Oil above $110

Oil above $110 a barrel, with "physical scarcity" driving prices

By Hanna Ziady

The global oil price climbed above $110 a barrel for the first time in three weeks today, as worries grow that delays in fully reopening the vital Strait of Hormuz pose mounting risks to global oil supply.

Brent crude, the global oil benchmark, was up 2.7% to above $111 a barrel at 7 a.m. ET. WTI, the US benchmark, gained 3.5% to nearly $100 a barrel.

“Physical scarcity is driving prices rather than headlines over the war,” Neil Wilson, a strategist at investment bank Saxo, wrote in a note. “Traders are increasingly watching what’s happening on the water (i.e. nothing) rather than trading the diplomatic stuff,” he added.

US President Donald Trump signaled Monday that he was unlikely to accept Iran’s latest proposal to end the conflict, two people familiar with the matter told CNN. Tehran proposed a plan that would reopen the Strait of Hormuz while leaving questions about its nuclear program for later negotiations.

Investors’ concerns that the United States and Iran are no closer to reaching a deal are weighing on stock markets.

At 7a.m. ET, Nasdaq and S&P 500 futures pointed to a modestly weaker open, while Dow futures traded higher. “Markets have been latching on to any signs of peace talks, and the absence of that is raising fears they’re not going to happen,” Deutsche Bank analysts wrote in a note.

Major European indexes were trading modestly higher in afternoon trade, while most leading indexes in Asia closed lower.