Oil price climbs towards $100 as fresh US strikes on Iran dent hopes of peace deal
Oil is climbing towards $100 a barrel again after the US launched fresh attacks on Iran, with markets jittery as a deal to end the war remains out of reach.
Brent crude is up over 3 per cent this morning at $99.36 a barrel, after settling 7 per cent lower in the previous session.
Over the weekend there were renewed hopes that another ceasefire could pave the way for a peace deal, but fresh US strikes in southern Iran have pushed oil prices higher.
US Secretary of State Marco Rubio said that negotiating a deal with Iran could ‘take a few days,’ quashing hopes that an end to the conflict was imminent. He added that the Strait of Hormuz has to be open ‘one way or the other’.
Stock markets were mixed this morning. Europe’s Stoxx 600 was down 0.18 per cent, as Germany and France’s main indices slipped 0.62 and 0.72 per cent by mid-morning.
US Secretary of State Marco Rubio said a deal with Iran could ‘take a few days’
The FTSE 100 shrugged off the US strikes, rising 0.71 per cent to 10,540 points, as it played catch-up after the long weekend.
Gilt yields were steady as markets assessed the impact of a prolonged conflict on inflation and interest rates.
There’s also a ‘dose of cautious optimism [about a deal] still swirling,’ said Susannah Streeter, chief investment strategist at Wealth Club.
She added: ‘The limited nature of the military action, targeting missile launch sites and mine-laying boats, may help assuage worries the move could re-ignite hostilities.
‘For now, a ceasefire remains in place, and although it’s clearly fragile, even before these strikes both sides made it clear a deal wasn’t imminent.’
Miners, retailers and housebuilders were the biggest gainers in the UK. Endeavour Mining, Glencore and Rio Tinto climbed between 2.1 and 3.1 per cent this morning.
Kingfisher shares jumped 2.98 per cent after a mixed first-quarter trading update. The home improvement company reported a dip in sales but maintained its full-year profit guidance.
Melrose Industries led the Footsie’s biggest fallers, down over 5 per cent, after it updated investors on a potential explosion at a Californian manufacturing facility.
AJ Bell’s investment director Russ Mould said: ‘Keeping everyone safe is obviously more important than any future financial impact, but the crisis is particularly unhelpful at a time when Melrose is already under pressure thanks to the impact of the Iran war on the aviation sector.’
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