Brent crude dips below US$100/barrel as Trump mulls Iran deal or annihilation

Brent crude oil prices dropped below US$100 a barrel as US President Donald Trump said talks with Iran on the sidelines of the United Nations General Assembly went well, even as he told the gathering of world leaders that if a deal wasn’t reached, the Islamic Republic faced annihilation.

US and European stock markets were mixed, with the tech-heavy Nasdaq Composite rallying on the cheaper energy with the likes of Nvidia, Intel and Advanced Micro Devices extending gains, while financial firms such as JPMorgan Chase & Co and American Express weighed on the Dow Jones Industrial Average.

OpenAI reportedly plans to get third parties to check its artificial intelligence models as a new safety assurance, while Anthropic launched a new version of Claude that it said was cheaper and more powerful than its previous iterations, while SpaceXAI’s Grok Bot attracted more than 400,000 users since its launch a month ago.

And Australian futures are pointing to a positive start to the day for the ASX, with KMD Brands due to report its annual result, which is also expected to reveal the outcome of the retailer’s strategic review.

Carrot and stick

Brent crude oil futures fell 0.9% to US$99.42/barrel at 7am in Auckland as supply concerns eased amid reports that Saudi Arabia was testing the damaged East-West pipeline bypassing the Strait of Hormuz, stoking optimism that fuel could start moving next week.

Meanwhile, US President Trump said officials held good talks with their Iranian counterparts, before telling the UN General Assembly that he faced a choice of cutting a deal with the Islamic Republic or annihilating it quickly. Trump said he expected a deal to come soon after the November mid-term elections, noting Iran was waiting to see how he did in the vote.

“Oil prices are slightly lower amid positive vibes around the Middle East conflict,” Bank of New Zealand senior markets strategist Jason Wong said in a note. “There were plenty of headlines overnight on diplomatic efforts to reach a deal between the US and Iran.”

The kiwi dollar touched fresh multi-year lows after Reserve Bank of New Zealand governor Anna Breman said if higher oil prices persisted, that would keep inflation running at a hotter pace than the central bank predicted in its September forecast. The kiwi traded at 57.24 US cents at 7am from 57.36 cents yesterday.

BNZ’s Wong said the comments provided mixed messages, and followed the critical review of the Reserve Bank’s mistakes during the covid-19 pandemic.

“A key conclusion of the review was that greater emphasis should be placed on real interest rates when assessing and communicating the stance of monetary policy, while near-term inflation developments should receive greater focus,” Wong said.

Mixed measures

Stocks on Wall Street were mixed, with the Dow falling 0.3% while the S&P 500 was marginally stronger.

Tech stocks extended their gains with optimism about the AI trade persisting after Meta’s new Muse model was well-received while Alibaba released a new AI chip that it said was China’s most powerful.

Meanwhile, Bloomberg reported that OpenAI planned to let external organisations test the safety of its models as part of the push to introduce more guardrails for the technology, while Reuters reported the former head of trust and safety at Google, Tom Siegel, said AI posed an even greater threat of harming children than social media.

Anthropic launched Claude Opus 5.5, which it said was its most powerful model to date, and was cheaper than its predecessors, while Bloomberg reported that SpaceXAI’s Grok Bot hit 418,000 users, with uptake growing at a rapid clip since its launch a month ago.

Across the Atlantic, stock markets were mixed with the UK’s FTSE 100 slipping 0.3%, while Germany’s DAX was marginally higher and France’s CAC 40 increased 0.2%.

Australian futures are pointing to a 0.3% gain for the S&P/ASX 200 index when trading opens across the Tasman.

KMD Brands is due to report its annual result today, which is expected to show earnings growth from a recovery in the Kathmandu unit. The retailer is expected to provide details on the business review flagged earlier this year, with investors uneasy about the company’s increased net debt.

No local data are due today, while Genesis Energy goes ex-dividend and Livestock Improvement Corp holds its annual meeting in Invercargill.

Reporting by Paul McBeth. Image from Nils Huenerfuerst on Unsplash.