IEA release plan failed to suppress oil prices, Asia-Pacific stock markets declined across the board, Dow futures fell 0.9%, and oil prices rose over 6%

Affected by the ongoing escalation of conflicts in the Middle East and significant oil price fluctuations, Asia-Pacific stock markets generally declined on Thursday. Although the International Energy Agency (IEA) announced the release of the largest crude oil reserves in history, it failed to effectively ease market concerns over energy supply disruptions, rising oil prices, and inflation rebound.

U.S. stock index futures and Asian markets opened lower on Thursday, continuing this week’s volatility. S&P 500 futures fell 0.8%, and major Asian indices dropped as much as 1.1% in early trading. Meanwhile, U.S. Treasury yields rose, and oil prices increased for the second consecutive day.

The ongoing escalation of Middle East conflicts has become a market focus. Reports indicate that Iraq’s oil ports have completely shut down after two oil tankers were attacked. Attacks on energy infrastructure have heightened fears of prolonged conflict, overshadowing the positive effects of developed countries releasing crude reserves.

Rising inflation expectations further dampened market sentiment. Although data released on Wednesday showed U.S. February inflation slowed compared to the previous month, investors are concerned that rising energy costs will complicate the Federal Reserve’s rate-cutting path. Traders currently expect the Fed to cut rates only once this year.

Ellen Zentner of Morgan Stanley Wealth Management said, “Despite the prospect of releasing oil reserves, ongoing uncertainty translates into persistent upside risks for oil prices, which also means the Fed will remain cautious about rate cuts.”

Major asset movements are as follows:

• Crude Oil Surges: WTI crude oil up about 6%, at $90.92 per barrel. Brent crude oil up over 6%, at $97 per barrel.
• Asia-Pacific Markets Generally Decline: Japan’s Nikkei 225 briefly down 1.6%, Topix down 1.34%. South Korea’s KOSPI briefly down 0.75%, Australia’s S&P/ASX 200 down 1.56%.
• U.S. Stock Futures Decline: Dow futures down 0.9%, S&P 500 futures down 0.8%
• Spot Gold, Silver, and Bitcoin Slightly Decline.

Energy Market Turmoil Intensifies

Energy markets remain the primary focus for investors, with oil and gas price fluctuations continuing to influence inflation expectations. Currently, West Texas Intermediate (WTI) crude is up about 6%, at $90.92 per barrel. Brent crude has risen over 6%, at $97 per barrel.

To stabilize energy prices, the IEA agreed to release 400 million barrels of oil, the largest release in its history. U.S. Energy Secretary Chris Wirth announced Wednesday evening that the U.S. will release 172 million barrels from strategic petroleum reserves.

Earlier, President Trump stated he would use strategic petroleum reserves to control energy prices. He also said that large-scale emergency oil releases would ease energy price pressures while the U.S. seeks to “complete its mission” in actions against Iran.

Ellen Zentner of Morgan Stanley Wealth Management said, “Despite the prospect of releasing oil reserves, ongoing uncertainty translates into persistent upside risks for oil prices, which also means the Fed will remain cautious about rate cuts.”

Asia-Pacific Markets Generally Decline

Amid soaring oil prices and geopolitical tensions, Asia-Pacific markets mostly declined on Thursday. Japan’s Nikkei 225 briefly fell 1.6%, Topix down 1.34%. South Korea’s KOSPI briefly down 0.75%, Australia’s S&P/ASX 200 down 1.56%.

In the foreign exchange market, the yen-dollar exchange rate touched its lowest level since January. According to a Bloomberg survey, over one-third of economists expect the Bank of Japan to keep policy unchanged next week but possibly raise the benchmark interest rate in April.

U.S. Stock Futures Decline

On Wednesday, U.S. stocks closed with little change, with the Dow Jones Industrial Average down 0.61%, the S&P 500 down 0.08%, and the Nasdaq Composite up 0.08%.

Currently, U.S. stock futures are broadly lower. Dow futures are down about 0.9%.

Brian Jacobsen of Annex Wealth Management said, “February inflation data was heading in the right direction, but then conflict erupted in the Middle East, and now the outlook is changing.”

Seema Shah of Principal Asset Management noted that while investors are more focused on how Middle East conflicts will impact inflation in the coming months, recent data provides some reassurance that prior energy shocks did not push prices in the wrong direction.

She added, “The Fed has historically looked through energy-driven price spikes. But since inflation has been above target for nearly five years, this time it may be more difficult.”

In other assets, spot gold, silver, and Bitcoin declined slightly.

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