Gotrade News - Oil prices swung on Tuesday as fresh US strikes near the Strait of Hormuz collided with Iran peace deal optimism. Brent crude climbed more than 1% to $97.32 a barrel after sliding 7% in the prior session on negotiation hopes.
The push-pull narrative kept traders cautious as equity futures advanced and gold drifted lower in early Asian trading. Safe-haven demand steadied the dollar while risk assets leaned positive on diplomatic progress.
Key Takeaways
- Brent rebounded above $97 after a 7% Monday drop tied to Iran peace talks.
- US strikes near Hormuz revived supply risk despite ongoing Doha negotiations.
- Gold slipped 0.5% to $4,545.90 as inflation fears eased on deal hopes.
Oil Reaction to Hormuz Risk
According to Investing.com, US forces struck boats laying mines and missile sites in southern Iran. Officials described the action as defensive, but the strikes punctured a fragile ceasefire narrative.
Iran's foreign minister met Qatar's prime minister in Doha to advance a framework deal. Reports suggest the Strait of Hormuz could reopen roughly 30 days after any agreement is finalized.
The intraday whiplash hit oil proxies hard, with the United States Oil ETF (USO) tracking the underlying crude moves. Producers including Exxon Mobil (XOM) remained sensitive to every Hormuz headline.
Brent's prior 7% slide reflected genuine optimism on sanctions relief and tanker flow normalization. The Tuesday rebound shows traders are unwilling to fully price in a deal that remains unsigned.
Safe-Haven Bid Reasserts
As reported by Investing.com, President Trump said talks with Tehran were proceeding nicely on a Hormuz memorandum. He added there was no rush to finalize, tempering immediate market enthusiasm.
S&P 500 futures rose 0.68% while Nasdaq 100 futures gained 0.9% in overnight trade. Dow futures advanced 0.6% as Memorial Day holiday liquidity returned to US screens.
Gold eased 0.5% to $4,545.90 an ounce as deal progress trimmed inflation hedging demand. The SPDR Gold Shares (GLD) ETF tracks bullion's modest pullback from recent highs.
The dollar held firm below six-week highs as competing flows balanced safe-haven and risk-on demand. Euro and sterling slipped marginally against the greenback in muted Asian trade.
Commonwealth Bank strategist Joseph Capurso voiced market skepticism on the talks. He said traders keep hearing a deal is near, but the actual contours remain unclear to participants.
Iranian officials flagged unresolved issues around sanctions relief and shipping restrictions in the draft framework. Those gaps explain why crude can rally 1% even as equity futures push higher.
This week's personal consumption expenditures data Thursday remains the next major macro catalyst. Investors want fresh inflation signals to gauge Federal Reserve policy direction into summer.
The push-pull between diplomacy and military escalation should keep volatility elevated. Energy traders are positioning for headline-driven swings rather than directional conviction.
