Crude oil prices trade at $79/bbl as focus remains on 60-day timeline for final US-Iran peace deal; gold down 1.2%

Crude oil prices were trading around $79 per barrel (bbl) during the early market hours on Friday, June 19, as global investors focused on the 60-day timeline which both the United States and Iran have agreed upon to negotiate and achieve a final peace deal for the West Asia conflict.

Global benchmark oil, Brent crude, slowly climbed back to around $79 per bbl after nearly dropping to its pre-war levels on Thursday’s market session, as investors remain cautious until a final peace deal is negotiated between the countries.

After three rounds of intense negotiations, the United States and Iran signed a 14-point memorandum of understanding (MoU) to expand the existing ceasefire in West Asia, while ensuring the normal flow of maritime traffic via the key trading route, Strait of Hormuz, in exchange for Iran’s nuclear ambitions.

Oil prices today

At 7:40 am (IST), the Brent crude oil prices were trading 0.31% lower at $79.60 per bbl on Friday’s market, compared to $79.42 per bbl at the previous market close, according to Investing.com data.

Brent crude oil prices advanced back to their current levels from around $76-77 per bbl region as the geopolitical uncertainty still looms over global commodity market investors. At the pre-war level, the crude oil prices were around $71-72 per bbl.

Crude oil prices have dropped more than 8% in the last five days, more than 25% in the past month, and over 23% in the last three months, according to the exchange data.

The US-based West Texas Intermediate (WTI) crude oil prices were trading flat at $76.62 per bbl as of 7:44 am (IST) on Friday, compared to $76.60 per bbl at the previous market close, as per the data.

US-Iran 14-point MoU deal

According to the 14-point MoU deal between the United States and Iran and its allies, all military operations on all fronts have been permanently terminated, including escalations in Lebanon.

The final peace deal is expected to confirm the permanent termination of the war on all fronts.

Both countries are not allowed to interfere in each other's internal affairs, and the United States and Iran will negotiate a final peace deal within a maximum of the next 60 days. However, if both sides agree, the negotiations can be extended longer with mutual consent.

As part of the interim agreement, the US will fully remove its naval blockade within 30 days of the MoU, and will remove all of its forces from the proximity of Iran within 30 days of the final peace deal.

In exchange, Iran will ensure the safe passage of commercial vessels with no change for the next 60 days. The deal also suggests that the parties have agreed on a $300 billion budget for the reconstruction and economic development of Iran.

The US will lift all types of sanctions on Iran, while Iran reaffirms that the country will not procure or develop nuclear weapons.

The US Department of Treasury will issue waivers for the export of Iranian crude oil and other crude-linked derivatives, while making full use of the available frozen or restricted funds of Iran.

The final peace deal is expected to be endorsed by a binding UNSC resolution, according to the US-Iran MoU.

Gold prices today

The New York Mercantile Exchange-based COMEX gold prices were trading 1.2% lower at $4,193.30 per ounce as of 10:17 pm (ET) in United States, compared to $4,245.90 per ounce at the previous commodity market close.

Gold prices were trading lower as the precious metals were witnessing subdued demand due to a higher US dollar rate in the market. Traders are likely to purchase less quantity of gold in case the greenback trades higher, as they will receive fewer quantities of the asset at a higher price.

The US dollar was trading higher on the backdrop of the US Federal Reserve’s decision to keep the interest rates unchanged, and investors were focusing on capital reallocation amid the dynamic and evolving geopolitical sentiment.

Data collected from the Bloomberg US dollar spot index (DYX) showed that the greenback was trading 0.01% higher at 100.864 per bbl, compared to the previous currency market close levels.