Oil Plunges Amid Middle East Truce Hopes; Fed Leadership Transition Looms
Crude prices saw a sharp decline this week as Treasury yields fell, while markets anticipate key US inflation data and central bank commentary.
The story
Crude oil markets experienced significant volatility, with Brent and WTI crude prices falling sharply amidst reports of potential progress in US-Iran negotiations, which fueled hopes for easing Middle East tensions and disruptions to global energy supplies. Brent crude moved lower, while West Texas Intermediate also declined significantly. This downturn follows weeks of elevated prices driven by fears surrounding the Strait of Hormuz.
US Treasury yields retreated from recent highs, with the 10-year and 30-year notes seeing declines. This shift occurred as markets adjusted expectations around Federal Reserve policy, particularly following the confirmation of Kevin Warsh as the new Fed Chair, replacing Jerome Powell. Warsh inherits a backdrop of persistent inflation pressures, and the Fed's April FOMC minutes indicated a focus on inflation risks, with a notable divergence in the committee's vote.
Gold prices posted a modest gain this week, having recovered after an earlier slide. The precious metal found support as sentiment improved on reports of progress in US-Iran ceasefire negotiations and stabilizing bond yields. Gold's movement reflected its role as a defensive asset, with geopolitical uncertainty and shifts in the dollar's strength influencing its trajectory.
Energy and metals
In commodities, Brent Crude and WTI Crude both saw significant declines over the week, while Henry Hub Natural Gas experienced a notable rise. Gold posted a modest gain. Across currency markets, the US Dollar strengthened against the Argentine Peso, Indonesian Rupiah, and Brazilian Real. Conversely, the Dollar weakened against the South African Rand, Indian Rupee, and Chinese Yuan. Within the Treasury market, US 10-year and 30-year note yields moved lower, indicating a decline in longer-term borrowing costs, while the US 3-month T-Bill yield edged higher.
| Instrument | Now | 24h | 7d | MTD | YTD |
|---|---|---|---|---|---|
| Brent Crude | 91.49 USD/bbl | -2.4% | -11.6% | -19.8% | +50.4% |
| WTI Crude | 87.47 USD/bbl | -1.6% | -9.5% | -16.8% | +52.3% |
| TTF Natural Gas | 46.92 EUR/MWh | +1.1% | -5.0% | +2.0% | +66.6% |
| Henry Hub Natural Gas | 3.31 USD/MMBtu | +0.8% | +13.9% | +19.7% | -10.2% |
| Gold | 4,550.10 USD/oz | +1.1% | +0.6% | -1.4% | +5.2% |
Currencies vs the dollar
| Pair | Now | 24h | 7d | YTD |
|---|---|---|---|---|
| USD / CNY | 6.769 | -0.1% | -0.5% | -3.2% |
| USD / JPY | 159.241 | -0.2% | +0.1% | +1.8% |
| EUR / USD | 1.165 | +0.3% | +0.3% | -0.8% |
| USD / ARS | 1,409.000 | -0.2% | +1.4% | -2.9% |
| AUD / USD | 0.716 | +0.4% | +0.2% | +6.9% |
| USD / BRL | 5.044 | -0.6% | +0.5% | -7.9% |
| USD / CAD | 1.380 | -0.3% | +0.2% | +0.8% |
| GBP / USD | 1.343 | +0.1% | -0.0% | -0.3% |
| USD / IDR | 17,878.000 | +0.4% | +1.1% | +7.0% |
| USD / INR | 95.424 | -0.7% | -0.8% | +6.3% |
| USD / KRW | 1,508.080 | +0.3% | +0.2% | +4.9% |
| USD / MXN | 17.328 | -0.3% | +0.2% | -3.6% |
| USD / RUB | 71.190 | +0.4% | -0.0% | -10.4% |
| USD / SAR | 3.753 | +2.0% | +0.0% | +0.1% |
| USD / TRY | 45.887 | -0.0% | +0.4% | +6.8% |
| USD / ZAR | 16.225 | -0.9% | -1.3% | -2.2% |
US Treasury curve
| Maturity | Yield | Week | YTD |
|---|---|---|---|
| US 3M T-Bill | 3.590% | +1bp | +4bp |
| US 5Y Note | 4.160% | -10bp | +44bp |
| US 10Y Note | 4.455% | -13bp | +29bp |
| US 30Y Bond | 4.985% | -13bp | +14bp |
Central banks this week
Federal Reserve (Fed). Kevin Warsh confirmed as Chairman of the Board of Governors and Federal Open Market Committee.
Signaled a potential shift in the rate outlook, with markets beginning to price in a higher probability of a rate hike this year, despite Warsh's previous preference for cuts.
Federal Reserve (Fed). April FOMC minutes reinforced a steady policy stance but highlighted increased focus on persistent inflation risks.
Policymakers are comfortable holding rates, but the tone around inflation turned more cautious due to energy prices and geopolitical disruptions, suggesting a slower path back to 2% inflation.
European Central Bank (ECB). Held interest rates unchanged.
Amidst subdued growth and climbing Eurozone CPI, the ECB maintained its wait-and-see approach, with President Christine Lagarde's press conference closely watched for future guidance.
Bank of England (BoE). Held interest rates unchanged with an eight to one vote.
Concerns over the outlook for economic growth and inflation, driven by higher fuel costs and Middle East conflict, led the majority to hold rates, though some dissent for a hike was noted.
Bank of Japan (BoJ). Left its benchmark interest rate unchanged at 0.75% with a six to three vote.
The significant divide within the committee indicated internal debate, with Governor Ueda potentially signaling gradual tightening without aggressive action, as the yen remains under selling pressure.
Reserve Bank of New Zealand (RBNZ). Kept its Official Cash Rate unchanged at 2.25% but issued hawkish guidance.
An evenly split vote, decided by Governor Breman, avoided an immediate hike, but the RBNZ's forecast adjustments suggest a higher and sooner rate increase is anticipated by the market.
Reserves — who holds what, who is moving
Official sector gold flows saw several nations adding to their holdings, with Poland leading the acquisitions, followed by Uzbekistan and Kazakhstan. China and India also increased their gold reserves. Meanwhile, Turkey significantly reduced its gold holdings, and Russia also drew down its bullion. Among FX reserve holders, China maintains its position as the largest, with Japan and Switzerland following. These movements suggest a continued diversification by some central banks into gold, while others adjust their reserves, reflecting ongoing considerations regarding global economic stability and the role of the US Dollar.
Gold reserves — top 15 holders (tonnes)
| Country | Tonnes | Δ last reading | Ref |
|---|---|---|---|
| United States | 8,133.0 | — | 2026-03 |
| Germany | 3,350.0 | — | 2025-12 |
| Italy | 2,452.0 | — | 2026-03 |
| France | 2,437.0 | — | 2025-12 |
| China | 2,313.0 | +7.00 | 2026-03 |
| Russia | 2,305.0 | -22.00 | 2026-03 |
| Switzerland | 1,040.0 | — | 2025-12 |
| India | 881.0 | +1.00 | 2026-03 |
| Japan | 846.0 | — | 2026-03 |
| Netherlands | 612.0 | — | 2025-12 |
| Poland | 582.0 | +32.00 | 2026-03 |
| Turkey | 535.0 | -79.00 | 2026-03 |
| Euro Area | 507.0 | — | 2025-09 |
| Taiwan | 424.0 | — | 2025-12 |
| Uzbekistan | 416.0 | +26.00 | 2026-03 |
Biggest buyers
| Country | Change | Now |
|---|---|---|
| Poland | +32.00 t | 582.0 |
| Uzbekistan | +26.00 t | 416.0 |
| Azerbaijan | +15.00 t | 200.0 |
| Kazakhstan | +13.00 t | 354.0 |
| China | +7.00 t | 2,313.0 |
| Iraq | +6.00 t | 171.0 |
| Czech Republic | +5.03 t | 76.6 |
Biggest sellers
| Country | Change | Now |
|---|---|---|
| Turkey | -79.00 t | 535.0 |
| Russia | -22.00 t | 2,305.0 |
| Ghana | -18.46 t | 18.6 |
| Bulgaria | -1.89 t | 41.0 |
| Bolivia | -0.03 t | 22.5 |
| Chile | -0.02 t | 0.2 |
| Pakistan | +0.03 t | 64.8 |
FX reserves — top 15 (excluding gold)
| Country | Reserves USD | As of |
|---|---|---|
| China | $3,264.8B | 2024 |
| Japan | $1,159.7B | 2024 |
| Switzerland | $822.1B | 2024 |
| India | $569.5B | 2024 |
| Euro area | $546.0B | 2024 |
| Saudi Arabia | $436.8B | 2024 |
| Russian Federation | $412.7B | 2024 |
| Korea, Rep. | $409.5B | 2024 |
| Singapore | $365.5B | 2024 |
| Brazil | $318.9B | 2024 |
| United Arab Emirates | $231.7B | 2024 |
| United States | $227.8B | 2024 |
| Mexico | $221.9B | 2024 |
| Thailand | $217.3B | 2024 |
| Israel | $214.5B | 2024 |
Fuel + pump prices
| Fuel | Benchmark / pump | Driver + passthrough |
|---|---|---|
| Petrol (Gasoline) | London: 159.02 pence/litre (May 18, 2026); Delhi: ₹102.12/litre (May 29, 2026); New York: $4.574/gallon (May 28, 2026) | Retail petrol prices in India saw multiple hikes this month, reflecting elevated global crude oil prices and a weakening rupee, while UK and NYC prices showed minor fluctuations. |
| Diesel | London: 188.11 pence/litre (May 18, 2026); Delhi: ₹95.20/litre (May 29, 2026); New York: $5.902/gallon (May 28, 2026) | Diesel prices in Delhi increased significantly this month due to rising international oil prices, while London and New York experienced smaller changes. |
| LPG (Domestic) | Delhi: ₹913.00/14.2 kg cylinder (May 28, 2026); UK: GBP 0.97/litre (May 25, 2026) | Domestic LPG prices in India remained unchanged this month, while UK LPG prices saw a slight increase over the last week. |
| Jet Fuel | Singapore Jet Kerosene (Platts) spot market pricing | Jet fuel spot prices in Singapore are influenced by global crude oil trends and regional demand dynamics. |
| Marine Bunker Fuel | Singapore: VLSFO $794.50/MT, MGO 0.5%S $1105.00/MT, HFO 380 $636.00/MT (May 28, 2026) | Bunker fuel prices in Singapore experienced declines for VLSFO, MGO, and HFO, reflecting broader shifts in global oil markets. |
What we’ll be watching this week
- May 29: South Africa's Central Bank (SARB) Rate Announcement
- May 30: US April PCE Inflation (Core PCE)
- May 30: US Q1 GDP revision, Personal Consumption and Personal Spending
- May 30: Japan May Tokyo CPI
- May 30: US April New Home Sales
- June 2: China PMI data
- June 3: Australia CPI
- June 4: ECB Minutes from April Meeting
Markets, FX, reserves: fmd-data (). Central bank moves + fuel benchmarks + calendar: grounded via Google Search at publish time.