Oil prices experienced a surge, with Brent crude hitting over $126 per barrel briefly, marking the highest level since March 2022. However, prices have since retreated amid stalled U.S.-Iran talks, casting doubt on the reopening of the Strait of Hormuz and a lasting resolution to the Middle East conflict.
The price for Brent crude set for delivery in June now stands around $111 per barrel, a notable increase from the pre-war trading price of approximately $70 per barrel. Concurrently, gasoline prices are on the rise, with the average cost per liter in Canada reaching $1.830 on Thursday afternoon, up by 4.5 cents from the previous day and 47.9 cents higher compared to a year ago, with British Columbia reporting prices just above $2 per liter.
Forecasts indicate further increases in fuel costs, with the Greater Toronto Area expected to reach $1.899 per liter, while Halifax and Edmonton may see prices hitting $1.897 and $1.859 per liter, respectively. In the U.S., the average gas price hovers around $4.375 per gallon.
The impasse in U.S.-Iran negotiations, coupled with reports hinting at potential escalations by U.S. President Donald Trump, has dimmed hopes for a swift resolution to the conflict, amplifying market uncertainties. Traders are actively engaged in buying and selling oil contracts, driving the price of Brent crude for July delivery to hit a peak of $114.70 before settling at $110.40, still elevated compared to pre-war levels.
In North America, stock markets saw positive movements, fueled by robust profit reports from major companies such as Alphabet. The S&P 500 surged by one percent, surpassing its previous all-time high, while the Dow and Nasdaq composite indices rose by 1.6 percent and 0.9 percent, respectively.
Noteworthy performers in the market included Caterpillar, Eli Lilly, O’Reilly Automotive, and Royal Caribbean, all reporting profits that exceeded analyst expectations. Treasury yields eased following the oil price pullback, contributing to market stability alongside encouraging corporate earnings.
Internationally, stock market performances varied, with the FTSE 100 in the UK climbing by 1.6 percent after the Bank of England maintained its key interest rate at 3.75 percent amid economic assessments related to the Iran conflict. Germany’s DAX rose by 1.4 percent, and France’s CAC 40 increased by 0.5 percent following the European Central Bank’s decision to keep interest rates unchanged.
In Asian markets, the Hang Seng index in Hong Kong dropped by 1.3 percent, while the Shanghai Composite index closed slightly higher by 0.1 percent. The global economic landscape continues to navigate uncertainties driven by oil price fluctuations and geopolitical tensions.