WTI closed down ⁠3.9% after ​the ceasefire held despite reported exchanges of ​fire, while ⁠Brent fell 4% to close at $109.87. U.S. crude oil inventories fell for the third straight week, while ⁠gasoline and distillate stocks also declined, market sources ⁠said, citing American Petroleum Institute figures on Tuesday.

Easing tensions over the Strait of Hormuz trigger sharp sell-off in crude as markets bet on supply normalization

By Lawrence Delevingne and Harry Robertson May 6 (Reuters) - Stocks surged to fresh records and oil prices dropped on Wednesday after a report that the United States and Iran are closing in on an agreement to end their war,

Treasury yields fell sharply on Wednesday amid hopes of a meaningful de-escalation in the two-month-long war in the Middle East.

Oil prices eased back on Wednesday after Donald Trump said he was pausing ‘Project Freedom’, the US operation to guide ships through the vital Strait of Hormuz, as progress was being made towards a peace deal with Iran.

Although stocks have rallied sharply, volatility in energy and bond markets could weigh on global growth. Oil prices are around 35% higher than they were when the conflict ⁠began in ⁠late February, while 10-year Treasury yields are around 40 bps higher.