Sign in Subscribe
Stocks

Oil Prices Plummet Amid Ceasefire Between Iran and Israel

Strategic Insights

— 1 min read

Oil prices sank for a second straight day, fueled by a ceasefire between Iran and Israel, while stock markets mostly rose as the conflict de-escalated, leading to a decline in the perceived threat to Middle Eastern oil supply routes. The US President's announcement of a ceasefire and his comments on China continuing to buy oil from Iran added to the relief. Meanwhile, US Federal Reserve Chair Jerome Powell's congressional testimony did not alleviate market expectations for interest rate cuts, causing the dollar to accelerate losses.

Key Takeaways:

  • Crude futures slumped for a second straight day after the US President announced a ceasefire between Iran and Israel, extending Monday's steep losses.
  • The main international and US oil contracts briefly bounced off their lows due to accusations of ceasefire breaches, but then resumed their fall after Trump's expletive-laced outburst.
  • Brent futures finished the day at $67.14, down nearly seven percent after dropping by a similar percent on Monday.
  • Energy was the only sector to fall sharply among the 11 S&P 500 sectors, with nine sectors firmly higher.
  • The dollar accelerated losses after Powell's testimony, failing to dampen market expectations for interest rate cuts.
  • Trump's comments added to the relief, suggesting China could continue to buy oil from Iran, while Powell's testimony left expectations for rate cuts unchanged.
  • The US Fed officials Christopher Waller and Michelle Bowman suggested policymakers could cut rates as early as July, but Powell declined to comment.

Statistics:

  • Brent futures dropped by nearly seven percent, finishing the day at $67.14.
  • The main international and US oil contracts briefly rebounded due to accusations of ceasefire breaches, but then resumed their fall.
  • The dollar accelerated losses, with the US Federal Reserve chair Jerome Powell's congressional testimony failing to alleviate market expectations for interest rate cuts.
  • 9 out of 10 S&P 500 sectors were higher, with only energy falling sharply due to the decline in oil prices.
  • US Federal Reserve officials Christopher Waller and Michelle Bowman suggested policymakers could cut rates as early as July, with Powell declining to comment.

Sources:

  • "Trade Nation"
  • "B. Riley Wealth"
  • "City Index and Forex.com"

Read more