Tokyo [Japan], May 22, (ANI): Oil prices climbed on Friday as uncertainty around peace negotiations continued to cloud the market, even as reports suggested that differences between the two sides have narrowed.
The sticking points over the uranium stockpile and control of the critical Strait of Hormuz continue to pose challenges to a breakthrough.
Secretary of State Marco Rubio said there have been "good signs" that have emerged from the talks, but he categorically said that a toll system in the Strait of Hormuz is unacceptable.
US President Donald Trump said that the uranium stockpile will eventually be recovered, while Iran continued to maintain that it is meant for peaceful purposes.
"We will get it. We don't need it, we don't want it. We'll probably destroy it after we get it, but we're not going to let them have it," Trump said at the White House.
The International Energy Agency warned that the oil could enter the "red zone" as peak summer demand, along with a lack of any new supply from the Middle East, could push up prices.
Brent crude jumped to $104.2, rising around 1.6%, while WTI crude was trading at $97.43, up more than a per cent.
Oil prices had traded lower on Thursday, falling 2% on hopes that positive signs from US-Iran peace negotiations would calm the markets. However, the lack of any diplomatic progress cast doubt among investors who are weighing the prospects of a prolonged uncertainty in the Middle East.
Citi, in a note, said that Brent could trade up to $120 a barrel in the near term.
"The timing and pace of the reopening of the Strait of Hormuz depends largely on the Iranian regime and is therefore difficult to call. It appears increasingly likely, in our view, that the Iranian regime will disrupt SoH flows for some time, but will eventually deal, as it balances the benefits of keeping the SoH disrupted relative to the benefits of re-opening the SoH," the note said.
Higher energy prices have stoked inflation fears globally as central banks become cautious. Bond markets have reacted sharply to the uncertainty and volatility in the energy markets, with yields climbing anticipating a hike in interest rates. (ANI)