Oil futures fell early Thursday while Wall Street rose even as stalled U.S.-Iran talks raised doubts over the reopening of the Strait of Hormuz and a permanent end to the Iran war.
U.S. markets ticked higher before the bell with some of the country’s biggest technology companies posting first quarter earns this week.
Futures for the S&P 500 rose 0.4% before the opening bell, while futures for the Dow Jones Industrial Average rose 0.6%. Nasdaq futures gained 0.5%.
Brent crude to be delivered in June slid $1.93 overnight to $108.51 per barrel. That remains extraordinarily high. Before the war began in late February, Brent crude was trading around $70 per barrel.
Benchmark U.S. crude also slid, falling $2.37 per barrel to $104.51 per barrel, but U.S. gasoline prices continue to tick higher. The average price for a gallon of regular gasoline jumped another 7 cents overnight to $4.30. The price at this point last year was $3.18.
The U.S. has continued its blockade of Iranian ports while the Strait of Hormuz is closed, pushing oil prices higher in recent days. Reports Thursday suggesting a possible escalation by U.S. President Donald Trump doused hopes for a quick end to the conflict.
“The breakdown of talks between the U.S. and Iran, along with President Trump reportedly rejecting Iran’s proposal for a reopening of the Strait of Hormuz, has the market losing hope for any quick resumption in oil flows,” ING Bank strategists Warren Patterson and Ewa Manthey wrote in a research note.
Oil prices vary depending on the type of crude oil, where it is being traded and under what terms, for futures contracts. By some measures, Brent has hit its highest level since its peak of $147.50 per barrel in 2008 during the global financial crisis.
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