Crude oil prices trade near $95/bbl amid reports of US ‘self defence’ strikes on Iran; gold up 0.35%

Crude oil prices in the global market were trading around $95 per barrel (bbl) during the early market session on Tuesday, May 26, amid reports of self-defensive military strikes carried out by the United States on Southern Iran amid the fragile ceasefire deal and ongoing negotiations between the two countries.

After yesterday’s cooldown opening of $97 per bbl, the global benchmark Brent crude oil prices dropped to $93.21 per bbl during the trading session on Monday, May 25. However, investors remain cautious as they still gauge the market sentiment while keeping a close eye on the negotiations for a potential peace deal.

The US-based West Texas Intermediate (WTI) also dropped to an intraday low of $89.4 per bbl during the trading session, after opening lower at $92.11 per bbl due to hopes of a peace deal conclusion this week.

Although the oil prices were trading lower this week, the market investors remained quite cautious, as any escalation from either side of the conflict is likely to flare up oil prices in the market amid a global supply chain disruption.

So far, two negotiations between the United States and Iran have failed to yield any positive outcome, as the conflict has entered its 13th week since the beginning. US President Donald Trump’s commentary has been a major trigger for the commodity markets in the last few weeks.

Oil prices today

At 7:50 am (IST), the Brent crude oil prices were trading 1.86% higher at $95.16 per bbl on Tuesday, May 26, compared to $93.42 per bbl at the previous market close, according to Investing.com data.

Data also showed that oil prices have cooled 10% in the past one week period amid hopes of the peace deal and a near-term end to the war in West Asia.

The WTI crude oil futures were trading 1.54% higher at $91.71 per bbl as of 7:52 am (IST) on Tuesday, compared to $90.31 per bbl at the previous commodity market close, according to the exchange data.

Did US attack Iran?

According to multiple media reports, the United States conducted “self defence” military strikes in the Southern Iran region in an effort to allegedly protect the US troops, who posed a threat from the Iranian forces. US Central Command spokesperson Tim Hawkins told the news portal CNBC that the US targeted missile launch sites and Iranian boats which were attempting to emplace mines in the Strait of Hormuz.

“U.S. Central Command continues to defend our forces while using restraint during the ongoing ceasefire,” said Hawkins, cited in the news report.

This comes one day after President Trump said that the peace deal “isn’t even fully negotiated yet” as the United States continues to demand that Iran remove nuclear weapons from its arsenal.

Over the weekend, Trump also said that both countries have “largely negotiated” a peace deal, further complicating the negotiation stage for global market investors.

Gold prices today

The New York Mercantile Exchange-based COMEX gold prices were trading 0.35% higher at $4,539.10 per ounce as of 10:20 pm (ET) in the United States on Monday evening, compared with $4,523.20 per ounce at the previous market close, according to the official data.

Gold prices were trading higher during Tuesday’s trading session due to the lower rate of the US dollar in the market. Traders buy more gold when the dollar price falls in the market as they will be able to buy a larger quantity at a lower price.

Bloomberg US dollar spot index (DYX) data showed that the greenback was under pressure, trading 0.18% lower at 99.062 as of 10:22 pm (ET) on Monday evening, compared to the previous market close.

The dollar demand in the market rises if investors decide whether or not the geopolitical situation is risky enough to pull funds out of emerging market bets into safe haven currency, the US dollar.