Iran-US talks stall as oil tops $107

Global oil prices rose at the start of the week as stalled peace negotiations between the United States and Iran continued to disrupt Middle East energy supplies.

Brent crude futures climbed around 2 percent to $107.97 per barrel, their highest level in three weeks. The rise has increased inflation concerns and led markets to reduce expectations for interest rate cuts in major economies this year.

Despite higher energy prices, global stock markets remained supported by optimism surrounding artificial intelligence spending. Markets in Taiwan, Tokyo and Seoul followed Wall Street’s gains and reached fresh record highs.

Investors continued to favor technology stocks, especially companies linked to AI growth.

Analysts said semiconductor shares were a major driver of the rally after stronger-than-expected revenue guidance from Intel triggered renewed buying interest, particularly in Asia.

This week, markets are closely watching earnings reports from major technology companies including Microsoft, Alphabet, Amazon, Meta and Apple.

Currency markets were relatively steady, while bond markets remained cautious ahead of policy meetings by the Federal Reserve, European Central Bank, and central banks in Japan, the United Kingdom and Canada.

Most major central banks are expected to keep interest rates unchanged, though investors remain focused on whether Europe and the UK may need further tightening later this year.

The Bank of Japan is expected to maintain its policy rate at 0.75 percent, while the Federal Reserve is also projected to leave rates unchanged.

Markets are also monitoring the continued closure of the Strait of Hormuz, a vital route for global oil and gas shipments.

Shipping activity through the strait remains heavily restricted, pushing June liquefied natural gas prices for North-East Asia above $16.70 per MMBtu, up nearly 61 percent from pre-conflict levels.

Goldman Sachs has raised its year-end oil price forecast from $80 to $90 per barrel, warning that prices could rise sharply if inventories fall to extremely low levels.

Diplomatic efforts are continuing, but no major breakthrough has been reached. Reports suggest Iran may be open to an agreement on reopening the Strait of Hormuz, while nuclear negotiations have been delayed.