Oil prices advanced as a US-Iran ceasefire failed to ease market concerns over the supply outlook. Copper prices declined as the initial risk-on sentiment spurred by the ceasefire news faded. However, gold prices rose for a third consecutive day as investors weighed the Middle East situation and maintained a positive long-term view on the metal.
Crude Oil: Prices Gain Amid Volatility Oil prices climbed during volatile trading, as a fragile US-Iran ceasefire agreement did little to alleviate worries about further supply disruptions in the Middle East, with shipping through the Strait of Hormuz remaining largely constrained.
After fluctuating within a range of over $7, May WTI crude settled near $98 per barrel. June Brent crude posted a modest gain, closing just below $96 per barrel. Both benchmark crudes rose by approximately $2 in post-settlement trading.
Prices moved higher before the close following a report from the Saudi Press Agency stating that attacks had reduced the country's oil production capacity by about 600,000 barrels per day and cut the capacity of the East-West pipeline by 700,000 barrels per day. Kuwait announced it was intercepting drone attacks, with some critical facilities being targeted.
These recent developments served as a reminder that tensions in the Persian Gulf region remain elevated. US Vice President Vance is expected to lead a delegation for talks with Iran in Pakistan on Saturday. Shipping through the Strait of Hormuz continues to be restricted, and even if passage resumes, energy supplies are unlikely to normalize quickly.
"The reality is that nothing is settled yet; missiles, mines, and drones are still active in the region," said Carl Larry, an energy analyst at Enverus. May WTI crude rose 3.7% to settle at $97.87 per barrel. June Brent crude gained 1.2% to settle at $95.92 per barrel.
Base Metals: Copper Declines as Ceasefire-Driven Risk Appetite Fades Copper prices fell on Thursday as sporadic fighting in the Middle East threatened the fragile ceasefire between the US and Iran. After reaching a three-week high in the previous session, copper prices on the London Metal Exchange moved lower as risk appetite waned.
On the supply side, rising inventories continued to cast a shadow over the market. Copper stockpiles in LME-monitored warehouses have climbed to an eight-year high, indicating persistent weak demand despite recent improvements in market sentiment. Industry analysts, including Grant Sporre, noted in a report that while copper is currently trading below fair value, it still appears vulnerable. They added that demand proxies, including global manufacturing indicators, still show resilience but could soften amid high oil prices, disruptions in the Strait of Hormuz, rising input costs, and weaker confidence impacting industrial demand.
At the close, LME copper was down 0.2% at $12,681.50 per tonne. Other base metals were mixed, with aluminum falling 0.3% and zinc rising about 1%.
Precious Metals: Gold Rises for a Third Day Gold prices advanced for a third straight session on Thursday as traders assessed the prospects for a diplomatic resolution to the Iran conflict. Gold traded around $4,770 per ounce, after gaining 1.5% over the previous two trading sessions.
As the US and Iran prepare for peace talks in Pakistan, the fragile ceasefire has largely held, although issues such as Israel's offensive in Lebanon and the reopening of the Strait of Hormuz remain unresolved.
"With geopolitical risks still present and the ceasefire looking very fragile, gold is tracking the news closely, keeping short-term volatility high," said Ewa Manthey, a commodities strategist at ING Bank. "Beyond that, the long-term outlook remains positive, supported by continued central bank buying, reserve diversification, and the unlikelihood that real rates will stay restrictive indefinitely."
James Luke, a senior portfolio manager at Schroder Investment Management, stated that even if the crisis evolves into a prolonged stalemate, gold prices would grind higher. He added that gold would continue to be supported by so-called 'monetary debasement trade,' driven by fiscal concerns and demand for hedging against dollar risks.
Spot gold was up 1.3% at $4,780.57 per ounce at 3:07 PM New York time. Silver gained 2.6% to $76.02 per ounce. Platinum rose, while palladium fell. The Bloomberg Dollar Spot Index declined 0.2%, after falling 0.8% the previous session.
Comments