OIL prices extended their longest losing streak in six sessions on Wednesday, with Brent crude falling below US$99 a barrel as renewed US-Iran talks and efforts to restore Saudi Arabia’s East-West pipeline raised hopes of improved oil supplies.
US President Donald Trump said officials had a “very productive” meeting with Iranian envoys, while indicating he was weighing whether to pursue a negotiated agreement or “annihilate the Islamic Republic.”
Trump is also expected to meet other Persian Gulf leaders later this week.
A senior Iranian government official said Tehran had conveyed a proposal to Washington under which Iran would reopen the Strait of Hormuz within seven days if the United States took steps towards lifting a blockade that has severely curtailed Iranian oil exports.
Saudi Arabia, meanwhile, is seeking to restore operations on its vital East-West pipeline in the coming days, potentially allowing the kingdom to resume using an alternative export route that bypasses the Strait of Hormuz. The pipeline’s planned reopening has added to expectations of improved supply flows.
The oil decline has also eased some inflation concerns, although the US dollar remained firm as hawkish comments from Federal Reserve officials strengthened expectations of further interest rate increases.
The US dollar index held around 100.5 on Wednesday, close to an eight-week high, after Richmond Fed President Tom Barkin warned that inflationary shocks could take time to fade and risk becoming entrenched.
Boston Fed President Susan Collins said in a LinkedIn post that she supported last week’s rate hike amid concerns that inflation could remain above the Fed’s 2% target.
Markets are pricing in roughly a 54% probability of another Fed rate increase in October.
Chicago Fed President Austan Goolsbee also said inflation risks remained elevated amid supply shocks and increased spending linked to artificial intelligence investment, while St Louis Fed President Alberto Musalem backed a front-loaded approach to gradual monetary tightening.
Further comments from Fed officials, including Fed Vice Chair Philip Jefferson and New York Fed President John Williams, will be watched for clues on the central bank’s rate path.
The dollar had previously tracked oil prices closely as higher energy costs fuel inflation expectations and increase pressure on central banks to maintain tighter monetary policy. Its resilience as oil prices fall reflects the competing influence of expectations for further US rate increases.
Markets will also focus on US purchasing managers’ indices, further Federal Reserve commentary, durable goods data and University of Michigan sentiment data later this week.
Investors will meanwhile monitor developments around the United Nations General Assembly in New York, including Trump’s planned meetings with Chinese President Xi Jinping and Gulf leaders.
Meanwhile, the Malaysian ringgit weakened 0.17% against the US dollar to 4.0680 on Wednesday, extending its decline over the past month to 0.63%.
Despite the recent weakness, the ringgit remains 3.32% stronger against the US dollar compared with a year ago.
Looking ahead, the US dollar-Malaysian ringgit exchange rate is forecast at 4.07991 by the end of the quarter and 4.01066 in one year, analysts say - September 23, 2026
