Oil prices climbed above $100 a barrel on Thursday, driven by growing tensions around the Strait of Hormuz and rising risks of disruptions to global supply. At the same time, stronger US inflation data raised expectations that the Federal Reserve could soon implement an interest rate hike, putting pressure on both gold and Bitcoin prices.
Oil prices spike amid geopolitical turmoil
Brent crude surged 5.9% to $107.18 per barrel, while US West Texas Intermediate (WTI) crude advanced 6.25% to $102.05. Both benchmarks are now trading more than 30% above their August lows, following a series of attacks on shipping lines tracing back to the ongoing Iran conflict.
Iran’s military stated that it targeted 10 ships near the key Strait of Hormuz on Wednesday, after US forces reportedly struck five Iranian oil tankers. The Strait of Hormuz remains a vital waterway for global oil shipments, and increased limitations on shipping have heightened market anxieties.
In a further escalation, Iran-aligned Houthi forces seized Yemen’s Mocha port, sharpening concerns over navigation through the Red Sea. Attacks emanating from Yemen on Saudi energy facilities have broadened supply risks beyond the Hormuz corridor, according to Simon-Peter Massabni of XS.com.
“With prospects for a definitive resolution to the Iran conflict dimmed and Brent crude prices recently topping $100 for the first time since July, crude oil markets are now settling into a prolonged new normal where disruption risk is persistent, not episodic,” S&P Global Energy stated.
China’s recent increase in oil purchases added further momentum to the rally. Economists at ING noted that the country, which is the world’s largest crude importer, has boosted buying activity after several months of subdued demand.
US crude inventories dropped by 391,000 barrels last week to 424.1 million, against expectations for a larger 1.55-million-barrel decline.
OPEC reduced its 2026 oil demand growth forecast for the fifth time in a row, now projecting an increase of only 380,000 barrels a day. According to a Reuters survey, OPEC’s August output fell by 640,000 barrels per day.
| Benchmark | Current Price | Change | Aug Low |
|---|---|---|---|
| Brent | $107.18 | +5.9% | $82.40 |
| WTI | $102.05 | +6.25% | $78.35 |
Mini dictionary: OPEC, the Organization of the Petroleum Exporting Countries, is a group of major oil-producing nations that coordinates policies and helps stabilize global oil markets.
Gold and Bitcoin decline as rate hike bets increase
Gold prices dropped more than 1% in Thursday trading, with spot gold falling 1.8% to $4,320 an ounce and US gold futures closing 2.19% lower at $4,364.20. The losses came after the US Producer Price Index (PPI) pointed to hotter inflation, reinforcing expectations of a Federal Reserve interest rate increase.
The latest PPI figures showed final-demand prices rising 0.4% month-on-month in August, up from a revised 0.1% in July. Over the past twelve months, the PPI advanced 5.4%, accelerating from 4.8% the previous month.
Kyle Rodda, senior analyst at Capital.com, cited strengthening energy prices as a key reason for the uptick in underlying US inflation, which weighed on both gold and cryptocurrency markets.
The PPI data indicated a pickup in underlying inflation in the US economy, and part of that is connected to rising energy costs driven by geopolitical issues.
Bitcoin drops below $78,000 on macro headwinds
Bitcoin slipped below $78,000 for the first time in four sessions, fluctuating between $76,000 and $78,500 and reaching an intraday low of $76,663. The digital asset is now around 39% beneath its October 2025 peak of $126,000 and remains locked within the $60,000 to $80,000 region that has contained most price action since February.
The ongoing weakness coincides with oil’s surge past $105 a barrel and mounting speculation around a Federal Reserve rate move. Higher interest rates can increase the opportunity cost of holding non-yielding assets such as Bitcoin, prompting investor caution.
Spot Bitcoin ETFs registered outflows of about $166.8 million over a recent two-day span. At the same time, crypto-market liquidations exceeded $386 million in a single 24-hour period, amplifying short-term price pressure.
At present, $76,000 is viewed by traders as a crucial support, while $80,000 remains a stubborn resistance area.
| Metric | Current Level | Peak Value | Key Support | Key Resistance |
|---|---|---|---|---|
| Bitcoin Price | $76,000 – $78,500 | $126,000 (Oct 2025) | $76,000 | $80,000 |
| ETF Outflow (2 days) | $166.8 million | N/A | N/A | N/A |
| Crypto Liquidations (24h) | $386 million | N/A | N/A | N/A |
US inflation data keeps Federal Reserve in spotlight
US producer prices climbed 0.4% in August, in line with consensus forecasts, while core PPI grew 0.2%, slightly below expectations. Energy costs were the biggest contributor, with a 4.2% month-on-month jump.
These figures arrive ahead of the Federal Reserve’s upcoming policy meeting scheduled for September 15-16. Market participants are now assigning a 70% probability to a rate hike next week, up from 62% before the release of PPI data, according to CME FedWatch Tool estimates.
However, a majority of economists surveyed by Reuters continue to anticipate that the Fed will keep rates unchanged.
The PPI results are being considered alongside updates to the methodologies for incorporating producer prices into the Federal Reserve’s preferred inflation gauge, the personal consumption expenditures (PCE) index.
With energy prices remaining elevated and inflation risks building, the Federal Reserve faces a careful balancing act as it assesses economic growth and labor market conditions before its next policy decision.
