Crude oil prices held steady as traders closely monitored developments in talks between Iran and Oman to restore navigation through the Strait of Hormuz, amid heightened tensions in the Middle East. Copper prices edged lower on Friday but still recorded a weekly gain, with signs of tightening supply in the market. Gold rallied sharply, as weak employment data eased concerns that the Federal Reserve might raise interest rates soon.
Oil prices remained stable as traders weighed negotiations over the Strait of Hormuz and ongoing Iranian tensions. Brent crude settled above $83 per barrel but still posted its third consecutive weekly decline. Futures prices were continually swayed by news regarding the potential terms and timeline of a deal on the Strait of Hormuz. If reached, such an agreement could bring millions of barrels of Middle Eastern crude oil supply back to the market. Oil prices gave up earlier gains in post-settlement trading after Reuters reported that the United States would lift its maritime blockade on Iran once a deal with Oman is finalized and commercial shipping resumes "unhindered." The U.S. Central Command said Thursday that it had diverted 49 commercial vessels since reinstating the blockade on Iran. Lifting the blockade could release a significant amount of oil supply back into the market and potentially pave the way for full restoration of navigation through the Strait of Hormuz. Despite the apparent progress toward resolving the Strait of Hormuz issue, threats to shipping have not yet subsided. Abu Dhabi National Oil Company reported that three of its vessels were attacked this week while transiting the Strait of Hormuz. Oil prices had already risen, following reports from the semi-official Fars News Agency that Iran struck "hostile targets" in the strait on Thursday after an explosion near Qeshm Island. "The agreement to reopen the Strait of Hormuz remains difficult to reach, and investors are in a wait-and-see state," said Rob Haworth, Senior Investment Strategy Director at U.S. Bank Wealth Management. "Shipping volumes are still low, and the path to a lasting agreement remains unclear." In other news, the U.S. Senate passed a broad sanctions bill against Russia, authorizing punitive tariffs on major buyers of Russian oil and gas, including India, and extending sanctions against Iran. WTI crude for September delivery rose 1.2% to settle at $78.18 per barrel; in post-settlement trading, the U.S. benchmark fell 0.7%. Brent crude for October delivery gained 1.3% to settle at $83.55 per barrel.
Copper prices fell on Friday but still posted a weekly gain. The copper market is rapidly tightening, with a surge in U.S. copper imports and increased orders setting the stage for a new rally. London Metal Exchange (LME) copper broke through the $14,000 per ton threshold this week, a level that has been surpassed on only a few trading days this year. Many traders believe copper prices could soon break the historical record of over $14,500 per ton set in late January. At the close, LME copper fell 0.2% to $14,076 per ton; LME aluminum rose 0.6% to $3,280 per ton; LME nickel gained 1.4% to $17,004 per ton; LME zinc fell 1.5% to $3,707 per ton; LME tin dropped 1% to $55,530 per ton; and LME lead edged up 0.1% to $1,887 per ton.
Gold prices surged following a report that U.S. employers unexpectedly shed jobs in July, extending a rebound from lows below $4,000 per ounce. Gold rose as much as 3.1% to $4,371.93 per ounce, hitting its highest level since mid-June, before paring gains. The weak employment data may somewhat ease market concerns about the Federal Reserve raising interest rates soon. Since gold does not generate interest, rate hikes typically have a negative impact on its price. The jobs report pushed gold's weekly gain to over 7%, marking its largest single-week increase in more than six months. As of 4:59 p.m. Eastern Time, spot gold was up 2.4% at $4,341.56 per ounce; spot silver rose 3.3% to $63.5583 per ounce.
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