Oil Rallies Near $99 as Trump Hardline Stance Damps Iran De-escalation Hopes
By Martin Lam
Market Overview
WTI crude oil prices surged back toward $99.00 a barrel during early London trading on Thursday, recovering from previous session losses. This rebound was largely influenced by a prime-time address from US President Donald Trump, which intensified rhetoric regarding Iran and diminished hopes for a swift diplomatic resolution. Concurrently, Brent crude oil prices rose by 1.8% to reach $102.15 a barrel, reflecting the renewed concerns over escalation risks in the Strait of Hormuz.
Price Movements
As of 10:15 a.m. London time, WTI (CLc1) was trading up 2.4% at $98.92 a barrel, marking a significant recovery from a one-week low of approximately $92.50 reached during the previous New York session. The May contract had previously settled down 1.2% due to optimism surrounding de-escalation before Trump's speech reversed market sentiment. The spread between WTI and Brent narrowed to about $3.20 as concerns over Middle Eastern supply risks resurfaced.
Market Reactions
The rally in oil prices positively impacted energy equities, with the S&P 500 Energy Sector (SP500-45) increasing by 1.9% in pre-market trading, driven by gains in major companies like Exxon Mobil (XOM.N) and Chevron (CVX.N). Additionally, safe-haven assets such as gold (GCc1) remained stable near $4,800 an ounce, despite earlier intraday volatility. The US Dollar Index (DXY) also saw a 0.4% increase to 99.85, as renewed expectations for Federal Reserve rate hikes, prompted by inflationary pressures from rising oil prices, countered risk-off sentiment in the market.
Author Information
Martin Lam is the Chief Analyst for Asia Pacific at ATFX, bringing over 20 years of experience in global forex and investment markets. He holds a degree in Finance and Economics from Deakin University and has held senior positions at leading FX brokerage firms.