Crude oil prices trade near $113/bbl amid fresh attacks in Strait of Hormuz; gold up 0.3%

Crude oil prices rose to $113 per barrel (bbl) in the early hours on Tuesday, May 5, at the global market as investors remain cautious and gauge the impact of the fresh attacks in the key maritime trading route, the Strait of Hormuz.

Latest reports suggest that the ceasefire deal between the United States and Iran remains fragile, as fresh attacks over the last 24 hours have added additional strain between the two countries at war in West Asia.

The global benchmark Brent crude oil prices (July futures) surged to over $114 per bbl in the early hours on Tuesday, India time, after the session opened higher around $113.8 per bbl, according to Investing.com data.

On Monday, the crude oil prices remained highly volatile, with rates surging to above $115 per bbl during the intraday trade, compared to the opening level of around $106 per bbl.

The US-based benchmark, West Texas Intermediate (WTI) crude oil prices surged to $107 per bbl amid the rising tensions in the Strait of Hormuz on Monday, after opening at around $99 per bbl.

Oil prices today

At 7:30 am (IST), the Brent crude oil prices were trading 0.32% lower at $113.41 per bbl on Tuesday, compared to $113.82 per bbl at the previous commodity market close, according to Investing.com data.

The WTI crude oil prices were trading 1.88% lower at $104.44 as of 7:30 am (IST), compared to the previous market close level of $106.42 per bbl, as per the exchange data.

Factors fuelling oil prices today

Global investors exercised caution on Tuesday’s market as the risk of an immediate supply disruption weighed down the sentiment amid renewed tensions in the Strait of Hormuz following fresh attacks.

A CNN report on Monday suggests that the United Arab Emirates (UAE) “engaged” with 19 Iranian missiles and drone attacks, which resulted in injuries amid an existing ceasefire deal with the United States in play.

UAE’s Ministry of Defence, in an official statement, said that the UAE air defences engaged with “12 ballistic missiles, 3 cruise missiles, and 4 UAVs launched from Iran,” which resulted in 3 moderate injuries on May 4.

People aware of the development told the news portal that the UAE used Israel’s Iron Dome air defence system to intercept the Iranian projectiles in the Emirati airspace on Monday.

Aside from the missile and drone attacks, US President Donald Trump, in a social media post on Truth Social, said that Iran has “taken some shots” at unrelated nations in the Strait of Hormuz as the Western nation continues its pursuit of “Project Freedom.”

Trump approved “Project Freedom” to safely escort ships out of the Strait of Hormuz amid the existing blockades and closures. However, in his post, he also mentioned that a ‘South Korean Ship,’ no other vessel has been damaged transiting through the key trading route.

“We’ve shot down seven small Boats or, as they like to call them, ‘fast’ Boats,” said Trump in his post. “Other than the South Korean Ship, there has been, at this moment, no damage going through the Strait,” he said.

With global oil inventories at stake, the rising concerns over a re-escalation of the West Asia conflict are set to drive the sentiment in the market till any potential respite cools down the energy prices.

Gold prices today

At 10:04 pm (ET), the New York Mercantile Exchange-based COMEX gold prices were trading 0.35% higher at $4,548.70 per ounce on Monday, May 4, compared to $4,533.30 per ounce at the previous commodity market close, as per the official data.

The Bloomberg US dollar spot index (DYX) data showed that the greenback was trading 0.12% higher at 98.482 as of 10:05 pm (ET) on Monday, compared to the previous currency market close.

The data suggests that the precious yellow metal gold prices were trading higher despite a higher US dollar amid the renewed tensions between the United States and Iran in West Asia, prompting safe-haven asset bets.

Usually, US dollar rates and gold prices are inversely related, but with the rising supply chain tensions, the global market investors are buyers of gold on Tuesday, with a focus on any commentary from either side of the conflict.