Brent jumps 4% to $113.17 amid inflation concerns and rate pressure
Key Facts
Brent crude jumped 4% on Thursday, October 22, to $113.17 a barrel after touching a five-month high, according to the Associated Press. Oil’s rise came as higher energy prices raised concerns about persistent inflationary pressures and complicated the path for U.S. interest rates. These concerns matter for gold, which pays no yield, although its price movements are not determined by a single factor. The World Gold Council recorded an 8.5% decline in gold in September and linked the drop to higher yields and the dollar, as well as reduced futures positions. By contrast, EL7 data showed gold on the XAUUSD series closing at $4,023.865 an ounce on Friday, October 23.
Market pressure extended beyond oil: the S&P 500 lost 1.2% on Thursday, its worst session since July, and the Nasdaq fell 2.6%, according to the Associated Press. The agency attributed the decline to a drop in AI stocks, while most other U.S. stocks rose. The equity moves put the market backdrop in the context of a session that saw broad declines in the major indexes, alongside a rise in Brent. In a separate report on inflation, the Associated Press said stock prices edged lower after its release, while increased expectations of a rate hike pushed bond yields higher. These developments link price data and monetary policy expectations on one hand with asset moves in markets on the other.
U.S. Bureau of Labor Statistics data showed core inflation, which excludes food and energy, rose 2.6% in the 12 months through September, following a 2.4% increase in the 12 months through August. The gasoline index also rose 9.1% in September, accounting for more than half of the monthly increase in the overall price index. The Associated Press said the inflation figures reflected the continued impact of the war on gasoline prices, alongside a contribution from increased investment in data centers and artificial intelligence that lifted prices for chips and electronics. This means the price pressures in the report included energy, along with other factors related to investment and technology. On the supply side, the U.S. Energy Information Administration said average refinery utilization exceeded 95% of capacity from May through September, the highest for those months since 1998.
But higher refinery utilization did not translate into record production to the same extent: the Energy Information Administration said U.S. refinery output in 2026 was the highest only since 2019. The agency attributed this to a 4% decline in refining capacity since 2019, despite utilization reaching high levels. It also cited tight product supplies and higher margins, particularly for diesel, as factors behind strong refinery runs. This context connects refiners’ demand for crude with their need to supply the fuel market, as Brent rose to a five-month high. These developments come alongside concerns about the effect of energy prices on inflation, while the path for interest rates remains a key focus for markets.
In the gold market, World Gold Council data showed a divergence between falling prices and continued fund inflows: the metal ended September at $4,176 an ounce, down 8.5% month on month. In the same month, global gold exchange-traded funds recorded inflows of $10 billion, equivalent to 67 tonnes. In India, fund inflows reached 44.5 billion rupees, or $466.2 million, the highest level in seven months. The council said the festive and wedding season provides a supportive backdrop for near-term jewelry demand. It also noted, however, that higher prices may limit growth in jewelry purchase volumes despite seasonal support.
The Federal Reserve raised its target rate range by a quarter of a percentage point to 3.75%–4.00% on September 16. In a Reuters poll published on October 20, 94 of 100 economists expected the Fed to hold rates at that range at its October 27 and 28 meeting. All 100 economists expected a rate increase in December, according to the poll. The Federal Reserve’s calendar lists its next meeting on December 8 and 9. Before then, the Bureau of Economic Analysis has scheduled the advance estimate of third-quarter GDP and September personal income and spending data for October 29 at 8:30 a.m.