Oil traded in a narrow range near five-month highs as renewed Middle East hostilities raised supply risks and pushed prices higher, though technical resistance capped the advance. Copper declined as investors grew wary of the bullish narrative, while gold fell even as energy prices eased and US Treasury yields stayed elevated.
Crude: Brent fluctuates around five-month peak as traders weigh Middle East risk and doubts over diesel deal. Brent settled above $109 a barrel after surging nearly 4% last Friday when traders positioned for weekend risks tied to the Iran conflict. On Monday, prices rose early before pulling back after Iran said it had "no choice" but to assert sovereignty over the Strait of Hormuz for its own security, while US lawmakers continued to oppose President Donald Trump's diesel export agreement with Russia. Several technical factors limited gains. Friday's rally pushed the nine-day relative strength index into overbought territory, often a signal of a possible pullback. Trend-following commodity trading advisers had already maxed out long positions in both Brent and WTI at a 100% ceiling, meaning their buying capacity is exhausted.
Even as Middle East tensions persist, physical markets showed signs of loosening. Oil flows through the Strait of Hormuz remained steady despite mounting threats. The dated Brent benchmark, which underpins European pricing, traded near $117 a barrel on Monday, down almost $16 from a week earlier. US Energy Secretary Chris Wright told Fox News that Persian Gulf oil flows had recovered to roughly 80% of pre-conflict levels, though refined product shipments remain constrained. "Dated Brent fell sharply Friday while paper markets rallied, underscoring how convoluted the factors are for traders," said Rebecca Babin, senior energy trader at CIBC Private Wealth Group. "More ships are heading to China, oil transit through Hormuz continues despite attacks, and Russia-Ukraine headlines add another layer of uncertainty."
November WTI crude futures rose 2.2% in New York to settle at $103.66 a barrel, with the contract expiring Tuesday. The more actively traded December contract slipped 0.5% to settle at $98.54. December Brent futures fell 0.3% to settle at $109.55 a barrel.
Base metals: Copper prices declined as investors turned cautious on the bull case. With Trump's second term nearly halfway through, many bulls worry copper could tumble if tariffs ultimately fail to materialize. Analysts at Natixis warned that tariff-related bets have created a bubble in one of the world's most important industrial commodity markets, and that bubble could burst quickly if the tariff scenario is ruled out. Macquarie said copper could slump toward $10,000 a ton in that case, but prices could also climb to $18,000 if the tariff announcement is merely delayed, allowing traders to ship even more metal to the United States.
At the close, LME copper fell 0.5% to $14,339 a ton; LME aluminum rose 0.5% to $3,016.50; LME nickel gained 1.1% to $15,529; LME zinc added 0.6% to $3,714; LME tin advanced 0.9% to $50,839; and LME lead climbed 0.4% to $1,896.
Precious metals: Gold declined as US Treasury yields held at elevated levels despite softer energy prices, with traders continuing to assess the Federal Reserve's rate path. Gold fell as much as 0.7% during US hours to $4,136.71 an ounce. French government bonds sold off after weekend violence in France, also pushing yields higher. Rising rates typically weigh on non-yielding gold. Nicky Shiels, head of metals strategy at MKS PAMP, cited thin Monday market liquidity as another factor behind the weaker price. As of 5 p.m. New York time, spot gold was down 0.6% at $4,140.72 an ounce, while spot silver was up 0.2% at $57.0787 an ounce.
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