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Crude and gasoline prices fall after proposed US-Iran 10-day ceasefire
Oil and gasoline gave back earlier gains after a Reuters report said mediators proposed a 10-day cessation of strikes, while supply tightness tied to the Strait of Hormuz continued to support prices.
Crude oil and gasoline prices erased early gains and turned lower as markets weighed a possible US-Iran de escalation. According to Yahoo Finance, August WTI crude oil (CLQ26) was down 0.3% (-0.40%), and August RBOB gasoline (RBQ26) fell 0.5% (-0.47%) on the day.
Prices had initially moved higher, with crude posting a 5-week high and gasoline hitting a 2-month high after reports of further US-Iran hostilities over the weekend. Yahoo Finance said the US carried out a ninth straight day of airstrikes on Iran, while Iran retaliated with drones and missiles launched at US bases in Kuwait, Jordan, Bahrain, and Iraq.
The shift lower came after Reuters reported mediators proposed a 10-day ceasefire between the US and Iran. Yahoo Finance added that Iran said it would not abandon diplomacy, and that Qatar and Pakistan reached out to mediate an end to the conflict and proposed a 10-day cessation of strikes.
Despite the pullback, the report said crude had other sources of support, including tightening global supply linked to reduced flows through the Strait of Hormuz, with the International Maritime Organization warning it is too dangerous to cross. Yahoo Finance also noted support from a higher crude crack spread, after it rose to a record high last Friday, and from Ukraine intensifying drone attacks on Russian oil infrastructure.
Latest closeWTI crude $79.00 ▼0.8%|Gasoline (RBOB) $3.114 ▼5.7%