Brent crude started September trading at $77.5/bbl before falling to below $74/bbl due to weak fuel demand from leading importer China, alongside rising supply with OPEC’s plan to increase production in Q4. However, the group later decided to postpone a planned oil output increase of 180,000 barrels per day, helping oil prices to recover slightly. Exacerbated concerns of slowing demand caused Brent crude to fall to almost $69/bbl, its lowest level since December 2021, as OPEC reduced its global demand growth forecast for 2024. Meanwhile, Hurricane Francine significantly disrupted the oil industry in September, putting US Gulf Coast supply at risk. Estimates suggested that the hurricane impacted 730,000 barrels per day of production in the US Gulf Coast, overshadowing consistent demand concerns. As a result, oil prices rebounded to $73/bbl by mid-month. Although refining activities resumed, 12% of crude production was still offline in the US Gulf of Mexico on the 16th September. Furthermore, geopolitical tensions rose as thousands of pagers exploded in Lebanon, after Israel concealed explosives inside batteries of pagers sold to Hezbollah in a highly sophisticated attack. Additionally, Israeli strikes on Lebanon saw the deadliest attack since the 2006 Israel-Hezbollah war, and Brent crude reached $75/bbl. Towards month-end, Libyan production eased, and OPEC reportedly planned to uplift production in December. Finally, risk sentiment in the Middle East remained high, and Israeli strikes targeted Beirut, killing long-time leader Hassan Nasrallah. Overall, Brent crude fell by around $5 throughout September as a weak demand outlook and easing supply concerns outweighed Middle East tensions, closing the month at $72.4/bbl.

After a strong performance in August, GBP started September around its highest level since March 2022 at $1.315 against USD, as expectations of diverging monetary policies between the US and UK continued to support the pound. For instance, investors expected the Bank of England to maintain a cautious stance due to stronger UK economic data, whereas the US Federal Reserve considered the prospect of implementing interest rate cuts. Further data released in September indicated some resilience in the employment market, continuing to support the central bank’s more hawkish policy. However, economic data revealed that GDP stalled for a second month in July, below forecasts of a 0.2% increase, causing GBP to depreciate to below $1.31 by mid-month. In the September meeting, the Bank of England opted to maintain interest rates at 5% as expected, and the US Federal Reserve cut interest rates by 50 basis points. These monetary policy decisions pressured the dollar and caused GBP to surge to $1.334, the highest since February 2022. Inflationary data showed that UK inflation remained above the central bank’s 2% target, implying that the Bank of England would remain cautious regarding lowering rates. A strong economy was also indicated at the end of the month, growing by 0.5% from Q1 to Q2, causing the pound to close September at $1.339 against USD.

Unsurprisingly, escalating tensions in the Middle East dominated global energy news headlines in September. After almost a year since the conflict between Israel and Hamas began, the war raged on with no sign of a permanent ceasefire in the near future. Israel attacks on Lebanon surged, as Israeli Prime Minister Benjamin Netanyahu pledged to defeat Hezbollah. The Israel-Hezbollah conflict saw its heaviest day of casualties in the past year, killing 274 by airstrikes and causing thousands more to flee the country. Towards the end of the month, Israel conducted a powerful airstrike in Beirut, killing Hezbollah leader Sayyed Hassan Nasrallah. The world awaits a response from the Lebanese militant group, with Hezbollah’s deputy chief Naim Qassem warning that its fighters are “ready for the enemy”. In the Russia-Ukraine war, tensions were heightened after President Vladimir Putin warned the west that Russia could use nuclear weapons if it was struck with conventional missiles. Meanwhile, President Zelensky and President Trump met to discuss the ongoing war, with the US President pledging to ‘quickly resolve’ the war should he win the upcoming election.