Oil approaches $100 as US–Iran talks lose momentum

Market Commentary

On the commodities front, Brent crude futures surged close to 5% to above $99 per barrel on Thursday, while WTI climbed more than 4% past $95 per barrel, bucking softer equity trends amid growing scepticism over US–Iran peace talks. Reuters reported negotiations have pivoted from a comprehensive deal – and reopening the Strait of Hormuz – to a temporary memorandum aimed solely at averting further escalation. Benchmark prices showed little reaction to President Donald Trump’s announcement of a 10-day Israeli–Lebanese ceasefire, secured after direct discussions with Lebanese President Joseph Aoun and Israeli Prime Minister Benjamin Netanyahu. This geopolitical flux continues to dominate sentiment, with traders wary of renewed disruptions in a chokepoint handling one-fifth of global oil flows.

US crude inventories fell 9.13 million barrels last week, ending seven weeks of builds, to dramatically exceed expectations of a 154 000-barrel increase (US Energy Information Administration). This sharp drawdown signals strong refinery demand and export flows, with US shipments targeting 5.2 million barrels per day in April 2026 to meet Asian and European demand for Middle East alternatives.

Precious metals presented a mixed picture: gold edged up 0.01% to $4 790.58 per ounce on safe-haven flows, while silver declined 0.75% and platinum dropped 0.95%.

Turning to equities, US stocks edged higher despite the oil spike, with the S&P 500 rising 0.18% to fresh record highs at 5 892. The Nasdaq added 0.34% near prior peaks, while the Dow gained over 110 points (0.28%) towards pre-war levels. Corporate earnings remained the focal point, tempered by hopes for US–Iran de-escalation. Energy, materials and real estate sectors outperformed, healthcare and consumer discretionary lagged. Standouts included PepsiCo (+0.30% on better-than-expected results) and Bank of New York Mellon (+1.30% on robust figures). Laggards were Charles Schwab (–3.90% on weak numbers), Abbott Laboratories (–4% post-soft guidance), and Netflix (–0.30% ahead of earnings). Megacap performance was mixed.

Asian markets built on Wall Street’s momentum amid US–Iran optimism, with technology resilience, solid corporate results and China’s economic steadiness driving the advance. The MSCI Asia Pacific Index rose 1.40%, spearheaded by tech and manufacturing powerhouses. Japan’s Nikkei surged 2.38% to 59 518.34, Hong Kong’s Hang Seng climbed 1.73% and Shanghai Composite gained 0.73%.

European indices closed broadly flat on US–Iran caution, stabilising late after President Trump’s ceasefire reveal. Novo Nordisk and SAP each rose over 3%; Hermès and Siemens added 1.30% each, and Shell advanced 1%. L’Oréal fell over 2%, dragging with dips in ASML, HSBC, Roche, and Novartis. Germany’s DAX edged up 0.35% and London’s FTSE 100 climbed 0.29%.

South Africa’s JSE All Share dipped 0.53%, weighed by Metals and Mining down 1.56% and Resources dropping 1.33%, as global commodity strength failed to lift local sentiment amid domestic pressures.