Oil falls and the FTSE 100 trades higher

Following the Iran-Israel ceasefire oil prices have eased as the markets are more confident there will not be a disruption to supplies.

On Tuesday morning Tuesday Brent fell by 4% and the price of a barrel fell to $69 after a sharp rise on Monday.

The FTSE 100 traded higher on Tuesday morning up by 40.5 points to 8798.5 as there was gains from Asia overnight.

Matt Britzman, senior equity analyst at Hargreaves Lansdown, said, “Despite the turmoil over the weekend, oil prices were quick to shift into reverse – an early signal that markets were betting on de-escalation sooner rather than later.

“Iran’s response notably refrained from targeting any oil facilities or the important Strait of Hormuz, and the jump in prices over the past few days has mostly been erased now, positive news for the US administration and investors alike.

“Lower oil prices are a key component to keep inflation down and something the US Fed will have one eye on when thinking about whether to cut interest rates at the next meeting in July.”

Kathleen Brooks, research director at XTB said it is “still a very fluid situation”.

She added, “Brent crude had rallied nearly 20% in the past month as a war premium was attached to the price of oil, which is now being unwound.

“However, if there are more signs that the ceasefire is not holding, we could see the oil price resume its uptrend.”