Trump rules out an Iran strike before the midterms, and oil gives back only a slice

President Trump said on Thursday that the United States will not attack Iran before the November 3 elections. Oil dipped after he said it, and still closed sharply higher on the day. By Friday morning it had given back only a slice of that jump.

The strike talk came first. Late Wednesday, Trump told reporters the administration was considering renewed strikes before the vote, and a report the same day said the Pentagon was drawing up options. Thursday's session also had renewed attacks on tankers in the Strait of Hormuz, and Hurricane Isaias shutting wells in the Gulf of Mexico.

Just after noon Eastern time, he posted that talks with Tehran were "productive" and that there would be no attack before November 3. Brent fell back to $103. It still settled at $104.28, up $4.08, or 4.1%.

Friday's drop is the small one. Brent was at $103.06 a barrel at 6:51 a.m. Eastern time, down 1.2% from that close, giving back $1.22 of Thursday's $4.08 rise, in a move Reuters tied to Trump's comments. US crude was at $90.82, down 0.7%.

Before the US open, USO, a fund that holds crude-oil futures, was down 0.7%. XLE, a fund that holds large US energy companies, was down 0.8% after a 3.0% gain on Thursday.

Reduced supply supported Thursday's closing oil price. The US-Israeli conflict with Iran is in its eighth month, and Trump said the US blockade of Iranian ports would stay in force as tanker attacks in the Strait of Hormuz increased in October.

Hurricane Isaias also continued to have an impact on global supply. US offshore regulator the Marine Minerals Administration said Thursday that 1.28 million barrels a day of oil production had ceased in the Gulf of Mexico, or 62.9% of the region's output, due to the approaching storm. The agency says undamaged platforms will return only after inspections.

OpenAI fears eased

US stock funds were higher before Friday's market open. SPY, a fund that tracks the S&P 500 index of the US's biggest companies, was up 0.3%.QQQ, a fund that tracks the tech-focussed Nasdaq-100 index, was up 0.8% after falling 1.3% on Thursday.

That 1.3% drop followed a report that OpenAI's September revenue was running at almost $50 billion a year, $20 billion less than the company had signaled. People familiar with the figures later said OpenAI expects at least $70 billion by year-end. Bloomberg tied Friday's bounce to that year-end figure.

The other move before the open was in phone companies. SpaceX agreed on Thursday to buy a nationwide low-band spectrum license, which would let Starlink Mobile operate as a US phone carrier. AT&T, Verizon and T-Mobile were down between 5% and 6%, and Deutsche Telekom, which owns 54% of T-Mobile, was down 7% in Europe.

Consumers expect higher inflation

At 10 a.m. Eastern time, the University of Michigan publishes its preliminary October survey of consumers. September's final reading was 48.1; the consensus for October's preliminary reading is 47.6, in a broker preview from Admirals. May's 44.8 is the low, from the month the university said surging fuel prices hit household budgets.

Joanne Hsu, the survey's director, said in September that a resurgence in fuel prices had consumers expecting more pressure on their budgets. Year-ahead inflation expectations were 4.6%, up from 4.0% in August, the highest since June, the university said.

US gas prices were already higher when this survey was taken than they were in September, Admirals says. If that 4.6% climbs at 10 a.m., fuel is still pushing expected inflation higher.