Oil Falls, Asian Stocks Mixed Ahead of Fed Rate Decision

By Megan Cheah

Oil declined but remained near multimonth highs, while Treasury yields stayed elevated as investors weighed the risk of a prolonged oil shock ahead of the Federal Reserve's rate decision. Asian equities were mixed.

Crude prices fell in early trade Wednesday, likely reflecting technical repositioning amid a strong dollar and elevated bond yields.

The Fed is widely expected to raise its benchmark rate for the first time since 2023. Markets are heavily pricing in a 25-basis-point increase, said Commonwealth Bank of Australia's Harry Ottley, in line with the bank's view.

Oil had surged in recent sessions as the Middle East conflict disrupted supplies. The closure of Saudi Arabia's East-West pipeline and Houthi threats to Red Sea shipping continue to pose further risks, while U.S.-Iran tensions remain high.

Saudi Arabia is trying to resume partial operations within days on the 750-mile pipeline, which allows exports to bypass the Strait of Hormuz, The Wall Street Journal reported. Damaged pumping stations could take six to eight weeks to fully repair.

The country's oil exporter is also reportedly delaying shipments to some European customers following attacks on the pipeline, forcing refiners to seek replacement cargoes, UOB Global Economics & Markets Research said in a note.

Crude oil is supported by geopolitical risks and physical supply disruptions, said Antonio Di Giacomo, senior market analyst at XS.com.

"As long as Brent remains around $109 and [West Texas Intermediate] stays above $106, the bias could remain bullish, particularly if repairs in Saudi Arabia take several weeks or additional disruptions emerge," he said.

Front-month WTI crude-oil futures fell 0.7% to $105.09 a barrel, while Brent dropped 0.3% to $108.42 a barrel.

Asian equities traded mixed. Japan's Nikkei Stock Average declined 0.1%, while Hong Kong's Hang Seng Index dropped 0.3%. China's Shanghai Composite Index fell 0.5%. South Korea's Kospi rose 0.15%, while Singapore's FTSE Straits Times Index gained 0.3%.

Rate-increase expectations also weighed on gold. Spot prices were last down 0.2% at $4,284.85 a troy ounce. Higher interest rates typically reduce the appeal of the nonyielding metal.

Write to Megan Cheah at megan.cheah@wsj.com

(END) Dow Jones Newswires

September 15, 2026 22:34 ET (02:34 GMT)