Oil Prices Fall as U.S.-Iran Deal to Reopen Hormuz Takes Effect
Oil prices fell and stocks rose on Thursday after the United States and Iran said they had signed a preliminary agreement to reopen the Strait of Hormuz.Both sides said that President Trump and President Masoud Pezeshkian of Iran signed the deal remotely on Wednesday, setting the stage for a new round of negotiations that could begin as soon as Friday.As a result, the agreement to begin reopening the strait and lifting the U.S.naval blockade would “enter into force with immediate effect,” he wrote.Upon signing, the United States is expected to issue sanctions waivers, allowing Iran to resume oil sales on global markets.Oil prices continue to drop.The price of Brent crude, the global benchmark for oil, fell about 1.5 percent to about $78 a barrel, as traders were cautiously optimistic that oil could start flowing again through the Strait of Hormuz.
The price is approaching levels not seen since the early days of the war.West Texas Intermediate crude, the U.S.benchmark, was also down, about 2 percent to around $75 a barrel.Stocks rise.Futures on the S&P 500 pointed to a 0.8 percent increase when stocks resume trading in the United States on Thursday.Stocks in Asia, where countries import vast quantities of oil and gas, were mixed.
Stocks in Japan and South Korea jumped about 2 percent, while shares in Hong Kong were down more than 2 percent.In Europe, stocks were mixed.The Stoxx 600, a broad European index, slipped about 0.5 percent and the FTSE in Britain fell about 1 percent, while the DAX in Germany gained 0.2 percent.Gasoline prices fall.Gas prices fell again on Thursday, dropping below $4 a gallon for the first time since the early days of the war, according to the AAA motor club.
The price of gasoline is still about a third higher since the war began.Gas prices don’t move in lock step with crude, usually trailing increases or drops by a few days.The average price of diesel also fell on Thursday, to $5.13.It remains more than 35 percent higher since...