Oil Extends Rally for Third Session as Iran Talks Reach Deadline
Crude oil maintained its upward trajectory for a third straight session in choppy markets, as market participants exercised caution ahead of the US President's deadline for Iran to finalize a peace agreement. Hopes for a ceasefire are being weighed against persistent risks of regional escalation.
Brent crude futures gained 1.4 percent to hover around $111 per barrel, having fluctuated between positive and negative territory before the 8 pm Eastern Time deadline on Tuesday.
In a divergent move, precious metals prolonged their recent slump. Spot gold declined by 0.5 percent to $4,627.33 per ounce, and silver dropped 1.2 percent to $71.96. Platinum and palladium also traded in the red.
Investor sentiment stays fragile, with uncertainty surrounding potential escalation, possible oil supply disruptions, and future policy responses capping bullish conviction, even as tentative ceasefire signals emerge. The focus remains intently on the Strait of Hormuz, a critical chokepoint for global oil shipments. The US administration has consistently stated that any accord must guarantee the free and unimpeded passage of vessels through this strategic waterway.
President Trump indicated that negotiations with Tehran were progressing positively before the deadline, yet he reaffirmed that restoring full access to the Strait of Hormuz is a non-negotiable condition for any deal. He also cautioned about the possibility of military action should Iran reject US terms.
This vital maritime corridor, connecting the Persian Gulf to international waters, has faced significant disruptions since hostilities commenced, sparking worries about global energy security. Tehran has thus far dismissed US proposals and threatened to intensify attacks across the Middle East if subjected to further strikes.
Notably, despite the downward pressure on bullion, there are nascent indications of bargain-hunting activity. Holdings in physically-backed gold exchange-traded funds recorded an increase last week, marking the first inflow since the conflict erupted.
