Oil prices fall back to US$80 per barrel amid optimism over Mideast peace deal

Oil prices were sinking again Tuesday, pulling back to US$80 per barrel for the first time since early March.

The price for a barrel of the global benchmark Brent crude fell 3.6 per cent in trading Tuesday morning as optimism continues following the tentative deal reached between the United States and Iran that will hopefully reopen the Strait of Hormuz at the end of the week and get the global flow of oil going again.

After trading at US$80.20, the price dipped below US$80 by mid-morning.

West Texas Intermediate was trading below US$76 per barrel, while Western Canadian Select was trading below US$60 per barrel.

The price of WTI, which was trading at US$67 before the war, spiked to over US$120 during the conflict.

Significant hurdles remain in the negotiations to end the war, including what to do with Iran’s nuclear program.

But the hope on Wall Street is that this agreement will mean a long-term fix to a conflict that has worsened inflation around the world.

The price of Brent crude has fallen sharply from its $100-plus level of a few weeks ago, though it could still take months for the energy industry to get back to full speed.

The tentative deal to end the war in the Middle East comes as the U.S. Federal Reserve begins meeting on Tuesday to determine what to do with interest rates — with an announcement on the decision scheduled for Wednesday.

It will be the first meeting under the Fed’s new chair, Kevin Warsh, who was nominated by President Donald Trump.

Trump has been pushing for lower interest rates, which would give the economy a boost but also threaten to worsen inflation.

The widespread expectation, though, is that the Fed will leave its main interest rate alone again.

The Bank of Canada is scheduled to make its next interest rate announcement after leaving the rate unchanged at 2.25 per cent following its last interest rate review on June 10.

— with files from Global News