Wall Street pointed toward modest gains in premarket trading Wednesday as energy prices stabilized somewhat on optimism that a major release of oil reserves was imminent.
Futures for the S&P 500, Dow Jones Industrial Average and Nasdaq were all up around 0.1% before the opening bell.
Oil prices have remained sharply below their peaks near $120 a barrel hit on Monday over fears that the war with Iran would be protracted. Such spikes have been rocking financial markets worldwide because of worries that the war could block the global flow of oil and natural gas for an extended period.
Early Wednesday, U.S. benchmark crude oil was up 2.8% at $85.76 per barrel. Brent crude, the international standard, rose 2.6% to $89.99 a barrel. Both had been up more than 5% earlier.
The U.S. said it took out more than a dozen minelaying Iranian vessels Tuesday, and the Islamic Republic vowed to block the region’s oil exports, saying it would not allow “even a single liter” to be shipped to its enemies.
“With Iran continuing to threaten vessels passing through the Strait of Hormuz, the focus will be on how the U.S. and other major economies will ensure the flowing of crude oil via this narrow passage and alternative routes to help stabilize prices,” Fawad Razaqzada of Forex.com wrote in a market report.
A major release of emergency oil reserves will only buy time, he said. “The real issue is the disruption to supply flows, and the longer that continues unresolved, the higher oil prices are likely to go if the Iran war continues.”
Germany’s economy minister said Wednesday the country would release parts of its oil reserves following a request by the International Energy Agency. The IEA requested that member states release oil reserves totaling about 400 million barrels.
Economy Minister Katharina Reiche said after Germany triggers the release it would take a couple of days until the “delivery of the first quantities.”
U.S. President Donald Trump