Oil market faces volatility amid uncertainties

WASHINGTON

Oil surged in morning trading Monday following U.S. President Donald Trump’s rejection of Tehran’s response to the latest U.S. proposal on ending the war in Iran.
Brent crude, the international standard, gained 4.2 percent to $105.57 per barrel. It was roughly $70 per barrel before the war began in late February.
“Trump's swift rejection of these counter-demands underscores the wide gulf between both sides, pointing to a risk of prolonged uncertainty rather than rapid de-escalation," said Lloyd Chan at Japanese bank MUFG.
"For oil markets, this suggests a persistent geopolitical risk premium as Hormuz disruptions drag on," Chan said.
“There remains a glimmer of hope that talks between Trump and Chinese President Xi later this week could yield positive results on Iran,” ING commodities analysts Warren Patterson and Ewa Manthey wrote in a note Monday.
“The hope is that China can use its influence over Iran to push it closer towards a peace deal,” they said. “Clearly, this is easier said than done.”
The oil market is still very much “heavily headline-driven,” the pair added.