Crude oil trades over $105/bbl as concerns remain around ‘weak’ US-Iran ceasefire deal; gold up 0.2%

Crude oil prices in the global market were trading above $105 per barrel (bbl) during the early market hours on Tuesday, May 12, after concerns loomed over around a ‘weak’ ceasefire deal between the United States and Iran.

The latest media report suggests that US President Donald Trump, after rejecting Iran’s response to the US proposal for a peace deal, said that the ceasefire deal between the two nations at war is looking weak.

Oil prices benchmark, Brent crude oil futures, surged to an intraday high of $105.99 per bbl during Monday’s trading session, after the energy prices opened for trading at $104 per bbl on the escalating tensions in West Asia.

The West Texas Intermediate (WTI) crude oil prices surged to above the psychological mark of $100 per bbl on Monday’s trading session, after opening around $98.19 per bbl.

Oil prices today

At 7:45 am (IST), the Brent crude oil futures were trading 0.96% higher at $105.24 per bbl on Tuesday, compared to $104.21 per bbl at the previous market close, according to Investing.com data.

The exchange data also showed that the oil prices have lost 4.22% in the past one-week period, but the rates remained over 10% elevated in the last one month.

WTI crude oil prices were trading 1.19% higher at $99.24 per bbl as of 7:46 am (IST) on Tuesday, compared to $98.07 per bbl at the previous market close, according to the exchange data.

Ceasefire deal concerns

Oil prices remained elevated on Tuesday’s market, India time, as investors continued to remain cautious amid the dynamic sentiment across the asset classes and the weak global cues due to an absence of a potential peace deal.

According to a CNN report, President Donald Trump told reporters at the White House that the monthlong ceasefire between the United States and Iran is on a “massive life support” as the Western leader termed the same as “unbelievably weak”.

“I would say the ceasefire is on massive life support,” Trump said.

Since the ceasefire came into effect, both sides have somewhat engaged in a standoff against each other in the Strait of Hormuz, as the key trading route remains closed amid a US blockade of Iranian ports.

Focus will now remain on any positive development from the West Asian front, while Trump now looks forward to visiting China to meet President Xi.

Gold prices today

At 10:17 pm (ET), the New York Mercantile Exchange-based COMEX gold prices were trading 0.23% higher at $4,739.50 per ounce on Monday evening, compared to $4,728.70 per ounce at the previous commodity market close, as per the official data.

The gold prices have gained 4.5% over the last five days, but are down 7% over the last three-month period.

Gold prices were trading higher on Tuesday’s market despite an elevated dollar rate, as investors continued buying safe-haven assets like gold and the benchmark US dollar amid the rising tensions in West Asia.

Data collected from the Bloomberg US dollar spot index (DYX) showed that the greenback was up 0.16% to 98.115 as of 10:18 pm (ET) on Monday, compared to the previous currency market close.

Traders tend to shift their bets from emerging markets into safe-haven assets as the rising geopolitical environment reduces their risk appetite, fuelling demand for certain assets and commodities in the market.