Key insights
- Oil prices rose after reports that Iran rejected a US proposal regarding the Strait of Hormuz. This geopolitical tension introduces supply concerns, pushing oil prices higher. Higher oil prices can contribute to inflationary pressures in the US, potentially influencing Fed policy and impacting equity valuations, particularly in energy and transportation sectors.
By Siddharth Cavale
NEW YORK, May 7 (Reuters) - Oil prices turned positive in volatile trade on Thursday after a report said Iran would not allow the U.S. to reopen the Strait of Hormuz with “an unrealistic plan.”
Brent crude futures rose 71 cents, or 0.7%, to $101.98 per barrel at 1:36 p.m. EDT (1736 GMT), while U.S. West Texas Intermediate crude rose $1.62, or 1.7%, to $96.70.
Earlier in the session, both benchmarks were down over $5 a barrel.
A senior Iranian official said Iran would not allow the U.S. to reopen the Strait of Hormuz with “an unrealistic plan” and then exit the war without paying any reparations “for all the damage inflicted on Iran,” the Wall Street Journal said, citing Iran’s state broadcaster Press TV.