Oil prices have fallen today, boosted by optimism that the United States and Iran will reach a deal to end their war that has hobbled global energy supplies.
In mid-afternoon trade, the price of Brent crude was down 1.9% to just under $92 a barrel, while primary US benchmark West Texas Intermediate shaved 1.7% to just above $87 a barrel.
Oil markets have whipsawed this week as investors parse the chances of a breakthrough agreement between Washington and Tehran that could potentially resume normal shipping through the crucial Strait of Hormuz.
Those hopes had been briefly dashed by new US military strikes on Iran Wednesday night, countered by Tehran's Revolutionary Guard's targeting of an American airbase in the region.
But by yesterday evening, negotiators had edged toward a deal to extend their fragile ceasefire for 60 days, though approval from US President Donald Trump was still needed, US sources told AFP.
That led US stocks to rise yesterdayy, despite several gloomy indicators.
The US Federal Reserve's preferred inflation gauge rose in April to its highest since 2023 and first quarter economic growth being revised lower.
The combination of persistent inflation and slowing growth lowers the chances of interest rate cuts by the Fed, despite President Trump's repeated calls for lower rates to boost the economy.
Still, "recession risks are easing as oil prices moderate and the probability of worst-case scenarios fades", wrote Matthew Martin of Oxford Economics.
"While reduced risks from the war have helped, the improvement in equity prices is mostly because of a robust earnings season. The driver is overwhelmingly AI-related capital expenditure," he said.
Global AI bullishness has driven a historic rally, this week pushing the market capitalisations of chipmakers Micron and SK hynix across the $1 trillion threshold.
