Oil steadies after surge as dollar firms before CPI

Oil prices eased early Friday, with Brent at $65.63 per barrel, after Thursday’s sharp rise driven by new US sanctions on Russian producers Rosneft and Lukoil that pushed both benchmarks toward a 7% weekly gain. The US dollar held firm at 99.04 on the index ahead of inflation data, with the euro at $1.1606 and sterling steady at $1.3322, while gold slipped to $4,086 per ounce as investors moved away from safe-haven assets. Markets also looked to next week’s APEC summit, where US President Donald Trump is set to meet China’s President Xi Jinping amid renewed trade tensions and a government shutdown in Washington.

Equities

London’s FTSE 100 ended Thursday 0.7% higher at a record 9,594.82 points, lifted by a surge in oil stocks and upbeat earnings from several blue-chip firms. The index benefited from higher crude prices and a series of strong corporate updates. The FTSE 250 also closed 0.6% higher, reaching a near four-year high as optimism spread across domestic stocks.

Shell rose 3.2% and BP advanced 3.8% after crude oil prices jumped nearly 5%. The rally followed US sanctions against major Russian suppliers Rosneft and Lukoil, tightening global supply expectations and boosting sentiment across the energy sector. An index of UK precious metals miners climbed 3.7%, supported by rising gold prices as investors sought safe-haven assets amid fresh geopolitical tensions.

Among mid-cap firms, Molten Ventures surged 14.6% to lead the FTSE 250 after forecasting 7.2% growth in its net asset value. In contrast, investment platform AJ Bell fell 2.4% after reporting £1.5 billion in outflows from its advised platform segment, which led to lower net inflows for the quarter.

Across the Atlantic, Wall Street ended Thursday higher as investors weighed mixed earnings and geopolitical developments. The S&P 500 gained 0.58%, the Dow Jones Industrial Average rose 0.31%, and the Nasdaq Composite advanced 0.89%. Markets were buoyed by confirmation that US President Donald Trump will meet Chinese President Xi Jinping next week during his Asia trip, a sign of potential progress following recent trade tensions.

Exxon Mobil rose 1.1%, Chevron added 0.6%, and independent refiner Valero Energy climbed 7.0% after reporting better-than-expected quarterly profits. The sector gained further support from surging crude prices following Washington’s sanctions on Russian oil companies.

Tesla rebounded 2.3% after a brief decline earlier in the week linked to a weaker-than-expected third-quarter profit. IBM slipped 0.9% after reporting slower cloud software growth, overshadowing an otherwise solid earnings beat. Quantum computing firms surged following reports that the US government is in talks to take equity stakes in several companies in exchange for federal funding. IonQ, D-Wave Quantum, Quantum Computing, and Rigetti Computing all rose between 7.1% and 13.8%.

Honeywell shares jumped 6.8% after raising its full-year profit forecast, driven by strong aerospace demand. In the airline sector, American Airlines gained 5.6% after upgrading its annual profit outlook, while Southwest Airlines fell 6.3% despite reporting a surprise quarterly profit and record sales. The S&P 500’s aerospace and defence index climbed 2.2%, supported by continued investor interest amid rising geopolitical tensions, while the small-cap Russell 2000 outperformed broader US indices on the day.

Forex & Commodities

The US dollar held firm, supported by expectations that the Federal Reserve will cut interest rates next week. Traders awaited the delayed US Consumer Price Index for September, which is forecast to show headline inflation up 0.4% and core inflation up 0.3%. The dollar index stood at 99.04, marking a small rise for the week. The euro eased to $1.1606 and sterling was steady at $1.3322. The Canadian dollar weakened slightly to C$1.4015 per US dollar after President Trump said trade talks with Canada had been terminated. The Japanese yen slipped to 152.96 per US dollar, its weakest level in two weeks, after data confirmed inflation in Japan remained above the Bank of Japan’s 2% target.

Gold prices fell 0.9% early on Friday to $4,086 per ounce and were heading for their biggest weekly decline since November 2024 as the stronger dollar reduced demand for safe-haven assets. Silver also moved lower to $48.14 per ounce, while platinum edged down to $1,617 and palladium dropped to $1,416. Investors were cautious ahead of the US inflation report, with most now expecting two rate cuts by the Federal Reserve before year-end. Analysts said a softer inflation reading could support gold, while a stronger one might lift the dollar further.

Oil prices eased in early Friday trading, trimming part of the previous session’s sharp rise but remaining on track for a strong weekly gain. Brent crude slipped to $65.63 per barrel and US West Texas Intermediate to $61.43. Both benchmarks were still set for about a 7% weekly increase after Thursday’s rally, fuelled by new US sanctions on Russian energy giants Rosneft and Lukoil. The measures prompted Chinese state oil companies to suspend Russian imports temporarily and Indian refiners to cut purchases. Kuwait signalled that OPEC could increase production to offset any disruption, while the US warned it was prepared to impose further sanctions if required.