The price of crude oil fell to a five‑week low on Wednesday after reports that a potential US‑Iran agreement could lead to the reopening of shipping through the Strait of Hormuz.
Brent crude (spot price) fell $3.60 to $95.98 a barrel, whilst WTI crude was similarly down $3.75 to just over $90 a barrel.
Axel Rudolph, chief technical analyst at IG, argues that hopes of easing Middle East tensions have reduced fears of a major energy disruption, providing some relief to markets and central banks while investors remain cautious until concrete details emerge.
“Reports that a potential US‑Iran agreement could reopen Strait of Hormuz shipping eased fears of major energy disruption, offering relief to markets and central banks, though investors remain cautious pending concrete details," Rudolph commented.
Besides the geopolitics, it comes against a sprinkling of economic and US market signals, including S 30‑year mortgage rates rising to nine‑month highs amid high energy costs, gold sliding to a near two‑month low.
