European stocks dipped slightly on Wednesday as investors monitored reports of a potential increase in oil supplies, alongside ongoing developments in the conflict with Iran.
The pan European STOXX 600 index fell by about 0.5%, the German DAX declined 1.0%, the French CAC 40 dropped roughly 0.9%, and the U.K.’s FTSE 100 slipped 0.6%.
European equities were influenced by movements in Asian markets, reacting to a Wall Street Journal report indicating that the International Energy Agency (IEA) is considering the largest-ever release from its oil reserves in an effort to curb rising crude prices.
This report provided some relief to markets under pressure from sharp oil price fluctuations, as global Brent crude trades near $90 per barrel after approaching $120 earlier in the week. Brent futures rose about 2.2% to $89.75 per barrel, while U.S. West Texas Intermediate (WTI) futures also gained 2.2% to $85.33 per barrel.
Meanwhile, tensions with Iran remain ongoing. The U.S. and Israel have exchanged airstrikes with Iran across various parts of the Middle East, while Iranian security forces have signaled their readiness to respond firmly to any domestic unrest.
Global markets are betting that U.S. President Donald Trump may seek a swift resolution to military operations, though he has warned of strikes on Iran if Tehran attempts to disrupt oil flows through the strategic Strait of Hormuz, which handles about one-fifth of global crude supplies.
Elsewhere, European investors are evaluating new inflation data from Germany, which showed consumer prices accelerating in line with EU standards on a monthly basis in February, as expected.
Market participants are also awaiting U.S. inflation data later, with economists forecasting a year-on-year Consumer Price Index (CPI) rise of 2.4% for the twelve months ending in February, alongside a monthly increase of approximately 0.3%.
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