U.S. crude oil prices recorded their largest weekly gain on record as military conflicts involving Iran disrupted flows in key energy markets, bringing shipping through the Strait of Hormuz to a near standstill. Gold advanced on Friday, with traders increasing bets on monetary policy easing following a weak U.S. jobs report, helping the metal pare its weekly decline. London copper prices fell, while aluminum prices rose sharply.
Crude Oil: U.S. Oil Marks Record Weekly Gain as Iran Conflict Continues to Impact Energy Supplies U.S. crude oil prices recorded their largest weekly advance on record, as hostilities involving Iran disrupted vital energy market flows, nearly halting all shipping traffic through the Strait of Hormuz. WTI crude rose 12% on Friday, settling just below $91 per barrel, marking its largest single-day gain in nearly six years. Brent crude closed near $93 per barrel. Iran warned that if the European Union enters the conflict, it would become a "legitimate" target for retaliation. Kuwait has begun reducing output at some oilfields due to exhausted storage capacity, the latest sign of supply disruption in the region. Citigroup estimates that disruptions to shipping through the Strait of Hormuz have removed 7 million to 11 million barrels of supply per day from the oil market. Oil continued to surge despite the U.S. President stating that action to ease price pressures was "coming soon." The Director of the National Economic Council indicated that tapping the Strategic Petroleum Reserve is not expected in the near term. The U.S. International Development Finance Corporation stated it would deploy maritime reinsurance operations in the Gulf region, including war risk insurance. Goldman Sachs projected that oil prices could surpass $100 per barrel if supply disruptions persist. The Energy Minister of Qatar warned in a media interview that oil prices could surge to $150 per barrel within two to three weeks if tankers and other commercial vessels cannot transit the Strait of Hormuz. April WTI crude rose 12%, settling at $90.90 per barrel. May Brent crude increased 8.5%, closing at $92.69 per barrel.
Precious Metals: Gold Narrows Weekly Decline as Soft Jobs Data Boosts Fed Rate Cut Expectations Gold moved higher on Friday. Traders increased their wagers on easier monetary policy after the release of a weak U.S. employment report, helping the gold price reduce its losses for the week. Gold faced pressure during the week as conflict in the Middle East sent oil prices sharply higher, fueling inflation concerns, while a stronger U.S. dollar also weighed on the metal. A stronger dollar and higher borrowing costs are typically negative for gold. Gold also served as a source of liquidity amid a deepening sell-off in global equity markets. As of 4:58 PM New York time, spot gold was up 1.8% at $5,172.72 per ounce. Spot silver advanced 2.8% to $84.522 per ounce.
Base Metals: Copper Falls Below $13,000 Copper prices dropped below $13,000, while aluminum prices surged due to export disruptions from the Middle East caused by the conflict. A spot commodity index jumped 3.7%, reaching a record high. At the close, LME copper futures were down 0.3% at $12,862 per metric ton. LME aluminum futures rose 4.6% to $3,446 per ton. LME nickel futures increased 1.5% to $17,469 per ton. LME zinc futures gained 2.2% to $3,298 per ton. LME tin futures edged up 0.3% to $50,065 per ton. LME lead futures advanced 0.6% to $1,953 per ton.
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