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Oil Prices Rise as Iran Reportedly Refusing to Surrender Its Uranium Stocks

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Oil prices are up early Thursday, rebounding from a day-prior plunge as the United States awaits Iran's response to it latest peace proposal, though reports said the Persian Gulf country will not agree to U.S. demands to end its nuclear program.

West Texas Intermediate crude oil for July delivery was last seen up $2.34 to US$100.60 per barrel, while July Brent oil was up $1.94 to US$106.96.

The rise comes a day after the U.S. sent Iran a fresh peace offer while threatening to resume attacks on the country should its terms be rejected. While Iran has yet to formally respond Reuters reported Iranian Supreme Leader Ayatollah Mojtaba Khamenei ordered the country's stocks of enriched uranium would not be surrendered, blocking a key U.S. peace demand.

The news agency said that along with Iran's refusal to end its nuclear program, it also formed a Persian Gulf Strait Authority to firm its control of the Strait of Hormuz, the choke point for 20% of global oil demand supplied by Persian Gulf nations.

Iran blockaded the Strait at the Feb. 28 start to the war, producing the largest-ever energy supply shock, boosting oil prices by more than half and boosting inflation and raising fears central banks will need to raise interest rates and slow global growth while roiling markets.

"Oil moved sharply lower (Wednesday) after Trump stated that the US was in the "final stages" of talks with Iran, raising hopes that some form of diplomatic breakthrough could eventually ease supply disruptions. Those hopes faded after subsequent comments warning that "there's more fighting to come unless Iran gets smart. Markets increasingly appear trapped between these alternating signals. The result has been substantial price volatility without delivering the one development that ultimately matters: a reopening of the Strait of Hormuz and a normalization of regional energy flows," Ole Hansen head of commodity strategy at Saxo Bank, wrote.

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