Oil prices plunge as Trump announces shaky ceasefire between Iran and Israel

The Citizen

5 hours ago

Prices were also brought down by Trump saying that China could continue to buy oil from Iran.
Oil prices sank and stock markets rose Tuesday as US President Donald Trump said a ceasefire between Iran and Israel was taking hold after he berated both countries for violating the truce.
In volatile trading, crude futures slumped more than five percent after Trump announced a ceasefire.
'This morning's ceasefire further reduced the perceived threat to Middle Eastern oil supply routes,' said David Morrison, analyst at Trade Nation.
The main international and US contracts reduced their losses later as Israel and Iran accused each other of breaking the ceasefire.
Trump's remarks rattle oil markets
But prices fell again around five percent after Trump declared the ceasefire was in effect after berating the two countries in an expletive-laced outburst.
Iran's President Masoud Pezeshkian said later his country will respect a ceasefire if Israel also upholds its terms, while Israel said it refrained from further strikes after a phone call between Trump and Prime Minister Benjamin Netanyahu.
China exception adds downward pressure
Prices were also brought down by Trump saying that China could continue to buy oil from Iran, in what appeared to be relief for Tehran from sanctions Washington has previously imposed.
Prices had already fallen by more than seven percent on Monday after Iran's response to US strikes on its nuclear facilities was limited to missile launches on a US military base in Qatar.
There was also relief that Iran has refrained from closing the strategic Strait of Hormuz, a chokepoint for about one-fifth of the world's oil supply.
Wall Street extended gains at the open on Tuesday.
Paris and Frankfurt were sharply higher in afternoon deals but London's gains were limited as shares in oil majors Shell and BP fell on the lower crude prices.
Asian markets closed higher.
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The dollar retreated against other major currencies.
Focus back on Trump tariffs
Escalating tensions in the Middle East has removed some focus from Trump's tariffs war, which threatens to dampen global economic growth.
'With the immediate geopolitical tensions dialled down, investors are free to focus on President Trump's trade war and the first tariff deadline coming up in a couple of weeks,' Morrison said.
'As far as investors are concerned, they've just stared down the prospect of World War Three, so they're not going to be fussed by a few percentage points on US imports,' he added.
Several countries face steep tariffs if they fail to reach deals with the United States by July 9, with duties of 50 percent looming large over the European Union.
Fawad Razaqzada, analyst at City Index and Forex.com, said investors were 'now shifting their attention' to Federal Reserve Chairman Jerome Powell's testimony in Congress later Tuesday.
Powell was due to tell Congress that the central bank can afford to wait for the impact of Trump's global tariffs before deciding on further interest rate cuts, according to his prepared remarks.
'For the time being, we are well positioned to wait to learn more about the likely course of the economy before considering any adjustments to our policy stance,' he said.
ALSO READ: Trump says wants 'real end' to Israel-Iran conflict, not ceasefire
Key figures at around 1335 GMT
Brent North Sea Crude: DOWN 5.2 percent at $66.85 per barrel
West Texas Intermediate: DOWN 5.2 percent at $64.93 per barrel
New York – Dow: UP 0.8 percent at 42,904.31 points
New York – S&P 500: UP 0.8 percent at 6,070.59
New York – Nasdaq Composite: UP 1.1 percent at 19,839.12
London – FTSE 100: UP 0.2 percent at 8,773.12
Paris – CAC 40: UP 1.2 percent at 7,631.36
Frankfurt – DAX: UP 1.6 percent at 23,637.76
Tokyo – Nikkei 225: UP 1.1 percent at 38,790.56 (close)
Hong Kong – Hang Seng Index: UP 2.1 percent at 24,177.07 (close)
Shanghai – Composite: UP 1.2 percent at 3,420.57 (close)
Euro/dollar: UP at $1.1589 from $1.1581 on Monday
Pound/dollar: UP at $1.3597 from $1.3526
Dollar/yen: DOWN at 145.04 yen from 146.12 yen
Euro/pound: DOWN at 85.24 pence from 85.60 pence
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