Oil prices are falling and stocks are up. Traders worry they’ve gone too far | CNN Business

The agreement to re-open the Strait of Hormuz has been met with swift relief in markets. But some traders worry the rally in stocks and drop in oil prices might be overdone. WTI, the US oil benchmark, settled at $76.60 a barrel Thursday, down almost 10% on the week. Gas dipped below $4 a gallon for the first time since March. US stocks are near record highs. “Traders are kind of pricing in perfection,” said David Oxley, chief commodities and climate economist at Capital Economics. “It’s the relief that the strait’s open – this is wonderful news compared with the nightmare scenario of it being shut.” “But actually, I think (the market) might have gone a little bit too far,” he added. “It’s not necessarily a sign that everything is going to be completely smooth ahead.” Oil futures have dropped and gas prices have eased on optimism that flows through the Strait of Hormuz will pick up now that the US-Iran agreement has been signed. But the market might be disregarding risks and moving on more enthusiasm than reality, analysts noted. Traffic through the key waterway remains a drop in the ocean compared to pre-war levels. The strait was just at the center of war,