US-Iran standoff sends oil up, dents stocks

Oil Prices Climb as US-Iran Negotiations Reach Impasse; Global Stocks Mixed

LONDON, Aug 11 (Reuters) — Oil prices rose on Tuesday after negotiations between the United States and Iran over a potential agreement and the reopening of the Strait of Hormuz reached an impasse, while uncertainty about inflation prospects weighed on global equity markets.

U.S. President Donald Trump on Monday set additional conditions in response to Iran’s terms for an agreement, including a requirement that Iran pay compensation related to deaths in prior conflicts, attacks, and protests. The added conditions could affect efforts to restore access to the waterway.

Brent crude futures have increased 5 percent over the past two days and traded near $88 a barrel, the highest level since July 31 and roughly 25 percent above the near-four-month lows recorded in early July.

Tony Sycamore, a market analyst at IG, described the situation as a standoff in which neither side has indicated willingness to move first. He added that the oil market could remain in a range between $75 and $95 a barrel until one side alters its position.

Wednesday’s U.S. consumer price data for July will not reflect the most recent energy price increases but may still influence expectations for the Federal Reserve’s September policy meeting. Money-market pricing currently assigns a 50 percent probability to a rate increase at that meeting.

Jonas Goltermann, chief markets economist at Capital Economics, said the data carry a greater chance of a higher-than-expected reading, which could lift rate expectations and raise concerns about slower growth combined with elevated inflation.

U.S. Treasury yields moved higher in European trading, consistent with a modest decline in global bond markets. The two-year Treasury yield rose 1 basis point to 4.253 percent, while the 10-year yield increased 2 basis points to 4.72 percent.

Deutsche Bank strategist Jim Reid noted that recent developments have shifted market pricing toward a firmer policy outlook, with both yields and commodity prices advancing after the previous week’s indications of a softer stance.

Europe’s STOXX 600 index showed limited movement in early trading and remained close to last week’s record levels. MSCI’s All-World index declined 0.1 percent. Nasdaq futures rose 0.1 percent and S&P 500 futures were unchanged. Both benchmark indexes declined on Monday.

Overnight, Nvidia announced a collaboration with six financial institutions, including BlackRock, Apollo, and Goldman Sachs, to establish funding arrangements exceeding $500 billion for artificial-intelligence infrastructure. The company provided no further details on financial terms, investment commitments, or the relationship of the planned amount to existing funding agreements.