Oil Prices Edge Higher as
US-Iran Strait of Hormuz Ceasefire Shows Signs of Holding
·
Oil
prices rose modestly on
Monday as markets assessed the stability of the fragile ceasefire between the United States and Iran in the Strait of Hormuz.
·
A US official said
Washington and Tehran had agreed to halt
attacks on commercial shipping through the Strait while
continuing negotiations under an existing memorandum of understanding.
·
Iran
has not officially confirmed
the reported agreement.
·
The
ceasefire had come under strain after:
o An Iranian
drone strike on a cargo vessel on Thursday.
o Subsequent US strikes on Iranian air defence sites and
military infrastructure.
o Iranian retaliatory missile and drone
attacks on US military
bases in Bahrain and Kuwait.
·
Shipping
activity through the Strait of Hormuz declined
steadily over the weekend due to security concerns.
·
Brent
crude for
September delivery rose more
than 1% to US$73–74
per barrel, remaining close to pre-war levels.
·
West
Texas Intermediate (WTI) crude
increased 1.5%
to around US$70 per barrel.
·
S&P
500 futures
indicated a gain of about 0.5%
ahead of US market opening.
·
Asian
markets were mixed:
o Taiwan's benchmark index gained about 1%.
o Hang Seng Index rose nearly 2%.
o KOSPI fell 0.2%.
·
Europe's
Stoxx 600
index remained broadly unchanged.
·
The
average US gasoline price
declined by one cent
to US$3.86 per gallon,
according to AAA.
·
Despite
the latest decline, gasoline prices remain about 30% higher than before the conflict.
·
The
average diesel price
eased to US$4.86 per
gallon, but is also nearly
30% above pre-war levels.
·
Analysts
noted that retail fuel
prices typically lag changes in crude oil prices by several
days.
Oil
prices edged higher on Monday as traders assessed the state of an uneasy
cease-fire in the Persian Gulf. An American official said the United States and
Iran had agreed to halt attacks in the Strait of Hormuz, raising hopes that the
hostilities of recent days may not escalate into a full resumption of war.
A
U.S. official, who spoke on the condition of anonymity to discuss ongoing
negotiations, said the United States and Iran had agreed to allow commercial
vessels to transit the strategic waterway while continuing talks on the
existing memorandum of understanding. Iran has yet to confirm the latest
agreement.
The
cease-fire had appeared to be unraveling after an
Iranian drone strike on a cargo ship on Thursday. The United States responded a
day later by targeting Iranian air-defense sites and
other military infrastructure. In turn, Iran’s Revolutionary Guards said they
had launched missiles and drones this weekend at a U.S. naval base in Bahrain
and an air base in Kuwait.
The
number of ships navigating the strait dropped steadily through the weekend.
Oil creeps higher.
·
The
price of Brent crude, the global benchmark for oil, rose over 1 percent on
Monday to between $73 and $74 a barrel for September delivery, the most
actively traded contract. Prices remain near prewar levels, where they returned
last week after a series of declines.
·
West
Texas Intermediate crude, the U.S. benchmark, rose 1.5 percent to around $70 a
barrel.
Stocks gain.
·
Futures
on the S&P 500 pointed to an increase of about half a percent when stocks
resume trading in the United States on Monday.
·
Stocks
in Asia, where countries import vast quantities of oil and gas, were mixed.
Shares in Taiwan were up 1 percent, while Hong Kong’s Hang Seng rose nearly 2
percent. South Korea’s benchmark KOSPI fell 0.2 percent.
·
In
Europe, the Stoxx 600, a broad index that tracks the region’s largest
companies, was flat.
Gasoline prices fall
slightly.
·
Gas
prices fell again on Monday, dropping by a penny to a national average of $3.86
a gallon, according to the AAA motor club. Still, gas prices have risen 30
percent since the war began.
·
Gas
prices don’t move in lock step with crude, usually trailing increases or drops
by a few days.
·
The
average price of diesel slipped to $4.86 per gallon on Monday, up nearly 30
percent since the start of the war.