Declining prospects of a deal between the US and Iran are driving up oil prices.
Resolving disruptions to the supply of essential goods could take months.
Written by Ziad Abdel Fattah:
Oil prices rose on Tuesday, but fluctuated. Stocks Investor optimism about an imminent peace deal between the United States and Iran has waned due to new US strikes in the Middle East.
US forces launched strikes in southern Iran in what was described as a defensive action, as Tehran’s chief negotiator and foreign minister were in Doha for talks with Qatar’s prime minister about a possible deal with Washington to end the three-month-long war.
US Secretary of State Marco Rubio said that negotiating an agreement with Iran could “take a few days,” dashing hopes that the conflict was nearing its end.
Brent prices rise
The developments led to a rise in Brent crude futures prices by more than 2% in Asian trading to reach $98.21 a barrel.
The price of US West Texas Intermediate crude rose slightly from the last trading price on Monday, but fell by 4.9% compared to the close of trading at the end of the past week, while no settlement was made on Monday due to the holidays in the United States.
According to Reuters, it is repeatedly stated that an agreement is imminent, but what are the details of this agreement? This is the important matter that has never been announced, as well as when the Strait of Hormuz will be opened.
In the currency market, the dollar held steady on Tuesday as demand for it as a safe haven was renewed, although it remained somewhat below its six-week high reached last week.
The euro fell 0.1% to $1.1633, while the pound sterling declined 0.13% to $1.3488, and against the yen, the dollar held steady at 158.94.
Bond prices stabilized after falling last week due to concerns that a prolonged period of high energy prices would lead to a return of inflation and spur interest rate hikes in both developed and emerging markets.
The yield on two-year US Treasury bonds fell by about 7 basis points to 4.0573%, while the yield on 10-year bonds fell by more than 6 basis points to 4.5083%.
According to the report, resolving disruptions to the supply of essential goods is expected to take months, and financial support measures are likely to lead to a continued deterioration in sovereign balance sheets – which will also require increased borrowing in an environment characterized by high financing costs.
