Reserves add a little light relief
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Why did oil prices drop below $100 after the G7 hinted at using strategic reserves?
Well, oil prices have fallen back down below $100 after a massive rise yesterday. Why? Well, because G7 nations are talking about dipping into their oil reserves. But it's only a temporary solution, and if the war drags on, they can't keep doing that. So after a fairly harsh response early in the session, is yesterday's bounce back a little premature? And why is the Aussie holding its own? Good to be a commodity currency, I suppose. It's Tuesday. It's the tenth of March twenty twenty six. It's the morning call from Nab. Good morning. Well, oil has certainly been on a bit of a journey over the past twenty four hours. Brent is up four point three percent now, but it stopped short of a hundred and twenty dollars a barrel.
Now it's back down below a hundred. It's the same story for WTI. It's up six point eight percent on the day, but that's after heading up to a hundred and twenty dollars as well, then back down uh to a little over ninety-five now. Spot gold is down again as well since the crisis started. It's fallen over four percent, which seems a little counter. Intuitive. Stocks are down again, none more so than Japan. The Nikai was down over 5% yesterday, and we had that 2.8% fall in the ASX 200. Maybe that'll bounce back a bit because the falls overseas are nowhere near as extreme right now. So we've got a 0.6% fall in the Eurostocks 50, a 0.8% drop in the DAX, the SP and Nasdaq down about a quarter percent. The US dollar climbed 0.4% in this session, but lost.
Most of those gains, still climbing, but not by much.
How are global equity markets reacting to the recent oil price swing?
The Aussie dollar is also slightly up at just under seventy point four US cents. The falls are in Europe down naught point three per cent for the euro, and the UK pound down a quarter per cent, the yen also down naught point three per cent. And movements in bond yields have calmed down as well. So ten year treasury yields are down just one basis point to four point one three per cent, one or two points lower across much of Europe, except the UK ten year guilt's up two up two basis points. Uh Australian ten years were up nine basis points yesterday to four point nine three percent. Now on futures they are four basis points lower than that. So now Sally Old joins me. Um the Middle East obviously lurching from bad to worse in terms of the news.
The major news yesterday obviously was that the son of the assassinated Ayatollah is the new Ayatollah, and by all accounts is just as extreme. Uh yeah markets seem to have calmed down a bit overnight, aren't they? I mean and oil coming back down. I guess that's because of this story about the G seven releasing their reserves, or saying that they will release their reserves.
Yeah, that's right. Good morning, Phil. So it was a a pretty brutal session yesterday in the day, um, across Asia Pacific, as you mentioned, some really large moves, led by uh a very sharp rally in Brent, but then big declines on equity markets and um, you know, really big moves in Bond yields higher over the course of the day. But just basically in the early evening there was a press release basically saying that G7 finance ministers said that they were ready to take any steps needed to support global energy supply, and that would include releasing strategic oil reserves. And so that I think really helped uh calm markets down overnight as you said, so oil came back down, currently trading When the Brent uh futures below a hundred dollars a barrel, uh bond markets rallied and equity markets are still in the red, but the magnitude of those moves uh is is much lower than some of the
But it's a short term fix, isn't it? If this thing drags on, so they're talking about maybe three or four hundred million barrels, which is about a third of the total reserve. So you can only do it three times and then you've depleted your resources, which just makes things worse. And you know, we're chewing up about a hundred million barrels a day. So uh, you know, it's not gonna last long. So I I mean i uh like everything, all of this depends on how long does this go on for, but it's not I mean, it's not looking like it's gonna disappear quickly, is it?
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Chapters
8 chapters
1
Why did oil prices drop below $100 after the G7 hinted at using strategic reserves?
0:01–1:25
2
How are global equity markets reacting to the recent oil price swing?
1:25–4:05
3
What are the short‑term effects of the G7’s reserve release on bond yields and the Australian dollar?
4:05–7:37
4
Why is the relief from strategic reserves considered only temporary?
7:37–11:22
5
How could a prolonged conflict and a blocked Strait of Hormuz impact inflation in Australia?
11:22–14:07
6
What are central banks likely to do as oil‑driven inflation pressures rise?
14:07–16:04
7
Why is the Australian dollar holding up despite global risk and higher oil prices?
16:04–16:14
8
What data and surveys will shape the outlook for Australian businesses and consumers this week?
16:14–16:15