Brent crude climbed above $100 a barrel Wednesday, its first time since July, as Morgan Stanley warned that higher oil prices and interest rates remain the main near-term risks to stocks. Analysts led by chief U.S. equity strategist Mike Wilson noted that strategic petroleum reserves have already been substantially drawn down. S&P 500 futures fell about 0.4% early Wednesday. Wilson had previously cautioned that rising crude tends to hurt stocks more than falling prices help them, and another spike could squeeze corporate margins and push yields higher, with high-beta growth stocks particularly exposed. Goldman Sachs estimates every $10 increase in oil adds about 0.2 percentage points to headline inflation. Exxon Mobil has gained about 33% this year through Tuesday, while Chevron is up roughly 38%. Morgan Stanley commodities strategist Martijn Rats forecast Brent would average $100 in the fourth quarter, noting that oil held at sea has fallen roughly 190 million barrels since mid-July and global onshore crude inventories fell another 38 million barrels. Vitol CEO Russell Hardy said the bigger squeeze is in refined fuels, with stockpiles "pretty much at the bottom." Meanwhile, prediction-market traders see a 74% chance of a U.S.-Iran ceasefire by Sept. 30, but only a 2% chance that Strait of Hormuz traffic normalizes this month, leaving investors with an awkward split between a potential crude drop and persistent supply disruption.
Goldman Sachs Group Inc
Morgan Stanley
Chevron Corp
Exxon Mobil Corp