Oil Nears $90 on Gulf Tensions

Oil prices forged higher as concern over disruption to energy flows in the Middle East outweighed hopes that governments will agree to a record release of oil reserves.

Futures for Brent crude, the global benchmark, climbed to around $90 a barrel Wednesday morning, The Wall Street Journal reports.

U.S. officials said Iran has placed mines in the Strait of Hormuz, and the U.K. said two cargo ships were hit by projectiles near the key waterway.

Countries in the International Energy Agency are set to decide Wednesday whether to release emergency oil reserves to calm energy markets. The agency has proposed tapping 400 million barrels of oil, its largest-ever coordinated release, with a decision from member countries expected today.

Stock futures flitted between small gains and losses. Oracle shares rallied in premarket trading after the company reported strong demand for cloud computing used to train and run artificial intelligence.

U.S. equities have held up since the initial U.S.-Israeli attacks on Iran, with the Dow Jones Industrial Average down less than 3% as of Tuesday’s close, while the S&P 500 is off 1.4% and the Nasdaq Composite is little changed.

“There is this almost emotional expectation that this will end soon,” said Chris Iggo, chief investment officer for core investments at AXA IM, part of BNP Paribas Asset Management.

If the U.S. can’t engineer a speedy resolution to the energy crisis, markets will eventually price in an impact to corporate earnings as well as higher inflation, he said.

“The problem we've had in the past with prolonged oil shocks is that they do typically lead to a big growth slowdown,” he said.

Investors are also awaiting U.S. inflation data for February, due out at 8:30 a.m. ET.