Oil Rises on Supply Tension as Dollar Weakens After Fed Hold

Crude oil prices advanced on Wednesday, October 28, as clashes in Yemen, a strike on a Saudi refinery, and tensions involving Iran heightened the risk of export disruptions. Following the refinery strike, Brent crude gained about 1% to $115.32 a barrel and U.S. crude rose 3% to $102.78.

Gold absorbed conflicting pressures throughout the trading day. Early trading saw bullion retreat as higher fuel costs renewed worries about sticky inflation. Later in the session, the Federal Reserve held interest rates steady in a 10-2 vote, with Lisa Cook and Beth Hammack dissenting in favor of a 25-basis-point increase while policymakers noted that inflation remained elevated. Following the policy update, interest rate futures indicated an 85% probability of a policy increase in December.

Foreign exchange markets responded to the Federal Reserve's policy announcement, with major currencies strengthening against the dollar as the dollar weakened late in the session. Meanwhile, policymakers in Wellington held the official cash rate at 2.75%.

In cryptocurrency markets, Bitcoin -0.1% and Ethereum -0.1% on Wednesday, October 28 showed little movement. Round-the-clock trading continued past the official session close, with metals moving further overnight: as of 10:40 am New York, silver -2.4% and gold +0.3%.

Several key economic releases and central bank decisions are scheduled for Thursday. In the United States, the morning calendar brings the advance estimate for third-quarter gross domestic product and September personal consumption expenditures, alongside weekly initial unemployment claims. In Europe, official releases include preliminary third-quarter economic growth data and September unemployment figures. Monetary policy announcements also continue, with European central bankers delivering a scheduled rate decision and news conference, while Japanese policymakers begin a two-day policy review.