Crude oil prices drop to near $101/bbl as investors pin hopes on US-Iran peace deal in near term; gold up 0.5%

Crude oil prices dropped to trade near $101 per barrel (bbl) during the early market hours on Thursday, May 7, as global commodity market investors pinned their hopes on a potential peace deal between the United States and Iran in the near term.

Latest media reports suggest that Iran is expected to respond to its mediators about America’s proposal to end the conflict in West Asia on Thursday. The proposal sent by the United States had been under review by the Gulf nation so far.

The global benchmark crude oil prices, Brent futures, dropped under the psychological $100 per bbl level during Wednesday evening market hours as investors focused on any positive update coming from the negotiations between the two countries.

However, the Brent crude oil prices remained volatile, climbing back to $101 per bbl levels in the latter half of the market session into Thursday, India time.

The West Texas Intermediate (WTI) crude oil prices dropped to an intraday low of $88.71 per bbl during Wednesday’s market session, after opening above $102 per bbl, according to the exchange data.

Oil prices today

As of 7:46 am (IST), the Brent crude oil prices were trading 0.28% higher at $101.55 per bbl on Thursday, compared to $101.27 per bbl at the previous commodity market close, according to Investing.com data.

The WTI crude oil prices were trading 0.37% higher at $95.43 per bbl as of 7:47 am on May 7, compared to $95.08 per bbl at the previous market close, as per the exchange data.

US-Iran peace deal hopes

According to a CNN report citing people aware of the development, Iran is expected to hand in its response about the US proposal for a potential peace agreement between the two countries.

The report also mentioned that both sides in the West Asia conflict are now advancing towards an end to the war. This comes after Trump announced there is “great progress” in the negotiations.

However, a BBC report mentioned that the US proposal is “still being considered” by Iran amid the reports that the two sides are likely closing on the deal soon.

Amid the negotiations, Israeli Prime Minister Benjamin Netanyahu said that the country has targeted a top Hezbollah commander through an airstrike in Beirut, for the first time since the ceasefire in Lebanon.

All eyes now remain focused on the developing negotiations between the United States and Iran, as investors remain cautious about any potential trend reversal in the market.

Gold prices today

The New York Mercantile Exchange-based COMEX gold prices were trading 0.56% higher at $4,719.60 per ounce as of 10:11 pm (ET) in United States on Wednesday, compared to $4,694.30 per ounce at the previous market close, according to the official data.

The gold prices have risen 3.67% in the last five days, but are down over 5% in the past one month, according to market data.

The gold prices continued to gain momentum on the backdrop of a lower US dollar rate, as traders tend to buy more of the precious metal when the benchmark currency rate falls in the market to acquire more quantity of the goods.

This, in turn, increases the demand for gold in the global market as investors gauge the impact of the dynamic geopolitical developments from the US-Iran conflict in West Asia.

Data collected from the Bloomberg US dollar spot index (DYX) showed that the greenback was trading 0.06% lower at 97.969 as of 10:11 pm (ET) on Wednesday, compared to the previous currency market close.