NEW YORK, Sept 28 — US oil prices closed at their highest level in more than a year Wednesday on a mixed day for global equities as the dollar continued its upward climb.

The US futures benchmark, West Texas Intermediate for delivery in November, jumped 3.6 percent to US$93.68 per barrel as traders begin to eye US$100 oil.

The rise came on the heels of a surprising drop in US crude inventories. Oil prices have been trending higher following moves by Russia and Saudi Arabia to limit output.

Analysts cited the rise in crude prices as a drag on US equities, which opened higher, but finished mixed as oil prices surged and bond yields reversed.

“We’ve got a lot of trends going on in the background that are creating a difficult environment for investors — obviously rising interest rates to rising oil prices, and there is a stronger dollar,” said Jack Ablin, chief investment officer at Cresset Capital Management.

The broad-based S&P 500 ended flat, while the Dow inched lower and the Nasdaq notched modest gains.

Earlier, European stocks closed lower, while Asian markets had managed to rebound from heavy selling on both sides of the Atlantic on Tuesday.

More downside?

The Federal Reserve indicated last week that another rate increase could be in the cards before year’s end, while its boss Jerome Powell and other board members have said they could keep borrowing costs elevated for an extended period, with fewer cuts than hoped in 2024.

City Index analyst Fawad Razaqzada said equities were at risk of further losses.

“If anything, stock market investors have been slow to react to the macro risks compared to foreign exchange and bond markets. This means that there is more room to the downside,” he said.

The dollar added to gains seen as higher US bond yields make the greenback more attractive as a haven, putting further pressure on the euro and pound.

The US currency also struck an 11-month peak against the yen, sparking speculation of new Bank of Japan intervention into the foreign exchange market to keep its currency from falling further.

Traders are also keeping tabs on Washington, where a standoff between lawmakers over a budget bill threatens to cause a government shutdown, which Moody’s has warned could have a negative impact on the country’s credit rating.

Senators from both parties drafted a last-ditch short-term proposal Tuesday — with a September 30 deadline for a deal — that would keep the government running until November 17.

But there was no immediate indication that the warring factions of House Republicans, who are forcing a likely showdown over government funding, would take it up if passed in the Senate.

Key figures around 2040 GMT

New York - Dow: DOWN 0.2 per cent at 33,550.27 (close)

New York - S&P 500 FLAT at 4,274.51 (close)

New York - Nasdaq: UP 0.2 per cent at 13,092.85 (close)

London - FTSE 100: DOWN 0.4 per cent at 7,593.22 (close)

Frankfurt - DAX: DOWN 0.3 per cent at 15,217.45 (close)

Paris - CAC 40: FLAT at 7,071.79 (close)

EURO STOXX 50: UP 0.1 per cent at 4,131.68 (close)

Tokyo - Nikkei 225: UP 0.2 per cent at 32,371.90 (close)

Hong Kong - Hang Seng Index: UP 0.8 per cent at 17,611.87 (close)

Shanghai - Composite: UP 0.2 per cent at 3,107.32 (close)

Euro/dollar: DOWN at US$1.0502 from US$1.0572 on Tuesday

Pound/dollar: DOWN at US$1.2134 from US$1.2158

Dollar/yen: UP at ¥149.64 from ¥149.07

Euro/pound: DOWN at 86.54 pence from 86.95 pence

Brent North Sea crude: UP 2.8 per cent at US$96.55 per barrel

West Texas Intermediate: UP 3.6 per cent at US$93.68 per barrel

— AFP