FX.co ★ Oil Prices Pare Some Gains But Remain Elevated

Oil prices trimmed part of their advance but remained sharply higher on the first trading day of June, with WTI crude futures up 6% and trading above $92 per barrel. Futures had earlier jumped more than 8% after Iranian media reported that Tehran had suspended communications with Washington following attacks in Lebanon and was preparing to completely close the Strait of Hormuz, stoking fears of further disruptions to global oil supplies. Crude later pulled back from its session highs after US President Trump said Israel and Hezbollah had agreed to halt attacks against each other in Lebanon and that talks with Iran were still ongoing. Trump also downplayed Iran’s decision to suspend indirect negotiations, saying he did not care whether the talks had ended. Nevertheless, market anxiety remained elevated, as the latest developments cast doubt on the prospects for an interim peace agreement, particularly amid fresh clashes involving US and Iranian forces near the Strait of Hormuz.