Oil prices ease slightly after hitting highs as U.S.-Iran talks stall – National

Oil futures fell early Thursday while Wall Street rose even as stalled U.S.-Iran talks raised doubts over the reopening of the Strait of Hormuz and a permanent end to the Iran war.

U.S. markets ticked higher before the bell with some of the country’s biggest technology companies posting first quarter earns this week.

Futures for the S&P 500 rose 0.4 per cent before the opening bell, while futures for the Dow Jones Industrial Average rose 0.6 per cent. Nasdaq futures gained 0.5 per cent.

Brent crude to be delivered in June slid $1.93 overnight to $108.51 per barrel. That remains extraordinarily high. Before the war began in late February, Brent crude was trading around $70 per barrel.

Benchmark U.S. crude also slid, falling $2.37 per barrel to $104.51 per barrel, but U.S. gasoline prices continue to tick higher. The average price for a gallon of regular gasoline jumped another 7 cents overnight to $4.30. The price at this point last year was $3.18.

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The U.S. has continued its blockade of Iranian ports while the Strait of Hormuz is closed, pushing oil prices higher in recent days. Reports Thursday suggesting a possible escalation by U.S. President Donald Trump doused hopes for a quick end to the conflict.

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“The breakdown of talks between the U.S. and Iran, along with President Trump reportedly rejecting Iran’s proposal for a reopening of the Strait of Hormuz, has the market losing hope for any quick resumption in oil flows,” ING Bank strategists Warren Patterson and Ewa Manthey wrote in a research note.

Oil prices vary depending on the type of crude oil, where it is being traded and under what terms, for futures contracts. By some measures, Brent has hit its highest level since its peak of $147.50 per barrel in 2008 during the global financial crisis.

In equities trading, Alphabet jumped 7.4 per cent overnight after Google’s parent company delivered another quarter of stellar growth driven by its investment in artificial intelligence. Those investments, CEO Sundar Pichai said, “are lighting up every part of the business.”

Alphabet earned $62.6 billion, or $5.11 per share, during the January-March period, an 81 per cent increase from the same time last year.

Shares of Facebook owner Meta tumbled nine per cent overnight after it posted better-than-expected results but raised its forecast for capital expenditures. The owner of Instagram and Facebook earned $26.77 billion, or $10.44 per share, in the January-March period, up about 61 per cent from $16.64 billion, or $6.43 per share, in the same period a year earlier.

Elsewhere, in Europe at midday, Britain’s FTSE 100 climbed 1.3 per cent after the Bank of England kept its main interest rate on hold at 3.75 per cent Thursday as policymakers assess the economic impact of the Iran war and Tehran’s effective closure of the Strait of Hormuz, through which a fifth of the world’s crude passes. The decision was widely expected and echoes the decision of the U.S. Federal Reserve on Wednesday to keep rates unchanged. It was the same theme in Japan on Tuesday.

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France’s CAC 40 lost 1.1 per cent, and Germany’s DAX traded 0.2 per cent lower.

Asian stocks mostly fell. Tokyo’s Nikkei 225 shed one per cent to 59,284.92 and the Kospi in South Korea fell 1.4 per cent to 6,598.87.

Hong Kong’s Hang Seng lost 1.3 per cent to 25,776.53, and the Shanghai Composite index closed 0.1 per cent higher at 4,112.16. China’s factory activity for April slowed slightly but remained in expansion territory for the second month, despite the global energy shock prompted by the Iran war, an official survey showed.

Australia’s S&P/ASX 200 was down 0.2 per cent at 8,665.80.

Taiwan’s Taiex was one per cent lower and while India’s Sensex lost 0.5 per cent.

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