Crude oil prices fell on Monday, weighed down by declines in the refined products market, as investors also monitored the outlook for Russian oil supply. Gold and silver prices dropped amid rising U.S. Treasury yields, while copper prices surged to a fresh record high.
**Crude Oil: Refined Products Drag Down Prices as Market Watches Russian Supply** Oil prices posted their steepest decline in nearly three weeks, with traders assessing India’s purchases of Russian crude. A sharp drop in refined product prices also pressured the broader energy sector.
WTI crude futures fell 2%, settling near $59 per barrel, further pressured by declines in U.S. equities.
Despite facing severe sanctions over its war in Ukraine, Russian President Vladimir Putin pledged last week to maintain uninterrupted oil supplies to India. As U.S. negotiators arrived in India for trade talks, Russia’s oil supply to the country is likely to be a key discussion point.
Vivek Dhar, an analyst at Commonwealth Bank of Australia, noted, "Supply surplus concerns may eventually materialize, especially as Russian crude and refined products bypass existing sanctions." He projected that Brent crude futures could drop toward $60 per barrel by 2026.
In refined products, gasoline futures fell 2% on Monday after hitting their lowest level since May 2021 last week. Diesel prices also weakened, dragging down the broader energy commodities sector.
Potential peace talks between Ukraine and Russia remained in focus. Former U.S. President Donald Trump expressed disappointment with Ukrainian President Volodymyr Zelensky’s handling of a proposed peace deal.
Both WTI and Brent crude have remained below their 100-day moving averages for the longest stretch in nearly a year, reflecting persistent bearish sentiment ahead of an anticipated supply glut.
January WTI crude futures fell 2% to settle at $58.88 per barrel, while February Brent crude dropped 2% to $62.49 per barrel.
**Precious Metals: Gold and Silver Decline** Gold and silver prices retreated as Treasury yields climbed. With a Federal Reserve rate cut this week seen as nearly certain, traders shifted focus to clues about next year’s monetary policy trajectory.
U.S. Treasury yields rose as investors braced for a series of bond auctions starting Monday and the Fed’s rate decision on Wednesday, which could reshape expectations for the 2026 policy path.
Kevin Hassett, seen as a potential successor to Fed Chair Jerome Powell, stated that it would be irresponsible for the Fed to outline rate adjustments for the next six months, emphasizing the need to follow economic data closely.
The swaps market still fully prices in a 25-basis-point Fed rate cut on Wednesday. Traders now expect two additional moves by the end of 2026, down from three projected a week ago.
As of 3:56 p.m. in New York, silver fell 0.4% to $58.12 per ounce, while gold dipped 0.1%. Palladium and platinum advanced.
**Base Metals: Copper Hits Record High** Copper prices climbed to a historic peak as tight global supply and U.S. stockpiling fueled expectations of sustained price gains.
Prices briefly rose to $11,771 per ton on Monday, surpassing the previous record set in the prior session before paring gains.
Partially driven by rising U.S. inventories, the global refined copper market could face a deficit of 450,000 tons by 2026.
At the London close: - LME copper rose 0.1% to $11,635.5 per ton. - LME aluminum fell 0.3% to $2,888 per ton. - LME nickel declined 0.7% to $14,840 per ton. - LME zinc gained 0.7% to $3,121 per ton. - LME tin dropped 0.5% to $39,884 per ton. - LME lead edged down 0.2% to $1,998.5 per ton.
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