Oil prices rose on Thursday, reversing earlier declines as markets grew skeptical of the ability of peace talks between the United States and Iran to reach an agreement ending the war that has disrupted energy supplies from the Middle East.

Brent crude contracts climbed by 67 cents, or 0.7%, to reach $95.60 per barrel at 12:05 GMT. U.S. West Texas Intermediate (WTI) crude contracts also rose by 17 cents, or 0.2%, to $91.46 per barrel.

John Evans, an oil market analyst at PVM, said: "We remain skeptical of any quick resolution to this war. Every headline is met with a counter-headline."

The U.S.-Israeli war on Iran has caused unprecedented disruption in global oil and gas markets, leading to the suspension of navigation through the Strait of Hormuz, through which approximately 20% of the world's oil and liquefied natural gas (LNG) flows normally pass.

Prospects for Resuming Peace Talks

U.S. and Iranian officials were considering returning to Pakistan for a new round of talks as early as the upcoming weekend. The Pakistani army chief also arrived in Tehran on Wednesday acting as a mediator.

A source familiar with the matter in Tehran told Reuters that Iran might consider allowing ships to sail freely through the Omani side of the Strait of Hormuz if an agreement is reached to prevent a renewal of the conflict, following the start of a two-week ceasefire on April 8.

In another sign of potential de-escalation of military actions, the Israeli government held a meeting on Wednesday to discuss the situation in neighboring Lebanon, according to a senior Israeli official, more than six weeks after the outbreak of the war with the Iranian-backed Hezbollah.

Analysts at ING bank estimate that about 13 million barrels per day of oil flows have been disrupted due to the closure of the Strait, after accounting for pipeline diversions and the limited number of tankers that managed to transit.

With the United States announcing a blockade on Iranian ports following the collapse of peace talks over the weekend, these disruptions could worsen, although some tankers under U.S. sanctions have managed to pass.

U.S. Treasury Secretary Scott Bessent stated that Washington will not renew waivers that allowed the purchase of some Iranian and Russian oil.

In a further sign of tight global supplies of oil and its derivatives, U.S. Energy Information Administration data showed that inventories of oil, gasoline, and distillates fell last week, as countries sought to compensate for affected supplies, leading to an increase in exports and a decline in imports.

Significant disagreements remain between the United States and Iran despite some progress in talks, according to an Iranian official who stated on Thursday that divisions persist, particularly regarding Tehran's nuclear ambitions, which contributed to cooling market optimism.

The euro briefly rose above the $1.18 level after eight consecutive sessions of gains, but later retreated by 0.1% to settle below that mark.

Meanwhile, the British pound remained nearly stable at $1.3553, following the release of data showing that UK economic growth in February exceeded expectations.

Both currencies remained near their highest levels since before the outbreak of the war between Iran and the United States in February.

In contrast, the dollar index — which measures the performance of the American currency against a basket of six major currencies — rose by 0.15% to reach 98.15 points. This followed eight consecutive sessions of decline through Wednesday, as the currency gave up most of its war-driven gains with investors returning to higher-risk assets amid a temporary truce.

Khoon Goh, head of Asia research at ANZ Bank, said: "Markets are now largely ignoring the conflict and are pricing in the probability of reaching some kind of settlement."

He added: "As the risk premium associated with the war recedes, we may see further pressure on the dollar and a resumption of the downward trend that actually began last year."

Regarding Asian currencies, the Japanese yen stabilized at 158.96 against the dollar after the Japanese Finance Minister announced that her country had agreed with the United States to intensify communication regarding exchange rates following her meeting with U.S. Treasury Secretary Scott Bessent.

In China, data showed that the economy grew by 5.0% during the first quarter, surpassing analyst expectations, supported by strong exports and stimulative policies.

The offshore Chinese yuan stabilized at 6.8187 against the dollar, near its highest level in three years.

The Australian dollar — often viewed as a proxy for global risk appetite — also rose to a four-year high of $0.7197 after March employment data largely met expectations, bolstering market bets on the probability of the Reserve Bank of Australia raising interest rates again in May to approximately 70%.

Gold prices rose in European markets on Thursday, resuming the gains that paused yesterday and approaching a four-week high once again, moving into positive territory thanks to the decline of the American currency in the foreign exchange market.

This comes amid anticipation of new developments regarding the talks between the United States and Iran, as intensive diplomatic efforts continue to push for a new round of peace negotiations following the stumbling of the previous round hosted by Pakistan.

Price Overview

- Gold Prices Today: Gold metal prices rose by 1.0% to ($4,838.42), from the opening level of ($4,791.26), and recorded a low of ($4,791.10).

- Upon price settlement on Wednesday, gold prices lost about 1.05% due to correction and profit-taking operations, after having earlier recorded a four-week high of $4,871.34 per ounce.

The U.S. Dollar

The dollar index fell on Thursday by more than 0.2%, deepening its losses for the ninth consecutive session and recording a six-week low of 97.83 points, reflecting the continued drop in the levels of the American currency against a basket of global currencies.

Optimism has increased in the markets regarding the probability of the United States and Iran reaching a peace agreement, prompting investors to reduce their holdings of the American currency as a safe haven and move toward higher-risk assets.

U.S. President Donald Trump stated that the U.S.-Israeli war on Iran is "about to end," while the White House expressed optimism about the possibility of reaching a deal, noting the likelihood of additional rounds of direct talks in Pakistan.

Khoon Goh, head of Asia research at ANZ Bank, said: Markets are now essentially ignoring the conflict and expecting some kind of settlement. Goh added: With markets pricing out the impact of the war, we may see more pressure on the dollar and a resumption of the downward trend that began roughly last year.

U.S. Interest Rates

- According to the FedWatch tool of the CME Group: the pricing of the probabilities of keeping U.S. interest rates unchanged at the April meeting is currently stable at 99%, and the pricing of the probabilities of raising interest rates by about 25 basis points is at 1%.

- In order to re-price those probabilities, investors are closely following the release of more economic data from the United States.

Gold Performance Expectations

Kelvin Wong, senior market analyst for Asia Pacific at OANDA, said: The main driver (for the rise in gold prices) is optimism regarding a ceasefire between the United States and Iran.

Wong added: If we start to see a breakout above $4,900, a further potential rise toward the next intermediate resistance zone, which lies at the psychological level of $5,000, cannot be ruled out.

SPDR Fund

Gold holdings at the SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, increased on Wednesday by about 2.28 metric tons, marking the second consecutive daily increase and bringing the total to 1,051.76 metric tons, which is the highest level in a week.

The euro rose in European markets on Thursday against a basket of global currencies, extending its gains for the ninth consecutive day against the U.S. dollar and recording its highest level in seven weeks, amid a positive atmosphere dominating global markets due to optimism regarding the possibility of the United States and Iran reaching a peace agreement.

The American currency continues its losses as the White House's optimism regarding a peace deal with Iran has bolstered sentiment and encouraged investors to abandon their safe-haven positions while awaiting new developments concerning the intensive talks between Washington and Tehran.

Following the recent decline in global oil prices, indications are increasing that inflationary pressures on monetary policy makers at the European Central Bank (ECB) are receding, and the probability of raising European interest rates this year has declined.

Price Overview

- Euro Exchange Rate Today: The euro rose against the dollar by 0.2% to ($1.1824), the highest since February 27, from today's opening price of ($1.1799), and recorded a low of ($1.1795).

- The euro ended Wednesday's trading up by less than 0.1% against the dollar, marking its eighth consecutive daily gain—the longest streak of daily gains this year—amid positive developments regarding the U.S.-Iranian talks.

The U.S. Dollar

The dollar index fell on Thursday by more than 0.2%, deepening its losses for the ninth consecutive session and recording a six-week low of 97.83 points, reflecting the continued drop in the levels of the American currency against a basket of major and minor currencies.

Optimism has increased in the markets regarding the probability of the United States and Iran reaching a peace agreement, prompting investors to reduce their holdings of the American currency as a safe haven and move toward higher-risk assets.

U.S. President Donald Trump stated that the U.S.-Israeli war on Iran is "about to end," while the White House expressed optimism about the possibility of reaching a deal, noting the likelihood of additional rounds of direct talks in Pakistan.

Khoon Goh, head of Asia research at ANZ Bank, said: Markets are now essentially ignoring the conflict and expecting some kind of settlement. Goh added: With markets pricing out the impact of the war, we may see more pressure on the dollar and a resumption of the downward trend that began roughly last year.

European Interest Rates

- With the decline in global oil prices, the money market pricing of the probability of the European Central Bank raising European interest rates by about 25 basis points in April fell from 35% to 15%.

- In order to re-price the above probabilities, investors await the release of more economic data in the eurozone regarding the levels of inflation, unemployment, and wages.