LONDON: Oil prices fell back in choppy trading and stock markets were marginally higher Tuesday (Aug 11) as investors weighed fading expectations of higher interest rates against concern over oil flows from the Middle East.
Oil prices initially rose more than 2 per cent with the United States and Iran appearing not to make much progress towards a deal to reopen the Strait of Hormuz.
Oil contracts later gave up those gains, but are still up around 10 per cent in the past five days and are trading near their highest levels since early June.
“Crude oil has surged over the past few days as hopes of a US-Iran agreement that would fully reopen the Strait of Hormuz have faded,” said Fawad Razaqzada, market analyst at FOREX.com.
But “we have also heard contradictory messages from Washington and Tehran”, he said.
In New York, the Dow and the wider S&P edged higher while the tech-heavy Nasdaq opened lower. In mid-afternoon European trading, Frankfurt, London and Paris were all up slightly.
“The slight drop in expectations for Federal Reserve rate hikes following the weak US payroll report have supported equities,” said David Morrison, senior market analyst at Trade Nation.
“But rising crude oil prices … and further delays in reopening the Strait of Hormuz, have introduced fresh inflation risks.”
Asian equities ended mixed, with Tokyo closed for a holiday.
