Spot Brent moves closer to $104 on war tensions

Today’s headlines

What’s happening: Crude oil prices rose this morning as Iran indicated that it is still assessing a US proposal to end the conflict.

What happened: While hoping for a de-escalation in the Middle East conflict, investors remained concerned after Iran cautioned all nations against deploying military forces in the Strait of Hormuz.

Oil prices rose even against a strengthening US dollar.

Why it matters: Both Brent and WTI crude prices had eased on Wednesday on hopes that the US proposal to Iran would end the conflict. US President Donald Trump threatened to “unleash hell” if Iran does not accept the proposal.

While indicating that it was still reviewing the US proposal, Iran said that no negotiations were possible amid threats from Washington and called for a complete halt in attacks.

Meanwhile, Iran’s foreign minister Abbas Araghchi said that the country had complete authority over the Strait of Hormuz and that it remained closed to enemies amid the ongoing conflict. With the US calling to other nations to deploy their military forces in the Strait of Hormuz, Iran cautioned anyone from sending their forces into the region and intensify tensions.

Oil prices rose despite some strength in the US dollar. The US dollar index, which measures the greenback’s performance versus a basket of major peers, rose to 99.60 this morning.

The US Energy Information Administration’s (EIA) report released on Wednesday showed that crude inventories rose by 6.926 million barrels to 456.2 million barrels in the week ended March 20. This marked the fifth straight week of rise and came in higher than market expectations of 0.5 million barrels.

Spot Brent crude climbed $1.13, or 1.1%, to $103.35 per barrel this morning, while spot WTI crude prices rose $108, or 1.2%, to $91.40 per barrel.

What to watch: Investors will keep an eye on the ongoing developments related to the Middle East conflict.

Markets also await the EIA’s natural gas stockpiles change today (1830 UAE Time). Natural gas inventories, which had risen by 35 billion cubic feet (bcf) in the week ending March 13, are expected to have contracted by 49 bcf in the latest week.

The markets today

The British pound in focus today ahead of a basket of data releases

Context: The sterling continued to decline against the US dollar this morning as markets assessed the latest inflation data from the UK.

Details: Data released on Wednesday showed that the UK’s annual inflation rate steadied at 3% in February, remaining unchanged from the previous month, and came in-line with market expectations. However, the figure remains above the Bank of England’s 2% target.

The country’s annual core inflation rate accelerated to 3.2% in February, from January’s reading of 3.1%. The figure also came in higher than market estimates of 3.1%.

Factory gate prices for UK-manufactured goods rose 1.7% year-on-year in February, decelerating from 2.5% growth in the previous month. The figure was better than market expectations of an acceleration to 2.6%.

UK’s retail price index rose by 3.6% year-on-year in February, easing from the previous month’s 3.8% gain. The figure was better than forecasts of a 3.7% gain.

The BoE, which was preparing to begin interest rate cuts before the start of the Middle East conflict, had held its benchmark rate unchanged at 3.75% at its meeting earlier this month. Markets widely expect policymakers to delay rate cuts till at least the end of this year due to rising energy and commodity price amid the US-Iran war.

The GBP/USD fell 0.01% to 1.3365 this morning. The forex pair has lost around 0.88% over the past month.

What to watch: Investors await the release of data on the UK’s GfK consumer confidence index (0400 UAE Time), car production (0400 UAE Time) and retail sales (1100 UAE Time) tomorrow.

The UK’s GfK consumer confidence index, which fell to -19 in February from -16 in January, is expected to decline further to -24 in March. Car production, which contracted by 8.2% year-on-year to 65,249 units in January, is expected to grow by 8% in February. Analysts expect UK’s retail sales growth to decelerate to 2.1% year-on-year in February, from the previous month’s 4.5%.

Other Markets: US trading indices closed higher on Wednesday, with the Dow Jones index, S&P 500 and Nasdaq 100 up by 0.66%, 0.54% and 0.77%, respectively.

The news shaping the markets

Ukraine’s attack on energy facilities left around half a million people without electricity in Russia’s Belgorod region. The news sent the USD/RUB pair higher in forex trading this morning.

Japan’s stock investments by foreigners fell by ¥2,509.70 billion in the week ending March 21, following a decline of ¥1,772.5 billion in the previous week. However, the USD/KRW forex pair fell this morning.

India’s money supply grew by 10.7% in the week ending December 31, decelerating from 11.5% growth in the previous week, which sent the USD/INR pair higher in forex trading this morning.

Brazil’s consumer confidence index rose 2.0 points to 88.1 in March. This being the highest level since December 2025 exerted pressure on the USD/BRL forex pair.

Germany’s Ifo expectations index fell to 86 points in March, from 90.20 points in the previous month. Despite this being the lowest level since February 2025, the EUR/USD rose in forex trading this morning.

What else to watch today

Spain’s GDP growth rate (1200 UAE Time), Eurozone’s loans to companies (1300 UAE Time) and money supply (1300 UAE Time), Italy’s business and consumer confidence (1300 UAE Time), South Africa’s PPI (1330 UAE Time) and interest rate decision (1700 UAE Time), Turkey’s foreign exchange reserves (1530 UAE Time), Canada’s average weekly earnings (1630 UAE Time) as well as US initial jobless claims (1630 UAE Time).