Brent crude drops to $105 as Asian stocks slide

Brent crude oil closed at US$105.14 per barrel, down 2.3 percent. The price dropped after briefly exceeding US$108 earlier in the session. Asian stock markets declined across the board, mirroring recent losses in the United States.

The Nikkei 225 in Japan fell 1.9 percent to 64,011.34. South Korea’s Kospi index lost 1.8 percent to 6,909.91. These moves followed a fourth consecutive day of losses for the S&P 500 on Thursday.

Equities track US losses

SoftBank Group shares in Japan dropped nearly 4 percent. Samsung Electronics in South Korea slid 3.5 percent, while SK Hynix declined 2.2 percent. In China, the Shanghai Composite index fell 1.2 percent to 3,888.11.

The Hang Seng index in Hong Kong dipped 0.7 percent to 24,789.07. Australia’s S&P/ASX 200 fell 0.9 percent to 8,741.20. Taiwan’s Taiex index lost 1.6 percent, and India’s Sensex declined 0.5 percent.

Oil volatility persists

Brent crude was at US$72 per barrel in late February. Prices have risen due to intensified tensions between the U.S. and Iran. Analysts note that flow through the Strait of Hormuz remains well below pre-war levels.

U.S. benchmark crude fell 2 percent to US$100.46 per barrel. ING strategists warn that the supply situation remains fragile. UBS economist Yu Song expects oil prices to stay elevated for the rest of the year.

Inflation data drives yields

The yield on the 10-year U.S. Treasury stood at 4.94 percent. This is higher than the 4.83 percent recorded on Wednesday. The rise is driven by energy costs and inflationary pressures.

U.S. producer prices rose 5.4 percent year-on-year in August. This marks an acceleration from July’s 4.8 percent. Investors await the consumer price index data released Friday. The Federal Reserve meets next week.