Oil prices climbed more than 1% Monday after President Donald Trump canceled plans to send envoys to Pakistan for peace talks with Iran over the weekend, pushing Brent crude back to $107 a barrel and keeping geopolitical pressure on global energy markets.
West Texas Intermediate futures rose about 1.5% to almost $96 a barrel. Brent crude gained about 1.6% to $107 just above $107 a barrel.
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Trump announced Saturday he was scrapping plans to dispatch special envoy Steve Witkoff and Jared Kushner to Islamabad for ceasefire negotiations, saying the talks could take place by phone instead. "Too much time wasted on traveling, too much work!" Trump wrote on Truth Social. "Nobody knows who is in charge, including them. Also, we have all the cards; they have none! If they want to talk, all they have to do is call!!!" Iran's Foreign Ministry spokesman Esmaeil Baqaei said no meeting between Tehran and Washington is currently planned.
Near the Strait of Hormuz, seizures of two container ships by Iran's Islamic Revolutionary Guard Corps added a new flashpoint to an already volatile region, with the waterway serving as a critical conduit for the world's crude supply.
Late Sunday, Axios reported that Iran had offered a new proposal to the U.S. suggesting the Strait of Hormuz be reopened while deferring nuclear talks. Rich Privorotsky of Goldman Sachs $GS wrote in a note that the offer would give the U.S. an "out" if the aim is simply to reopen the shipping route, "but I would think this is a bit of a non-starter if the terms mean flows still run through Iranian control route," according to MarketWatch.
Stuart Kaiser, who leads equity trading strategy at Citi, told MarketWatch that the gap between energy stocks and the broader market has largely closed, with shares in the sector reverting to moving in step with crude prices rather than outpacing them.
Heading into Monday's open, the picture for U.S. equity futures was uneven, with the S&P 500 contract hovering just below unchanged, Dow futures posting modest declines, and Nasdaq $NDAQ-100 futures moving slightly into positive territory. Both the S&P 500 and the Nasdaq Composite notched record closing levels to cap last week's trading. Month-to-date through April, gains have been broad-based: the S&P 500 has added more than 9%, the Nasdaq is ahead by over 15%, and the Dow has climbed more than 6%.
The oil market moves come at the start of a week heavy with earnings and policy decisions. Wednesday's calendar is dominated by earnings from Alphabet $GOOGL, Amazon $AMZN, Meta $META, and Microsoft $MSFT. Separately, the Federal Reserve wraps up its two-day policy meeting the same day; traders widely expect policymakers to leave the benchmark rate unchanged in its current 3.50% to 3.75% target band.