Oil surpasses 100 dollars amid tensions between US and Iran
Oil prices surged yesterday to levels above $100 after US President Donald Trump ordered a blockade of the Strait of Hormuz, increasing tensions with Iran following the collapse of peace talks over the weekend.
The Brent crude advanced 8.6 percent, to $102.21 a barrel, while the WTI rose 8.5 percent, to $104.8.
The escalation occurred after the US and Iran failed to reach an agreement during talks in Pakistan over the weekend, likely disappointing investors who had increased stocks the previous week after the announcement of a ceasefire between the countries.
Donald Trump announced that he will block the transit of ships through the Strait of Hormuz, which rekindled risks in the region.
The decision by Trump to announce a naval blockade of the Strait of Hormuz is about to revive risk aversion this week, said Elias Haddad, global strategy manager at Brown Brothers Harriman & Co.
With forward-dated WTI and Brent contracts again above $100, that should shatter the narrative that assets can gravitate towards their pre-war levels, because the start of US-Iran negotiations opened a path to close the unprecedented supply shocks facing the global economy, said Garfield Reynolds, leader of the MLV team.
Weekly advances
Last week’s announcement of a ceasefire boosted weekly gains in stock markets; the Nasdaq advanced 4.68 percent, as did the S&P 500 and the Dow Jones, which rose 3.56 and 3.04 percent, respectively.
In Mexico, the two stock exchanges presented increases of 0.46 percent for the S&P/BMV IPC, and the FTSE-BIVA rose 0.69 percent. Meanwhile, the Mexican currency closed the previous week at 17.3186 units, representing a weekly appreciation of 3.26 percent.
