WTI crude oil edged higher amid a mix of conflicting news as former President Trump's deadline for Iran approached. Investors anxiously awaited further developments in the Iranian situation. Reports that Pakistan had requested Trump to delay the deadline by two weeks fueled hopes for a de-escalation, boosting gold prices. Copper prices fell in London trading, with Goldman Sachs warning of potential further declines.
Crude Oil: WTI Rises Modestly in Volatile Trading as Market Awaits Trump's Deadline Traders attempted to interpret conflicting signals regarding the direction of the Middle East conflict as the deadline set by former U.S. President Trump drew near. WTI closed slightly higher, with the May contract settling near $113 per barrel. However, the global benchmark Brent crude June contract closed marginally lower, around $109 per barrel. Spot Brent crude surged to a record high above $144 per barrel, highlighting tight physical supplies. Price swings in the futures market were amplified due to low liquidity, alongside contradictory news narratives. Many traders reduced their positions to avoid extreme volatility and await the next steps from the Trump administration. Trump escalated threats earlier on Tuesday, warning that if Iran did not reach an agreement before the deadline, "the entire civilization will perish tonight." Iran has halted ceasefire talks with the U.S., while an Axios report indicated that U.S.-Iran negotiations had made progress in the past 24 hours. Mona Yacoubian, Director of the Middle East Program at the Center for Strategic and International Studies, stated, "There is currently a flood of disinformation and noise, making it difficult to discern the true signal." Iran warned that if the U.S. escalates strikes further, Tehran would increase attacks on energy infrastructure in the Persian Gulf, a move that could exacerbate global fuel shortages. May WTI rose 0.5%, settling at $112.95 per barrel. June Brent fell 0.5%, settling at $109.27 per barrel.
Base Metals: Copper Prices Decline Copper prices fell on Tuesday after Goldman Sachs warned that prices could drop further if the Strait of Hormuz remains blocked. Analysts, including Aurelia Waltham, wrote in a report that if disruptions to shipping through the strait last longer than their baseline scenario, short-term risks are skewed to the downside. This would keep energy prices elevated for a longer period and potentially weigh on global economic growth. Goldman Sachs's base case forecast is for the Strait of Hormuz to begin reopening by mid-April, but analysts noted that current copper prices are significantly above their estimated fair value of approximately $11,100 per tonne. Goldman Sachs has lowered its base case price forecast for copper this year to an average of $12,650 per tonne, down from $12,850 per tonne. At the close of London trading: LME copper fell 0.4% to $12,313 per tonne. LME aluminum rose 0.2% to $3,476 per tonne. LME nickel fell 0.8% to $16,948 per tonne. LME zinc rose 1.3% to $3,307 per tonne. LME tin fell 0.7% to $45,958 per tonne. LME lead rose 0.7% to $1,946 per tonne.
Precious Metals: Gold Prices Advance Gold prices rose on Tuesday as traders weighed developments in the Middle East ahead of the deadline set by Trump for Iran to agree to a ceasefire. Pakistan stated that diplomatic efforts for a peaceful solution are steadily advancing and has requested Trump to extend the deadline by two weeks, while also asking Iran to reciprocate by opening the Strait of Hormuz for two weeks as a goodwill gesture. This led to a decline in the U.S. dollar and Treasury yields, pushing gold up more than 1%. As of 4:03 PM New York time, spot gold was up 1% at $4,709.43 per ounce; silver fell 0.4% to $73.09; platinum and palladium moved lower.
Comments