Oil hits $105 amid Middle East volatility

Brent crude traded around $105 a barrel on Monday, April 27, as investors weighed stalled U.S.-Iran diplomacy against the risk of fresh supply disruption in the Middle East. (forbes.com) (caixabankresearch.com) West Texas Intermediate opened at $95.43 a barrel, while Brent opened at $104.85, according to Forbes Advisor’s daily market snapshot for April 27. (forbes.com) By Tuesday, April 28, Brent was quoted above $109 on Financial Times market data and at $110.42 on Trading Economics, showing the move did not fade after Monday’s open. (ft.com) (tradingeconomics.com) The immediate trigger was diplomacy that appeared to be stalling again. CaixaBank Research said investors started the week cautiously amid stalled U.S.-Iran peace talks, while the Associated Press reported Tuesday that efforts to end the Iran war looked set to stall again. (caixabankresearch.com) (ksat.com) That matters because the Strait of Hormuz is one of the world’s main oil chokepoints. An International Monetary Fund analysis published in March said the Middle East war was already hitting energy, trade and finance, while a recent policy analysis estimated about 20 million barrels a day normally move through Hormuz. (imf.org) (habtoorresearch.com) The price jump spilled into equities. Reuters reported London’s FTSE 100 rose 0.2% on Monday, with energy stocks up 1% and oil majors BP and Shell advancing about 1% each. (kitco.com) Investors were also looking ahead to central-bank decisions. Reuters’ April 28 poll found economists now expect inflation in most countries to be markedly higher this year than they did three months ago because of the energy flare-up. (msn.com) Oil had already been running hot before this week. The International Energy Agency said in its April market report that Brent averaged $99.60 a barrel in March, while the Organization of the Petroleum Exporting Countries said its own reference basket averaged $116.36. (iea.org) (publications.opec.org) For now, the market is trading on two numbers at once: roughly $105 on Monday’s shock and more than $109 by Tuesday’s follow-through. As long as diplomacy stays uncertain, oil is likely to keep moving with every headline out of Washington and Tehran. (forbes.com) (ft.com)