Daily Fundamental Analysis: Oil Prices Plummet as Trump Announces a Ceasefire

Oil prices fell 11% after Iran’s missile strike on a U.S. base in Qatar caused no casualties, signaling possible de-escalation in the Middle East. U.S. crude oil dropped to $64.00, while Brent fell to $67.50, below pre-June 13 conflict levels. Crude prices had initially surged at the market open on fears of further escalations, with Brent climbing 5% to $81 before retreating.

Markets avoided the worst-case scenario of Iran closing the Strait of Hormuz, through which 20% of global oil consumption flows. Trump announced Tuesday that the ceasefire with Iran was in effect

Markets rallied after Trump announced an Israel-Iran ceasefire timeline, boosting U.S. futures and Asia-Pacific markets Monday night.

Asia-Pacific markets rose Tuesday after Trump announced an Israel-Iran ceasefire agreement. Japan’s Nikkei 225 rose 1.59%, Topix 1.32%. South Korea’s Kospi gained 2.09%, Kosdaq 1.71%. Australia’s S&P/ASX 200 added 0.69%.

U.S. futures climbed after Trump’s announcement: Dow futures added 0.3%, S&P 500 futures 0.4%, and Nasdaq 100 futures 0.6%.

Overnight, U.S. markets closed higher as investors welcomed Iran’s restrained response to weekend U.S. attacks. The Dow rose 0.90% to 42,582, S&P 500 gained 0.97% to 6,026, and Nasdaq added 0.94% to 19,631.

In the Forex market, the US dollar fell sharply against major currencies in yesterday’s trading and losses intensified following the ceasefire announcement. EURUSD jumped 185 points to 1.1620. GBPUSD is up 188 points so far nearing 1.3600 psychological level.

Gold prices also fell in yesterday’s trading as the precious metal dropped to $3,324 on hopes of de-escalation in the Middle East. Silver maintains its $36 levels thanks to ongoing industrial demand.