Introduction: Oil on track for steepest weekly drop in 3.5 months
Good morning, and welcome to our rolling coverage of business, the financial markets and the world economy.
The oil price is on track for its steepest weekly drop in three and a half months, as crude prices slide to a four-month low.
Predictions that the OPEC+ group will keep increasing oil output have pushed down energy prices in the last few days.
Brent crude, the international benchmark, has fallen 8% so far this week – from $70.13 per barrel last Friday night to $64.59 per barrel today, and yesterday hit its lowest level since 2 June.
OPEC+ are due to meet on Sunday, and could hike output further despite concerns that the oil market is already oversupplied.
Unicredit analysts says the alliance of oil producers is expected to approve a further 137,000b/d increase in output on Sunday.
This would extend “its gradual pivot from price defence to market-share expansion” Unicredit say, adding:
Talk of larger increases has surfaced, but these appear improbable. Quotas have risen by over 2.5mb/d since April, and Brent crude has largely hovered around USD 67/bbl in recent weeks, with geopolitical events – from Israeli strikes in Doha to Ukrainian drone attacks – having had only fleeting impacts on pricing. This suggests oil markets are predominantly shaped by structural dynamics.
Falling oil prices are boost for consumers, and many businesses, and might also reassure central bankers that inflationary pressures will ease.
JPMorgan analysts said in a note:
“We believe September marked a turning point, with the oil market now heading towards a sizeable surplus in Q4 2025 and into next year.”
The agenda
-
8.30am BST: UN FAO food price index
-
9am BST: Eurozone service sector PMI report for September
-
9.30am BST: UK service sector PMI report for September
-
9.30am BST: ONS: The impact of the motherhood penalty on monthly employee earnings and employment status in England
-
10.40am BST: ECB President Lagarde speaks at the Klaas Knot farewell symposium
-
2.20pm BST: Bank of England governor Andrew Bailey gives keynote speech at the Klaas Knott farewell symposium, ‘Macro-financial stability in a fragmenting world’
Key events
The eurozone economy expanded at its fastest rate in over a year in September, but growth remains muted, new data show.
The HCOB eurozone composite PMI output index, which tracks activity in the euro area private sector, has increased to 51.2 last month, from 51.0 in August. That shows a gradual acceleration in output growth, and is the highet reading since May 2024.
France’s stock market is having a good morning, with the CAC 40 index gaining 0.44%.
The rally comes after new French prime minister Sebastien Lecornu vowed to end a political deadlock and get a budget passed through parliament by the end of the year.
European stocks at record highs
European stocks are on track for their strongest week since May after rising this morning.
The pan-European Stoxx 600 index has risen by 0.4% this morning to hit a new record high, and has now gained 2.8% this week. That would be its biggest monthly rise since late April, when markets were recovering from the initial shock of Donald Trump’s trade wars.
Investor still seem to be in optimistic mood, despite the US government shutdown and persistent warnings that market valuations have risen too high.
Ipek Ozkardeskaya, senior analyst at Swissquote Bank, says:
Valuations are high, and some investors wonder whether this is another tech bubble. But a bubble – by definition – isn’t a bubble until it bursts.
That leaves global investors with an unbearable FOMO – fear of missing out on a further rally – which keeps valuations elevated. Prospects of multiple Federal Reserve (Fed) rate cuts in the coming months also help support risk assets.
Oil rising after fire breaks out at Chevron’s El Segundo refiner
Back in the oil market, prices are rising after a fire broke out earlier today at Chevron’s El Segundo refinery in Los Angeles.
The refinery is one of the largest on the US West Coast; according to a county official, the flames had been confined to one area.
California governor Gavin Newsom’s press office posted on X:
“Our office is coordinating with local and state agencies to … ensure public safety.”
Brent crude is now up 1% today at $64.71, suggesting concerns that the fire could disrupt supplies. But, it’s still on track for its biggest weekly fall since June.
Chevron have said that emergency responders from the city of El Segundo and Manhattan Beach are “actively responding to an isolated fire” inside the refinery.
Happily, the company has also said that “all refinery personnel and contractors have been accounted for and there are no injuries,” Reuters reports.
Wetherspoon’s boss vows to keep price rises to a minimum as he criticises energy bills
Mark Sweney
The boss of the pub chain Wetherspoon’s has vowed to keep price increases to a “minimum”, after blaming a beefed-up packaging tax and rising energy bills for extra costs.
Tim Martin said the recently introduced “extended producer responsibility” levy on packaging will lead to the company’s costs from the tax tripling from £800,000 to £2.4m a year.
Martin also criticised the impact of what he termed “non-commodity” energy costs – taxes or levies added to the pub chain’s bills for the electricity it uses – which he said will add £7m a year from this month.
More here:
No US jobs report expected today due to US shutdown
Today was due to be one of the more exciting days in the markets, with the publication of the latest US jobs report.
After two weak non-farm payroll reports in a row, September’s data would have given a good insight into whether the US labor market had continued to cool over the summer, as the Trump trade war hit the economy.
However, the US government shutdown means no official economic data is being released, so investors and news junkies will not get their NFP shot at 1.30pm UK time.
Democratic Senator Elizabeth Warren yesterday called for September’s jobs report to be released today, but there’s no sign yet that this will happen.
While that might make for a quieter Friday, it’s a blow to policymakers who are trying to read the economic runes. It could make it harder for America’s central bank, the Federal Reserve, to have confidence to keep cutting interest rates.
Stephen Innes, managing partner at SPI Asset Management, says the lack of jobs data, and inflation data, leaves the Fed trying to steer through fog with the radar switched off.
Innes adds:
For traders in Asia this morning and around the globe, the absence of NFP is a guilty relief—a rare first week Friday without the thunderclap risk of a headline payroll surprise.
The screens are quieter, the alerts still ping, but the heartbeats are slower. Some will take the early cut, step into the weekend before the next wave of OPEC headlines or AI hype rolls across the Pacific.
Others will watch the tape’s flicker and note the irony: when the market flies blind, risk can feel both safer and scarier at the same time.
RAC: Pump prices creep back up
Despite the downward pressure on the oil price in rcent months, drivers are facing rising prices at the pumps.
Motoring body the RAC has reported that petrol and diesel prices rose by around a penny a litre during September, even though crude prices were effectively flat during the month.
RAC Fuel Watch data shows that the average price of a litre of unleaded petrol went up from 134.64p to 135.41p (+0.77p) while diesel increased from 142.19p to 143.14p (+0.95p).
The RAC point out that fuel prices have risen in eight of the past 12 months but are still well below the highs seen in late February (when petrol hit a 12-month peak of 139.65p per litre).
RAC head of policy Simon Williams argues that price increases are unjustifiable:
“Sadly, pump prices crept up by a penny a litre in September reversing the drop drivers saw in August.
The fact prices have risen at all was made worse by the fact that there was little to no movement in the price of oil, or the pound-to-dollar exchange rate – the prime determiners of fuel prices – and therefore seemingly no justifiable reason for an increase.
Last week, the UK’s competition watchdog said it was “deeply concerned” by signs that companies have ramped up profits at the expense of consumers.
Williams says:
“It was also disappointing to have the Competition and Markets Authority confirm what we have known for some time that retailer margins remain above historic levels. We’re grateful for this level of scrutiny, but it appears yet to have had the effect on retailer behaviour we’d hoped it would.
The comparison with average prices and margins in Northern Ireland makes the point that it is possible to sell fuel more cheaply and still make money.
Introduction: Oil on track for steepest weekly drop in 3.5 months
Good morning, and welcome to our rolling coverage of business, the financial markets and the world economy.
The oil price is on track for its steepest weekly drop in three and a half months, as crude prices slide to a four-month low.
Predictions that the OPEC+ group will keep increasing oil output have pushed down energy prices in the last few days.
Brent crude, the international benchmark, has fallen 8% so far this week – from $70.13 per barrel last Friday night to $64.59 per barrel today, and yesterday hit its lowest level since 2 June.
OPEC+ are due to meet on Sunday, and could hike output further despite concerns that the oil market is already oversupplied.
Unicredit analysts says the alliance of oil producers is expected to approve a further 137,000b/d increase in output on Sunday.
This would extend “its gradual pivot from price defence to market-share expansion” Unicredit say, adding:
Talk of larger increases has surfaced, but these appear improbable. Quotas have risen by over 2.5mb/d since April, and Brent crude has largely hovered around USD 67/bbl in recent weeks, with geopolitical events – from Israeli strikes in Doha to Ukrainian drone attacks – having had only fleeting impacts on pricing. This suggests oil markets are predominantly shaped by structural dynamics.
Falling oil prices are boost for consumers, and many businesses, and might also reassure central bankers that inflationary pressures will ease.
JPMorgan analysts said in a note:
“We believe September marked a turning point, with the oil market now heading towards a sizeable surplus in Q4 2025 and into next year.”
The agenda
-
8.30am BST: UN FAO food price index
-
9am BST: Eurozone service sector PMI report for September
-
9.30am BST: UK service sector PMI report for September
-
9.30am BST: ONS: The impact of the motherhood penalty on monthly employee earnings and employment status in England
-
10.40am BST: ECB President Lagarde speaks at the Klaas Knot farewell symposium
-
2.20pm BST: Bank of England governor Andrew Bailey gives keynote speech at the Klaas Knott farewell symposium, ‘Macro-financial stability in a fragmenting world’
