Oil prices dropped sharply and stocks in Asia jumped on Tuesday as investors reacted to signals of a possible de-escalation of the war in the Middle East.
President Trump said on Tuesday that negotiations to end the war were taking place and that the Iranians would like “to make a deal.” The United States sent Iran a 15-point plan for ending the war in the Middle East.
And in a letter circulated to the United Nations’ maritime organization on Tuesday, Iran said it was willing to let ships not tied to the United States or Israel to pass through the Strait of Hormuz. The letter was dated March 22.
Oil reverses price gains.
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The price of Brent crude, the global benchmark for oil, was about $94 a barrel on Wednesday, down 6 percent. On Tuesday, Brent rose to $104.49 a barrel, up over 4 percent.
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West Texas Intermediate crude, the U.S. benchmark, was around $88 a barrel on Wednesday, or 5 percent lower. The W.T.I. price rose to $92.35 a barrel on Tuesday, settling almost 5 percent higher.
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Investors and analysts are focused on the Strait of Hormuz, the narrow waterway between Iran and Oman that is a vital trading route for oil and natural gas that normally carries as much as one-fifth of the world’s oil supply. Shipping traffic exiting the Persian Gulf through the strait has been effectively halted since the war began on Feb. 28. More recently, attacks on energy infrastructure, by both Israel and Iran, have raised concerns about longer-lasting damage to the world’s oil and gas supply.
Stocks in Asia rise.
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Stocks in Asia were higher on Wednesday. The Nikkei 225 in Japan and the Kospi index in South Korea jumped about 3 percent. Stocks in Hong Kong and China were up 1 percent.
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S&P 500 futures contracts, which let investors bet on the direction of the market when stocks resume trading in the United States, were up 0.8 percent.
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On Tuesday, the S&P 500 fell 0.3 percent, recovering from a drop of almost 1 percent earlier in the day. Stocks in Europe were mixed and higher in Asia.
Gasoline prices went up.
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Gas prices rose on Tuesday, jumping to a national average of $3.98 a gallon, according to the AAA motor club. The increase raised the cost for drivers 34 percent since the war began.
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Diesel prices have increased even more quickly and stood at $5.35, up 42 percent since the start of the war.
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