Brent crude climbed past $114 a barrel for the first time since May, as fears of renewed Middle East escalation met a sell-off in Big Tech stocks. Investors moved into haven bonds, while technical indicators show Brent stretched after its rally.
Oil surged past $114 a barrel for the first time since May on Friday, weighing on global markets already reeling from a sell-off in Big Tech stocks on Wall Street. Brent crude, the international benchmark, was up as much as 1.4% at $114.72 a barrel, extending a rally amid fears of renewed escalation of the conflict in the Middle East.
The climb arrives as concerns over the sustainability of the AI boom and a French sovereign bond sell-off intensify. The FT reports that the surging oil price threatens to inflict further damage on the global economy.
Tech sell-off drives investors into havens
The Nasdaq 100 closed down 2.9% on Thursday after Meta's forecast for capex deepened anxiety over whether the debt-fuelled AI investment boom would pay off. The move sparked a rush into safe haven assets and drove US Treasuries to their best day since 2023, pushing the 10-year yield down 0.19 percentage points.
Markets steadied on Friday. The 10-year Treasury yield was 0.02 percentage points higher at 4.97%, and the Stoxx Europe 600 was down 0.1% in early trading. In Asia, South Korea's Kospi tumbled as much as 4% before trading 0.3% higher, and the Kospi has declined by almost a fifth this month.
China's CSI 300 fell 1.7% and remains in a bear market after falling 20% from its peak in late June.
Brent looks overbought on the chart
Technical analysis from Investing.com adds a cautionary note. Brent was hovering at $114.32 on the 5-hour chart, more than 11% above its 200-period SMA, which sits at $102.08. The site's RSI reading of 68.59 is nearly overbought.
Investing.com says the uptrend remains in place while price holds above SuperTrend support at $109.02. A failed test of $114.70 followed by a drop below $112.00 would signal a possible unwind.
Sources: Financial Times, Investing.com
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