Oil Prices Hit Five-Month High Near $112, Then Swing $6 on Unverified Iran Peace Report
Brent crude briefly touched just under $112 a barrel early Tuesday, a five-month high, before tumbling $6 on an unverified report of a Qatar-Pakistan peace proposal between the U.S. and Iran and then bouncing back to about $108, Barron's reported.
Oil prices whipped around Tuesday, briefly touching a five-month high just under $112 a barrel before dropping $6 in a matter of hours and then rebounding to about $108, all before noon.
The trigger was an unverified report from the Qatari news agency The New Arab that Qatar and Pakistan had presented a “middle-ground proposal” that, according to the report, meets the demands of both the U.S. and Iranian sides. When other reports on social media dismissed the story later in the morning, prices reversed their decline, Barron’s reported.
A big move, but a normal one for this market
The size of the swing looks dramatic but is not unusual for oil right now. Brent is up about 50 percent since the Iran war began, and Dow Jones Market Data puts a typical daily swing at about 3 percent in either direction, with intraday moves averaging about 5.4 percent, according to Barron’s.
Reuters reported earlier Tuesday that oil had hit the five-month high as traders braced for more conflict in the Middle East, while street riots and curfews in Paris rattled investors already worried about France’s debt burden.
What a real deal would change
A genuine and durable peace deal would move the oil market and the industries absorbing higher prices, from shipping to travel, Barron’s noted, adding: “But we’re not there yet.”
The rebound leaves crude well above where it traded before the current conflict, keeping fuel costs high for consumers and businesses heading into the final stretch of the year.
Reporting based on coverage by Barron’s and Reuters.
