Market News

Oil prices moved lower on Tuesday, giving back much of the previous session’s gains as investors assessed whether the halt in attacks between Iran and Israel would hold.

Brent crude fell to around $92.92 a barrel, while US West Texas Intermediate traded near $89.57. The pullback came after both Iran and Israel said they had stopped attacks on each other following an appeal from US President Donald Trump, although both sides warned that hostilities could resume.

The shift in tone helped reduce some of the immediate risk premium that had built into oil markets. Prices had jumped sharply on Monday after renewed Israeli strikes on Iran and further attacks in Lebanon raised fears of a wider conflict and potential supply disruption.

Despite the softer move, traders remain cautious. The Middle East remains central to global energy flows, and any renewed escalation could quickly bring buyers back into the market.

Supply concerns are still a major part of the story. Iran has continued to restrict most shipping through the Strait of Hormuz, a key route for global crude oil and liquefied natural gas. The United States has also maintained restrictions around Iranian ports, adding another layer of uncertainty for energy markets.

Analysts have warned that global oil inventories remain tight, meaning any fresh disruption could have an outsized impact on prices. If stockpiles continue to fall and conflict risks return, Brent could once again test higher levels.

At the same time, weaker demand signals from China helped limit upside. Chinese crude imports reportedly dropped sharply last month, reaching their lowest level in years, as refiners relied more heavily on existing reserves.

For now, oil markets are balancing two opposing forces: easing geopolitical tensions on one side, and ongoing supply risks on the other. Traders are likely to remain highly sensitive to any new headlines from the Middle East, especially around shipping routes, port access and military activity.

Market takeaway: Oil prices have cooled as immediate conflict fears ease, but the market remains vulnerable. Any renewed escalation in the Middle East or signs of tighter supply could quickly revive upward pressure on crude.

The US dollar edged lower on Tuesday, pulling back from a two-month high as investor sentiment improved and markets turned their attention to key US inflation data due later this week.

The US Dollar Index, which measures the greenback against a basket of major currencies, slipped slightly after recently climbing to its strongest level since early April. The move came as easing geopolitical tensions in the Middle East helped support risk appetite across global markets.

Reports that Iran and Israel have paused attacks for now have helped calm investor nerves, reducing demand for traditional safe-haven assets such as the dollar. When market sentiment improves, traders often rotate back into risk-sensitive assets, which can weigh on the greenback.

Focus now shifts to US inflation figures, with the Consumer Price Index due on Wednesday and Producer Price Index data set to follow on Thursday. These releases could play a major role in shaping expectations for the Federal Reserve’s next policy move.

Last week’s stronger-than-expected US jobs data had supported the dollar by reinforcing expectations that the Fed may keep interest rates higher for longer. However, if inflation shows signs of cooling, markets may increase bets on future rate cuts, which could put further pressure on the currency.

The euro gained modestly against the dollar, while the Japanese yen remained under close watch as traders continued to monitor potential intervention risk from Japanese authorities.

For now, the dollar remains supported by strong US economic data, but traders are becoming more cautious ahead of the CPI release. A hotter inflation reading could revive dollar strength, while softer data may encourage further selling.

Market takeaway: The dollar has eased from recent highs as risk sentiment improves, but this week’s US inflation data could determine the greenback’s next major move.