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Oil prices drop on world markets

16 May 2025 10:18 (UTC +04:00)

Oil dropped over 2% on Thursday as a potential U.S.-Iran nuclear deal raised the prospect of increased global crude supply, and Wall Street indexes were mixed in choppy trading, APA-Economics reports citing Reuters.

European shares reversed losses to end higher, with corporate earnings in the spotlight, and gold prices jumped over 1%.

U.S. producer prices fell unexpectedly in April and retail sales were mixed, data showed on Thursday.

Global equities (.MIWD00000PUS), opens new tab rose 0.3%, while emerging market stocks eased.

U.S. Federal Reserve officials feel they need to reconsider the key elements around both jobs and inflation in their current approach to monetary policy, Chair Jerome Powell said during opening remarks at a two-day conference.

Russian President Vladimir Putin spurned a challenge to meet face-to-face with Ukrainian President Volodymyr Zelenskiy in Turkey, dealing a blow to prospects for a peace breakthrough.

Brent futures closed down over 2% as U.S. President Donald Trump, in the midst of a Middle East tour, said he was getting close to securing a deal with Iran - and that Tehran had "sort of" agreed to the terms.

BNP Paribas economist Paul Hollingsworth said the drop in oil compounded the deflationary pressures already in play in places like Europe where U.S. tariff worries are lingering.

"Everyone is finding it difficult to navigate the volatility in the announcements," Hollingsworth said.

In Europe, the continent-wide STOXX 600 index (.STOXX), opens new tab rose 0.6%, recovering from earlier losses that were led by the energy sector. Most major regional indexes were higher.

Retailer Walmart posted solid first-quarter sales numbers, but it became the latest to warn about the high costs of Trump's trade tariffs and did not provide second-quarter profit guidance due to the uncertainty.

"We may be entering a period of more frequent, and potentially more persistent, supply shocks," the Fed's Powell said.

Britain's economy grew by a quicker-than-expected 0.2% in March, data showed. Industrial production in the 20-nation euro zone also rose far more than predicted although overall first-quarter GDP growth disappointed.

The yield on the benchmark German 10-year Bunds fell 1.2 basis points to 2.614%.

Yields on benchmark U.S. 10-year notes fell 9.1 basis points to 4.437% amid worries that Trump's budget package would add trillions of dollars to the U.S. debt.