Global oil prices plunge on easing US–Iran tensions, silver rebounds

[Financial News]


On the same day, international oil prices plunged more than 4%.
The drop came as tensions between the US and Iran subsided. President Donald Trump said the US was "engaged in serious talks" with Iran, a comment that played a decisive role in pushing prices lower.
Expectations of a stronger US dollar (USD) following the nomination of Kevin Warsh as the next chair of the Federal Reserve System (the Fed), along with forecasts that the severe cold spell in the Northern Hemisphere will ease, also weighed on prices.
Brent crude oil, the global benchmark, saw its April front-month contract slide by $2.98, or 4.30%, to $66.34 per barrel. At one point during the session, the intraday loss reached as much as 7.4%.
West Texas Intermediate crude oil (WTI), the US benchmark, also slumped. The March front-month contract plunged $3.01, or 4.62%, to $62.20 per barrel.
As recently as last week, international oil prices had been surging. Trump’s decision to send an "armada" to the Middle East had raised fears of an imminent military clash between the US and Iran. The term "armada" originally referred to the Spanish Armada, and Trump used it to describe the deployment of a US aircraft carrier strike group.
According to the Financial Times (FT), Arn Rasmussen, chief analyst at Global Risk Management, explained that markets interpreted Trump’s decision not to attack Iran over the weekend, and his statement that he was in serious talks with Tehran, as a sign of "de-escalation."
Rasmussen said, "A large amount of speculative money flowed into the oil market last week," adding, "As the geopolitical outlook shifted, these investors rushed to sell."
Brent even broke above $70 per barrel last week for the first time since September of last year.
Meanwhile, the broad-based sell-off in commodities that began over the weekend showed a mixed pattern on this day.
April gold futures extended their decline, falling another 1.3% to $4,685.10 per ounce, while March silver futures rebounded, jumping 2.5% to $80.51 per ounce.
Platinum and palladium futures each gained close to 1%. Copper, by contrast, slipped 1.5% to $5.83 per pound.

dympna@fnnews.com Song Kyung-jae Reporter