The value of Brent crude oil briefly surpassed $126 US per barrel recently, marking its highest point since March 2022, before retracting due to stalled negotiations between the U.S. and Iran, casting doubt on the reopening of the Strait of Hormuz and a lasting resolution to the Middle East conflict. The price for June delivery of Brent crude later decreased to around $114 US per barrel, significantly higher than the pre-war level of approximately $70 US per barrel.
Simultaneously, gasoline prices are steadily increasing. In Canada, the average price for a liter of gas stood at $1.814 on Thursday morning, as reported by GasBuddy, reflecting a 2.9-cent rise from the previous day and a 46.4-cent increase from a year earlier. In British Columbia, prices averaged slightly above $2 per liter.
Across the border in the U.S., the average gasoline price hovered around $4.345 per gallon. Forecasts indicate further price hikes, with the Greater Toronto Area expected to see prices at $1.899 per liter, Halifax at $1.897, and Edmonton at $1.859.
The ongoing conflict, characterized by Iran’s control of the Strait of Hormuz and U.S. blockades of Iranian ports, continues to drive oil prices upward. Reports hinting at potential escalation by U.S. President Donald Trump on Thursday dampened hopes for a swift resolution to the crisis.
Traders are actively engaging in transactions for various oil contracts spanning several months. In the primary market for Brent crude, the price reached $114.70 per barrel for July delivery before settling at $109.80, a decrease of 0.6%, despite remaining elevated. The highest price reached during the conflict for the most traded Brent contract so far has been $119.50 last month.
In North America, stock markets saw positive movements on Thursday following strong earnings reports from major companies like Alphabet. The S&P 500 rose by 0.1%, nearing its recent all-time high, while the Dow increased by 0.8% and the Nasdaq composite dipped by 0.3%.
Shares of companies such as Caterpillar, Eli Lilly, O’Reilly Automotive, and Royal Caribbean surged by over 6% after reporting profits that exceeded analysts’ projections. Treasury yields eased as oil prices relinquished their substantial overnight gains.
International stock markets exhibited mixed performances, with the FTSE 100 in the UK climbing 1.3% after the Bank of England maintained its main interest rate at 3.75% to assess the economic impact of the Iran conflict. Germany’s DAX rose by 0.7%, while France’s CAC 40 slipped by 0.2% following the European Central Bank’s decision to keep interest rates unchanged. Asian markets experienced varied results, with Hong Kong’s Hang Seng declining by 1.3% and the Shanghai Composite index closing 0.1% higher.
