Oil climbs as Hormuz Deal Prospects Fade

Summary

Oil prices moved higher on Friday as hopes for a US-Iran agreement to reopen the Strait of Hormuz weakened, with Brent extending Thursday’s strong rise to around $83.50 a barrel. The FTSE 100 was set for a softer start, while US equity futures were little changed ahead of the latest employment figures. The US dollar strengthened modestly, while gold extended its weekly advance and remained above $4,260 an ounce. Asian equities were subdued, with Japan and South Korea falling.

Equities

The FTSE 100 fell 0.2% on Thursday, closing at 10,867.89 as the London market gave back some ground alongside weaker US shares. The FTSE 250 moved in the opposite direction, rising 0.2% to 24,695.41 for its fourth consecutive daily gain.

WPP jumped 28.6% on Thursday, putting the advertising group on course for its biggest one-day percentage gain in more than three decades. The company said its trading trajectory had improved in recent months, despite reporting a 4.7% fall in first-half adjusted revenue.

Admiral climbed 5.4% on Thursday following its first-half results and the announcement of a share buyback. Persimmon gained 2.9% after the housebuilder forecast that full-year home deliveries would reach the top end of its previous guidance range.

Relx fell 4.1% on Thursday as software shares came under pressure, while the company also traded without entitlement to its latest dividend. Tritax Big Box REIT dropped 4.1% after completing a £350 million share placing at £1.64 per share.

In the US, the Dow Jones closed 0.85% lower on Thursday at 53,885.10, while the S&P 500 fell 0.18% to 7,710.03. The Nasdaq Composite slipped 0.06% to 26,348.35 as investors assessed another round of corporate earnings ahead of Friday’s US jobs report.

AppLovin plunged 19.7% on Thursday after the marketing platform missed Wall Street estimates for quarterly revenue. Datadog dropped 19% after the cloud security company warned that revenue growth was expected to slow during the third quarter.

Western Digital fell 13% on Thursday following its quarterly results, while memory-chip maker Sandisk lost 6.8%. Both shares remain sharply higher in 2026, with Sandisk up more than 400% and Western Digital around 160% higher for the year.

SpaceX closed 6.1% higher on Thursday, reversing earlier losses as the lockup period restricting sales by early investors expired. The gain came despite expectations that the expiry could lead to increased insider selling.

Forex & Commodities

The US dollar was slightly firmer early on Friday, with the dollar index rising to 99.95 and remaining on course for a small weekly gain. The dollar traded little changed at 158.4 yen after strengthening on Thursday, continuing its recovery from Monday’s 13-week low following coordinated intervention by Japan and the US. Against other major currencies, the euro slipped to $1.152, while sterling was steady at $1.345.

The dollar received some support from higher US Treasury yields after a report indicated Federal Reserve Chair Kevin Warsh could be open to an interest rate increase in September, depending on incoming economic data. The Fed left interest rates unchanged at its July meeting, while expectations for the timing of its next move have continued to shift as investors assess inflation and employment figures.

Spot gold rose early this morning to $4,262 an ounce after reaching a seven-week high on Thursday. The precious metal has gained more than 5% this week and is on course for its strongest weekly performance since January. Expectations for a September US interest rate increase have eased to around 55%, compared with 63% a week earlier.

Oil prices moved higher early on Friday as uncertainty increased over plans to reopen the Strait of Hormuz. Brent crude climbed to $83.29 a barrel, while US West Texas Intermediate rose to $77.93, extending Thursday’s rebound when oil prices settled more than $3 a barrel higher. Despite the latest gains, both benchmarks remained on course for weekly losses of around 8%.

The latest proposals concerning the Strait of Hormuz have complicated expectations for a return to normal shipping. Iran has proposed restrictions on vessels it considers hostile and is seeking fees equivalent to 5%–7% of cargo values, while Oman has discussed charges of around 3% and the US is seeking passage without fees.