Oil Fluctuates at $96.40 as Hormuz Reopening Reports Conflict
WTI crude reversed to gain 0.7% amid conflicting reports on the Strait of Hormuz reopening status.
Key points
- WTI crude oil increased 0.7% to $96.40 per barrel during Tuesday afternoon trading hours.
- The Dow Jones Industrial Average declined 0.5% to 51,804.9 while the Nasdaq Composite rose 0.3%.
- The ten-year Treasury yield rose 1.7 basis points to 4.98% as inflation concerns persisted.
West Texas Intermediate crude oil rose 0.7% to $96.40 per barrel in Tuesday afternoon trade. This gain reversed the session's earlier decline as markets reacted to conflicting geopolitical reports.
The Dow Jones Industrial Average fell 0.5% to 51,804.9, while the Nasdaq Composite gained 0.3% to 27,213.2. These mixed equity moves reflected the uncertainty surrounding the Strait of Hormuz situation.
Geopolitical Reports Create Market Uncertainty
Reuters and Kyodo News reported that Iran offered to reopen the strait within seven days. This offer was contingent on the United States easing its current military pressure in the region.
A senior Iranian official denied the validity of these reports to CNBC's Versant Media partner. The denial added to the confusion that drove the intraday volatility in energy prices.
Saudi Pipeline Operations Resume After Attacks
Saudi Arabia restarted operations at its East-West pipeline following recent drone attacks. Reuters cited sources indicating that exports from the Yanbu port could resume later on Tuesday.
Saxo Bank noted that oil price moves highlight the embedded geopolitical risk premium. The bank observed that the market remains highly sensitive to any potential diplomatic breakthrough.
Yields Rise Amid Inflation Concerns
The ten-year Treasury yield increased 1.7 basis points to 4.98% during intraday trading. The two-year rate also rose 1.1 basis points to reach a level of 4.76%.
Oxford Economics stated that the Federal Reserve's next rate increase could occur in October. This prediction assumes that higher oil prices continue to push inflation away from the 2% target.
On Holding shares climbed 9% after the company outlined mid-term financial targets. AutoZone stock jumped 6.3% despite missing revenue expectations, as its earnings beat market estimates.
