Oil prices fluctuated throughout the trading session as negotiations between Iran and the United States regarding the Strait of Hormuz showed little sign of a breakthrough, while traders assessed data from multiple major energy forecasting agencies. Copper prices extended their losses, with uncertainty in the Middle East heightening concerns about the economic and demand outlook. Gold prices rose, as mild U.S. inflation data eased worries about interest rate hikes.
Oil: WTI Seesawed as Market Focused on Hormuz Talks Amid Big U.S. Crude Build
Crude oil prices fluctuated repeatedly during the session, as negotiations between Iran and the United States over the Strait of Hormuz showed almost no signs of progress, while traders analyzed a series of data releases from several major energy forecasting agencies.
WTI crude settled nearly flat, hovering around $83 per barrel, after rising 10% over the previous four sessions. Futures prices continued to be driven by news surrounding the reopening of this key waterway, with the market swinging between optimism about an imminent agreement and signs of stalled negotiations.
U.S. President Donald Trump claimed that the U.S. has "full control" over the Strait of Hormuz, while both Washington and Tehran adopted tougher stances. Pakistan, however, indicated that the deadline for the U.S.-Iran Memorandum of Understanding could be extended.
The U.S. Energy Information Administration reported that U.S. crude inventories rose by 17.4 million barrels last week, nearly double the increase estimated by a widely-watched industry group, pushing oil prices to their intraday lows. This inventory build was the largest in over three years, and U.S. crude imports also rose to their highest level since November 2024.
Meanwhile, U.S. diesel exports hit a record high, approaching 2 million barrels per day, which boosted diesel futures. Data from the American Automobile Association showed that tight supply in the refined products market has pushed gasoline and diesel prices to their highest levels on record for this time of year.
"Crude exports have remained weak, and combined with a sharp jump in imports, this has driven the second-largest historical increase in crude inventories, with the vast majority of the build occurring on the Gulf Coast," said Matt Smith, an analyst at market intelligence firm Kpler.
The massive crude inventory build did not fully dispel market concerns about whether U.S. oil supplies could compensate for a severe supply loss resulting from a war with Iran. Data from the International Energy Agency released on Wednesday showed that the market is estimated to face a supply gap of 1.8 million barrels per day.
In New York, WTI crude for September delivery rose 7 cents to settle at $83.27 per barrel.
Brent crude for October delivery edged up 7 cents to settle at $88.98 per barrel.
Base Metals
Copper prices extended their decline, as uncertainty over an agreement to reopen the Strait of Hormuz exacerbated concerns about the economic and demand outlook.
The recent rise in copper prices weakened purchasing intent, with the Yangshan copper premium falling to $96 per metric ton on Wednesday.
Jinrui Futures said in a report that "the recent high copper prices have led to a weakening of downstream short-term consumption."
At the close, LME copper fell 0.2% to $14,132 per metric ton.
LME aluminum fell 1.6% to $3,310.50 per metric ton.
LME nickel rose 0.7% to $16,948 per metric ton.
LME zinc rose 0.8% to $3,757 per metric ton.
LME tin fell 0.2% to $55,818 per metric ton.
LME lead rose 0.1% to $1,909.50 per metric ton.
Precious Metals
Gold prices climbed above $4,400 per ounce, as U.S. inflation data came in line with expectations, alleviating concerns about the Federal Reserve raising interest rates.
Following the inflation data release, gold prices rose by as much as 1.6%, approaching the two-month high touched earlier this week.
Ryan McKay, a senior commodity strategist at TD Securities, said that the CPI data "basically did not rekindle market pricing for a Fed rate hike, and the recent price action highlights that the gold market increasingly does not believe the Fed will raise rates."
As of 5:00 p.m. Eastern Time, spot gold rose 0.9% to $4,408.29 per ounce.
Spot silver rose 1% to $65.3242 per ounce.
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