Oil prices fluctuated on Thursday, testing levels not seen since the war in Iran started in February.
After surging over the past four months, oil prices have retreated sharply since the United States and Iran reached a preliminary agreement this month to reopen the Strait of Hormuz, a critical trading route for oil and gas exports from the Middle East.
Traffic through the strait has moved steadily higher this week. On Wednesday, about 70 vessels transited the waterway, including 29 tankers, making it the busiest day since March 1, according to Kpler, a maritime data company.
The slide in oil prices has gathered pace as efforts to clear a backlog of ships trapped in the Persian Gulf have advanced, easing concerns about supply disruptions.
On Thursday, the price of Brent crude, the global benchmark for oil, rose 0.5 percent to about $74 a barrel. In an otherwise quiet trading session, prices at one point dipped just below $72.48 a barrel, the daily settlement price on the eve of the first U.S.-Israeli strikes on Iran.
West Texas Intermediate crude, the U.S. benchmark, rose 0.4 percent to around $70 a barrel. This grade of crude was just over $67 per barrel on the day before the start of the war.
Tech stocks surge.
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The S&P 500 rose 0.6 percent when stocks began trading in the United States on Thursday. Strong earnings from the U.S. chipmaker Micron Technology, released after the market closed on Wednesday, appeared to reignite enthusiasm for artificial intelligence-related companies. The tech-heavy Nasdaq index was also up around 0.6 percent at the open.
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Stocks in Asia rallied. In South Korea, the benchmark KOSPI gained over 6 percent, while Japan’s Nikkei 225 moved 4.6 percent higher. Shares in Taiwan rose 0.5 percent.
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In Europe, the Stoxx 600, a broad index that tracks the region’s largest companies, rose nearly 1 percent, and the FTSE 100 in Britain was up over 0.7 percent.
Gasoline prices slip.
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U.S. gas prices fell slightly on Thursday, to a national average of $3.92 a gallon, according to the AAA motor club. Gasoline prices are still up more than 30 percent since the start of the war.
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Gas prices don’t move in lock step with crude, usually trailing increases or drops by a few days.
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The average price of diesel fell two cents to $4.96 on Thursday, up 32 percent since the start of the war.
What they are saying: Not all freight rates will respond the same way.
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In a report on supply-chain stress stemming from the turmoil in shipping in the Persian Gulf, Grace Zwemmer of Oxford Economics noted that transit through the Strait of Hormuz “remains more costly and riskier than before the war due to the potential presence of sea mines and elevated risk premiums.”
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The drop in energy prices “will bring down freight rates in time,” she added, because fuel is typically the largest operating expense for vessels. But not all freight rates will respond the same way: Tanker rates rose the fastest and have subsequently moderated significantly, while rates for container ships only started to edge up more recently and could take longer to return near prewar prices.
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