24 hours, against 21 that rose. Equities slipped alongside crypto, with the S&P 500 down 0.4% and gold down 1.3% to $4,405 an ounce.
Source: The Defiant
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