IEA’s release plan failed to suppress oil prices; Asia-Pacific stock markets mostly fell, Dow futures dropped 0.9%, and oil prices rose over 6%.

IEA’s release plan failed to suppress oil prices; Asia-Pacific stock markets mostly fell, Dow futures dropped 0.9%, and oil prices rose over 6%.

Affected by the continued escalation of conflicts in the Middle East and significant oil price fluctuations, Asia-Pacific stock markets generally fell on Thursday. Although the International Energy Agency (IEA) announced it would release the largest crude oil reserves in history, it failed to effectively ease market concerns about energy supply disruptions, rising oil prices, and a resurgence of inflation.

U.S. stock index futures and Asian stock markets declined in early trading on Thursday, continuing this week’s volatile trend. S&P 500 index futures dropped 0.8%, and the Asian stock market benchmark fell as much as 1.1%. Meanwhile, U.S. Treasury yields increased and oil prices rose for the second consecutive day.

The persistent escalation of Middle East conflict is the focus of market attention. According to reports, Iraq’s oil port stopped operations completely after two oil tankers were attacked. Attacks on energy infrastructure have heightened concerns about prolonged conflict, overshadowing the benefits of developed countries releasing oil reserves.

Rising inflation expectations have further weighed on market sentiment. Although data released on Wednesday showed U.S. inflation in February eased compared to the previous month, investors worry that rising energy costs will complicate the Fed’s path for rate cuts. Traders now expect the Fed to cut rates only once this year.

Ellen Zentner from Morgan Stanley Wealth Management said: “Despite the prospect of releasing oil reserves, persistent uncertainty translates to ongoing upward risks for oil prices, which also means the Federal Reserve will remain cautious on rate cuts.”

Major asset performance is as follows:

Oil surges: WTI crude oil rose about 6%, to $90.92 per barrel. Brent crude climbed more than 6%, to $97 per barrel.Asia-Pacific stocks broadly declined: Japan’s Nikkei 225 index once fell 1.6%, TOPIX index down as much as 1.34%. South Korea’s Kospi index dropped 0.75%, Australia’s S&P/ASX 200 index fell 1.56%.U.S. stock index futures fell: Dow futures down 0.9%, S&P 500 futures down 0.8%.Spot gold, spot silver, and Bitcoin fell slightly.

Turbulence Intensifies in Energy Markets

Energy markets remain the main focus of investor attention, as volatility in oil and gas prices continues to impact inflation expectations. Currently, West Texas Intermediate crude (WTI) has risen about 6% to $90.92 per barrel. Brent crude climbed more than 6%, to $97 per barrel.

In order to stabilize energy prices, the International Energy Agency (IEA) agreed to release 400 million barrels of oil, marking the largest release in the organization’s history. U.S. Energy Secretary Chris Wright announced Wednesday night that the U.S. would release 172 million barrels of oil from its strategic reserves.

U.S. President Trump earlier stated he would use strategic oil reserves to control energy prices. He also said a large release of emergency oil reserves would ease price pressure, while the U.S. sought to “complete the mission” in its actions targeting Iran.

Ellen Zentner from Morgan Stanley Wealth Management said: “Despite the prospect of releasing oil reserves, persistent uncertainty translates to ongoing upward risks for oil prices, which also means the Federal Reserve will remain cautious on rate cuts.”

Asia-Pacific Stock Markets Broadly Down

Amid surging oil prices and geopolitical tensions, Asia-Pacific stock markets broadly fell on Thursday. Japan’s Nikkei 225 index once dropped 1.6%, TOPIX index fell 1.34%. South Korea’s Kospi lost 0.75%, and Australia’s S&P/ASX 200 index fell 1.56%.

In foreign exchange markets, the yen reached its lowest level against the dollar since January. According to a Bloomberg survey, over one third of economists expect, after the Bank of Japan maintains its policy settings next week, it may raise its benchmark interest rate in April.

U.S. Stock Index Futures Drop

On Wednesday, U.S. stock markets closed with little change; the Dow Jones Industrial Average fell 0.61%, the S&P 500 index dipped 0.08%, and the Nasdaq Composite rose 0.08%.

Currently, U.S. stock index futures are broadly down. Dow futures are down about 0.9%.

Brian Jacobsen from Annex Wealth Management said: “February’s inflation data was moving in the right direction, but then conflict broke out in the Middle East and now the path is changing.”

Seema Shah of Principal Asset Management noted that, although investors are more concerned with how the Middle East conflict will affect inflation over the coming months, the latest data provides some reassurance that, before the recent energy shock, price pressures had not moved in the wrong direction.

She added: “The Federal Reserve has historically looked through energy-driven price spikes. But as inflation has been above target for nearly five years, it may be more difficult this time.”

In other assets, spot gold, spot silver, and Bitcoin declined slightly.

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