The price of Brent crude oil soared above $126 per barrel briefly, hitting its highest level since March 2022, before retracting due to stalled negotiations between the U.S. and Iran. Concerns about the reopening of the Strait of Hormuz and the resolution of the conflict in the Middle East influenced the fluctuation in oil prices. The price of Brent crude set for June delivery decreased to approximately $111 per barrel by 4:15 p.m. on Thursday, contrasting the pre-war trading price of around $70 per barrel.
Simultaneously, gasoline prices are on the rise, with the average price per litre in Canada reaching $1.830 on Thursday afternoon, according to GasBuddy. This marked an increase of 4.5 cents from the previous day and 47.9 cents compared to the same period last year, with British Columbia recording the highest average price of just over $2 per litre.
Forecasts suggest further increases in gas prices, with the Greater Toronto Area anticipating prices to reach $1.899 per litre, Halifax expecting $1.897 per litre, and Edmonton projecting $1.859 per litre. In the U.S., the average gas price nationwide is hovering around $4.375 per gallon.
The ongoing uncertainty surrounding the war, characterized by Iran’s control of the Strait of Hormuz and the U.S. blockade of Iranian ports, is a key factor contributing to the spike in oil prices. Reports indicating a potential escalation by U.S. President Donald Trump have dashed hopes of a swift resolution to the conflict.
According to ING Bank strategists Warren Patterson and Ewa Manthey, the breakdown in U.S.-Iran talks, coupled with President Trump’s rejection of Iran’s proposal regarding the Strait of Hormuz, has dampened market optimism for a prompt resumption of oil flows. Traders are actively engaging in the buying and selling of oil contracts for future delivery, with the price of Brent crude for July delivery reaching a high of $114.70 overnight before settling at $110.40.
Amidst the war, the peak price for the most traded Brent contract stands at $119.50. The positive earnings reports from U.S. companies, combined with the slight pullback in oil prices, have helped stabilize Wall Street near record levels.
In North America, stock markets saw gains on Thursday following strong profit reports from major companies like Alphabet. The S&P 500 surged by one percent, surpassing its previous all-time high, while the Dow and Nasdaq composite also experienced notable increases.
Companies such as Caterpillar, Eli Lilly, O’Reilly Automotive, and Royal Caribbean witnessed stock rallies after reporting profits that exceeded analysts’ expectations for the latest quarter. Treasury yields in the bond market eased after the retreat in oil prices.
Internationally, stock market performances varied. The FTSE 100 in the UK rose by 1.6 percent, the DAX in Germany increased by 1.4 percent, and France’s CAC 40 climbed by 0.5 percent following decisions by the Bank of England and the European Central Bank to maintain their respective interest rates. Asian stocks displayed mixed results, with Hong Kong’s Hang Seng declining by 1.3 percent and the Shanghai Composite index closing marginally higher.
