Brent crude oil has retreated from the $100 per barrel mark. Despite a recent escalation in US-Iran hostilities and persistent military threats from the White House, oil continues to flow through Middle Eastern trade routes. Base metal prices were mixed on Friday, as heightened Middle East conflict and risks of further global economic turmoil dampened market optimism. Gold edged higher as traders weighed the Middle East conflict against interest rate outlooks.
Crude Oil: Brent Steps Back from $100 High, Signs of Continued Red Sea Shipping
Brent crude has pulled back from the $100 per barrel level. Although US-Iran hostilities have intensified recently and the White House has issued ongoing threats of force, oil is still being transported via Middle Eastern trade routes.
Brent crude futures fell roughly 4% on Friday, settling near $97 per barrel, marking their largest single-day decline since late June.
Traders are digesting a series of reports regarding the direction of US-Iran peace talks, with momentum indicators suggesting that the rally is stalling after a rapid price surge.
Oil prices extended their decline following reports that Pakistan is exploring pathways to restart US-Iran peace negotiations. Meanwhile, US media reported that Trump met with senior advisors and top cabinet officials on Friday to discuss whether to escalate military strikes against Iran.
The relative strength index, a measure of price momentum for crude oil, indicates that after roughly a week of gains, oil prices may enter a period of weakness.
"TD Securities Global Head of Commodity Strategy, Bart Melek, stated: "The crude oil market is taking a breather. So far, oil shipments through the Bab el-Mandeb Strait have not been severely disrupted, and Saudi Arabia continues to employ alternative measures, including the use of the Suez-Mediterranean pipeline across Egypt and arranging for supertankers with reduced loads to transit the Suez Canal."
Speaking at an event in the White House Oval Office, Trump said he has not yet decided whether to launch a large-scale strike on Iran.
September-delivery Brent crude futures settled 3.9% lower, closing at $96.78 per barrel on the New York market;
September-delivery WTI prices fell 3.1%, settling at $89.31 per barrel.
Base Metals
Base metal prices were mixed on Friday, as the escalation of the Middle East conflict and the risk of more global economic turbulence dampened market sentiment.
Although copper, aluminum, and zinc posted gains for the week, trading remained cautious in recent sessions following attacks on Red Sea vessels by Yemen's Houthi rebels.
The broadening conflict briefly pushed Brent crude oil prices back above $100 per barrel, which could exacerbate inflation and prompt further interest rate hikes.
For the copper market, trader focus remains on whether the Trump administration will impose tariffs on copper imports.
By market close, LME copper rose 0.4%, settling at $13,645 per tonne;
LME aluminum fell 0.9%, settling at $3,159.5 per tonne;
LME nickel gained 0.9%, settling at $17,379 per tonne;
LME zinc rose 0.2%, settling at $3,592 per tonne;
LME tin added 0.9%, settling at $53,781 per tonne;
LME lead declined 0.3%, settling at $1,887 per tonne.
Precious Metals
Gold edged higher, holding firmly above the key resistance level of $4,000 per ounce, even as the intensifying Middle East conflict fueled expectations for further monetary policy tightening.
Gold prices were around $4,050 per ounce, after falling as much as 0.7% during the session; the metal is still up roughly 1% for the week.
"Commerzbank analysts stated in a report: "Despite the sharp rise in oil prices, which has renewed concerns about interest rates, gold remains well-supported above the $4,000 per ounce level. In this context, next week's Federal Reserve meeting is not expected to have a significant impact on gold prices."
As of 4:59 PM Eastern Time, spot gold rose 0.1%, standing at $4,052.79 per ounce;
Spot silver increased 1%, reaching $58.1748 per ounce.
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