The price of Brent crude oil exceeded $114 for the first time since May
The rise in oil prices coincided with growing investor concerns about the sustainability of the artificial intelligence boom / Photo: Shutterstock.com
Brent crude oil futures for December delivery rose by more than 1% during Friday's trading in London, reaching $114.3 per barrel. The last time Brent traded above $114 was in May.
The rise in oil prices coincided with a decline in global stock markets following a sell-off in tech stocks on Wall Street, according to the Financial Times. On Thursday, the Nasdaq 100 index closed down 2.9% after Meta raised its capital expenditure forecast, heightening investors’ doubts about the return on large-scale investments in AI infrastructure.
"All the upheavals of recent weeks have piled up," said Deutsche Bank strategist Jim Reed.
Trading in Asia was volatile on Friday: South Korea’s Kospi fell 4% but recovered to its previous level by the close, while Japan’s Nikkei 225 lost up to 2%, partially recouping its losses. Since the beginning of the month, the Kospi has fallen nearly 20% and is more than 40% below its June high, posting the worst performance among major global indices. China’s CSI 300 index fell by about 1% and remains in a “bear market” after dropping 20% from its late-June peak.
Amid deteriorating investor sentiment in Asia, the value of safe-haven government bonds rose: the yield on 10-year Japanese bonds fell by 0.09 percentage points to 2.77%. “Global investors are assessing the risk that the hype around hyperscalers and AI could come crashing down, and are looking for places to safely park their capital,” explained a Tokyo-based currency trader, whom the FT did not name.
Sekki Omori, a fixed-income strategist at Deutsche Bank, also noted that concerns about the scale of hyperscalers’ capital expenditures and the debt they are raising have driven investors toward safer assets, such as U.S. Treasury bonds. In his view, the yen’s appreciation is easing pressure on the Bank of Japan to accelerate interest rate hikes.
After a sharp drop the previous day, U.S. tech stocks are set to open trading on Friday at the same level: Nasdaq 100 futures are up 0.1%.
This article was AI-translated and verified by a human editor
