Brent crude swung between gains and losses on Thursday as fresh signals about a release of emergency oil reserves helped offset mounting supply risks stretching from the Strait of Hormuz to the Black Sea.
Copper declined for a third straight session, its longest losing streak since June, after traders ramped up bets on Federal Reserve rate hikes following a stronger-than-expected U.S. inflation reading.
Gold advanced as a selloff in artificial intelligence stocks drove investors toward safe-haven assets.
Crude Oil: IEA Release News Pushes Brent Slightly Lower, Diverging From WTI
Brent crude swung between gains and losses on Thursday as news of an emergency oil reserve release helped offset rising supply risks from the Strait of Hormuz to the Black Sea.
The global benchmark edged down 0.1% to settle near $106 a barrel after International Energy Agency member states pledged to complete the release of 100 million barrels left over from their March intervention.
WTI crude futures, which have diverged from Brent in recent sessions, rose 3%.
U.S. officials are also privately lobbying for additional commitments to release more oil, according to reports.
Even with the extra supply from the emergency release and increased oil flows through the Strait of Hormuz offering some relief, the physical market continues to flash tightness signals.
Meanwhile, European diesel futures have more than doubled this year as fuel supply from Russia and the Persian Gulf remains disrupted.
U.S. Central Command confirmed Thursday that a container ship that sank in the Strait of Hormuz this week had been struck by an Iranian projectile.
Analysts at Eurasia wrote in a note that oil prices could react immediately if conflict between the U.S. and Iran erupts again, saying "escalation could push prices into a higher range of $110 to $125 a barrel and may persist for weeks or longer until the escalation ends."
WTI and Brent have diverged recently as the cost of shipping U.S. crude became cheaper, boosting demand. According to the London-based Baltic Exchange, the cost of moving a typical cargo of U.S. crude from the Gulf Coast to Rotterdam fell about 12% over the past week.
Freight rates on other major routes have also retreated from record highs in recent days, giving buyers a window to move crude at lower cost.
According to reports, the Trump administration is studying easing sanctions on "shadow fleet" vessels as a global tanker shortage drives up shipping costs.
Technical factors may also be at play. Ryan McKay, senior commodity strategist at TD Securities, said an unusually large number of positions still need to be rolled before the November WTI contract expires next week, which could amplify trading flows.
Kpler data showed trend-following commodity trading advisors raised their WTI crude positioning to the maximum long level of 100% on Thursday, the first time since September 25. That means their buying capacity in U.S. crude may now be exhausted, limiting further upside.
Weekly data released Thursday by the U.S. Energy Information Administration showed U.S. crude inventories fell 8.6 million barrels last week, the largest decline since February. The figure largely reflects production halts after hurricanes swept through the U.S. Gulf Coast, softening its impact on prices.
December Brent crude futures fell 0.1% to settle at $105.92 a barrel. November WTI crude rose 3% to settle at $97.97 a barrel.
Base Metals
Copper fell for a third consecutive session, its longest losing streak since June. U.S. producer prices posted their biggest increase since 2022, prompting the market to boost expectations for Federal Reserve rate hikes. That could be bearish for metals, since higher rates curb demand and raise manufacturing costs.
Copper is still up more than 15% this year, with large volumes flowing into the United States and tightening supply elsewhere.
At the close, LME copper fell 1% to $14,347 a ton. LME aluminum was little changed at $2,987 a ton. LME nickel dropped 1.9% to $15,221 a ton. LME zinc fell 1.5% to $3,664.50 a ton. LME tin declined 0.6% to $50,125 a ton. LME lead fell 0.8% to $1,881 a ton.
Precious Metals
Gold rose as a U.S. stock selloff pushed investors into bonds, dragging Treasury yields lower. Gold climbed as much as 1.8% to around $4,180 an ounce, recovering losses from the previous session, while silver also gained.
Precious metals briefly pared gains after U.S. September producer price and retail sales data came in above expectations; traders are closely watching a later speech by Federal Reserve Chairman Warsh.
As of 5 p.m. New York time, spot gold was up 1.6% at $4,171.44 an ounce.
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