Oil prices advanced on Friday as concerns that the United States could resume strikes on Iran injected fresh risk into Middle East supply. Copper slid to a one-week low as a selloff in technology shares and rising oil prices stoked worries about global economic growth. Gold dropped to a one-year low and was on track for its worst October performance since 2008.
Crude Oil: Prices Rise as Middle East Uncertainty Weighs on Investors
Oil prices advanced on Friday as concerns that the United States could resume strikes on Iran injected fresh risk into Middle East supply. December Brent crude futures, which expired Friday, settled near $118 a barrel, while the more actively traded January contract closed around $113. That marked a fourth consecutive monthly gain for the global benchmark. U.S. benchmark WTI crude settled above $104 a barrel.
Traders have begun positioning for a possible escalation after U.S. President Donald Trump repeatedly threatened to restart airstrikes on Iran following next week's midterm elections. Media reports said a senior commander briefed Trump on military options on Thursday. So far, diplomatic efforts have failed to calm the conflict in the Persian Gulf and the Strait of Hormuz. Although reports indicated regional efforts to restart talks continued on Friday, senior Iranian officials have signaled that Tehran will not compromise on its position to end the war.
Low inventories and tight refined product supply also supported prices. European diesel futures edged higher after reports that Ukrainian forces struck a refinery in Russia's Samara region following a pause of about two weeks. Meanwhile, Russian forces also launched attacks on Ukrainian targets.
As they assess the direction of the war, traders are watching next week's U.S. midterm elections. National polls ahead of the vote show the administration's handling of the Iran war is unpopular, with many voters dissatisfied over rising living costs. ANZ Group strategists Daniel Hynes and Soni Kumari said in a report that the election "will be the next important geopolitical catalyst for the oil market." They added that "the possibility of hostilities resuming after the vote adds to the uncertainty in an already fragile physical market."
At the close, December WTI crude rose 2.1% to settle at $104.12 a barrel. December Brent crude rose 2.4% to settle at $117.64 a barrel. The January contract rose 2.4% to close at $113.43 a barrel. In post-settlement trading, WTI pared gains after Trump said peace talks were ongoing and that "frankly, we still have time"; the January Brent contract also pulled back.
Base Metals: Copper Falls to One-Week Low
London copper fell to a one-week low as a selloff in technology shares and rising oil prices stoked worries about global economic growth. Disappointing earnings from technology companies hurt risk appetite, pushing copper prices lower on Friday. The prospect of possible renewed U.S. military action against Iran drove Brent to its highest level since April.
Guangzhou Futures Co. said in a report: "The sharp decline in technology stocks has intensified doubts about returns on AI investment, causing risk appetite to retreat and putting downward pressure on copper prices."
At the close, LME copper fell 1.4% to $14,154.5 a ton. LME aluminum fell 0.3% to $3,069 a ton. LME nickel fell 1.7% to $15,271 a ton. LME zinc fell 1% to $3,842.5 a ton. LME tin fell 1.7% to $48,873 a ton. LME lead fell 0.3% to $1,909.5 a ton.
Precious Metals: Gold Slides to One-Year Low
Gold fell to a one-year low and was headed for its worst October since the global financial crisis. Rising oil prices heightened inflation concerns, while a global selloff in technology shares prompted investors to sell gold to cover losses in other assets.
"Higher oil prices are triggering risk aversion and driving up U.S. Treasuries. That is reducing liquidity in the stock market, and gold is being caught up in that momentum," said Bart Melek, global head of commodity strategy at TD Securities.
Silver at one point plunged more than 6%, falling below $49 an ounce and extending its monthly decline to nearly 19%. As of 5 p.m. New York time, spot gold fell 3.7% to $3,874.62 an ounce. Spot silver fell 5.9% to $49.1001 an ounce.
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