Global crude oil prices hovered near a five-month high on Wednesday, driven by growing fears of a potential escalation in the Israel-Iran conflict, especially following reports of possible U.S. involvement.
West Texas Intermediate (WTI) crude, the U.S. benchmark, climbed as much as 1.1% in early Asian trading, extending Tuesday’s sharp 4% gain. The surge in oil was accompanied by a drop in Asian equities, underlining broader market caution. The MSCI Asia-Pacific equity index marked its second consecutive day of losses, mirroring Wall Street’s retreat, where the S&P 500 fell 0.8% on Tuesday.
Foreign news agencies reported that investors rushed into energy markets after signals that the United States may intensify its role in Israel’s military operations against Iran. Market concerns were amplified by former President Donald Trump’s public threats and reports of a high-level national security meeting, fueling speculation about further escalation.
Meanwhile, disappointing U.S. economic data has deepened investor anxiety. Retail sales declined for a second consecutive month, industrial production shrank unexpectedly, and homebuilder confidence hit its lowest point since December 2022. The data has raised concerns about the strength of U.S. consumer spending and the overall economic outlook ahead of an important Federal Reserve policy decision.
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