Oil prices declined as vessel traffic through the Strait of Hormuz continued. Aluminium prices rose on Friday but still recorded a fourth consecutive weekly drop, pressured by a stronger US dollar and the prospect of restored supply from the Middle East. Gold prices moved higher as the latest US inflation data tempered market expectations for Federal Reserve interest rate hikes.
Crude Oil: WTI Drops Below $70 as Vessel Traffic Continues
US crude oil futures fell sharply, nearly erasing all the gains made during the recent war period. The decline was driven by increasing vessel traffic through the Strait of Hormuz and a significant rebound in Persian Gulf exports, which fueled investor concerns about a potential supply glut.
Brent crude fell 4.3%, settling below $72 per barrel, while West Texas Intermediate (WTI) dropped 3.7% on Friday, closing near $69. WTI hovered near its lowest level since late February, which was around the time the US and Israel initiated military action against Iran.
The global oil market is signaling a near-term supply surplus as substantial Middle Eastern oil supplies, which were previously blocked from reaching global markets during the conflict, are now returning. The Brent futures market structure, which reflects a surplus, widened on Friday to its largest extent since 2023.
Vessels have begun transiting the Strait of Hormuz normally following preliminary progress in talks for a lasting agreement to end the US-Iran war, leading to a significant influx of new crude supply into the global market.
Crucially, Saudi Arabia has resumed loading crude oil at the Ras Tanura terminal inside the Persian Gulf, indicating continued expansion of regional production. According to calculations, crude exports from the Persian Gulf are currently at approximately 75% of pre-war levels.
Under the weight of these bearish supply factors, oil prices erased Thursday's gains, which had seen a rise of over 2% following an attack on the container ship Ever Lovely near the coast of Oman.
Prices maintained their downward trajectory even after US President Donald Trump accused Iran of violating the ceasefire by launching drones at vessels in the Strait of Hormuz.
Simultaneously, the International Maritime Organization stated it is considering reactivating a vessel evacuation plan for the Persian Gulf.
"Crude prices remain decidedly under pressure as the bearish narrative continues to focus on improving shipping flows through the Strait of Hormuz," said Rebecca Babin, senior energy trader at CIBC Private Wealth Group. "While transit numbers appeared to dip following yesterday's vessel attack, shipping traffic has not been completely halted."
Thursday's attack threatened the fragile confidence of ship owners and crews, but vessels continued to pass through the narrow channel on Friday.
Other restrictions around the Strait of Hormuz may still be in play. Informed sources indicated that Oman has informed European officials that vessels transiting the Strait of Hormuz may be required to pay certain fees.
In New York, WTI for August delivery fell 3.7% to settle at $69.23 per barrel.
Brent crude for August settlement declined 4.3% to close at $71.99 per barrel.
Futures have lost over 10% this week, erasing the gains made during the war period.
Base Metals
Aluminium prices fell for a fourth consecutive week, marking the longest weekly losing streak since April 2025. A renewed sell-off in technology stocks added to the pressure from the recent strength of the US dollar and the anticipated restoration of supply from the Middle East.
Aluminium fell 6.4% for the week. Following a provisional peace agreement between the US and Iran, the market anticipates a return of aluminium supply from the Middle East, a region that accounts for nearly 10% of global production.
The weekly loss could have been larger, but prices rose on Friday after US President Donald Trump accused Iran of violating the ceasefire, reigniting concerns about the peace outlook.
At the close, three-month copper on the London Metal Exchange (LME) rose 0.7% to $13,357.5 per metric ton.
LME aluminium gained 0.5% to $3,179.5 per ton.
LME nickel fell 0.7% to $16,699 per ton.
LME zinc advanced 1.1% to $3,472 per ton.
LME tin increased 0.3% to $50,553 per ton.
LME lead declined 0.5% to $1,903.5 per ton.
Precious Metals
Gold extended its gains on Friday, rising above $4,000 per ounce as the latest US inflation data dampened expectations for Federal Reserve rate hikes. Gold experienced a week of volatile trading, having earlier fallen to its lowest level since November.
Spot gold rose as much as 1.7% on Friday, continuing its advance from the previous trading session. Despite this, gold was still headed for a fourth consecutive weekly decline, on track for its longest weekly losing streak since August 2023.
The intense volatility in equity markets this week prompted some investors to sell gold to cover losses in other parts of their investment portfolios.
As of 4:59 PM Eastern Time, spot gold was up 1.5% at $4,088.74 per ounce.
Spot silver rose 2.2% to $59.1364 per ounce.
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