Oil prices fall and U.S. stocks rebound as transit through the Strait of Hormuz resumes
With crude oil supplies through the Strait of Hormuz resuming, international oil prices fell to prewar levels, and major stock markets, including those in the United States, rebounded from 6 month 18 to 19 day. The International Energy Agency (IEA) raised concerns about oversupply, while earlier, on 6 month 17 day, oil prices rose 1% amid uncertainty over an agreement.
As crude oil supplies through the Strait of Hormuz resumed, international oil prices fell to prewar levels. This change was immediately reflected in the markets on 6 month 18 day and 19 day.
The resumption of transit through the strait was reportedly the result of the restoration of the physical flow of crude oil. The recovery in supply put downward pressure on oil prices.
The International Energy Agency (IEA) raised concerns about oversupply amid the supply recovery. The IEA's warning acts as an additional downward factor for prices.
Conversely, 6month 17day, uncertainty over an agreement between the United States and Iran grew, and oil prices were recorded as rising by 1%. Market sentiment fluctuated over a short period.
Major U.S. indexes 6month 18–19day generally closed higher. The decline in oil prices was seen as having a positive effect on risk assets.
Former President Trump warned that an agreement with Iran was linked to market volatility and that the war risked causing a “catastrophe.” His remarks heightened the market’s perception of political risk.
Markets continue to simultaneously monitor the resumption of supply and geopolitical risks. The possibility remains that additional announcements from the IEA and individual countries could affect the direction of oil prices.
Sources: Reuters,Seeking Alpha Market News,Investing.com News
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