The value of Brent crude oil spiked above $126 US per barrel briefly, marking the highest level since March 2022. The surge was attributed to stalled negotiations between the U.S. and Iran, casting uncertainty on the reopening of the Strait of Hormuz and a lasting resolution to the conflict in the Middle East.
As of 4:15 p.m. on Thursday, the price of Brent crude for June delivery dipped to around $111 US per barrel. Prior to the commencement of the war in late February, Brent crude was trading at approximately $70 US per barrel.
Simultaneously, gasoline prices are on the rise, with the average cost per liter in Canada reaching $1.830 on Thursday afternoon. This represents a 4.5-cent increase from the previous day and a 47.9-cent surge compared to a year ago. Notably, British Columbia recorded the highest prices, averaging slightly above $2 per liter.
Forecasts indicate a further escalation in prices. In the Greater Toronto Area, gas prices are anticipated to climb to $1.899 per liter, while Halifax and Edmonton could witness prices of $1.897 and $1.859 per liter, respectively.
In the U.S., the average gas price hovers around $4.375 per gallon. The ongoing tensions in the Middle East, particularly the impasse between the U.S. and Iran over the Strait of Hormuz, have contributed to the surge in oil prices. Reports hinting at potential escalation by U.S. President Donald Trump have dashed hopes for a swift resolution to the conflict.
Market analysts from ING Bank noted the market’s diminishing optimism due to the breakdown in talks between the U.S. and Iran. Traders are actively engaging in transactions involving various oil contracts, with Brent crude prices reaching a high of $114.70 per barrel for July deliveries. Despite a slight decline, the prices settled at $110.40, maintaining a higher level compared to pre-war rates.
Amid the war, the peak price for the most traded Brent contract hit $119.50 last month. This, coupled with favorable corporate earnings in the U.S., has helped stabilize Wall Street near its peak levels.
North American stock markets observed positive movements on Thursday following robust earnings reports from major companies like Alphabet. The S&P 500 surged by one percent, reaching a new all-time high. The Dow climbed by 1.6 percent, while the Nasdaq composite rose by 0.9 percent.
Companies such as Caterpillar, Eli Lilly, O’Reilly Automotive, and Royal Caribbean experienced stock rallies after surpassing analyst expectations in their latest quarterly results.
In the bond market, Treasury yields experienced a decline following the retreat of oil prices from their significant overnight gains.
Overseas, stock market performances were mixed. The FTSE 100 in Britain rose by 1.6 percent, the DAX in Germany returned 1.4 percent, and France’s CAC 40 increased by 0.5 percent. However, Asian stocks witnessed varied movements, with Hong Kong’s Hang Seng dropping by 1.3 percent, while the Shanghai Composite index closed 0.1 percent higher.