Oil prices climbed amid heightened U.S. sanctions on Venezuela, while London copper and gold prices surged to historic peaks, driven by trade volatility, supply constraints, and geopolitical tensions.
**Crude Oil: Prices Rise as U.S. Tightens Venezuela Blockade** Oil prices advanced after the U.S. escalated its blockade against Venezuela. Following two consecutive weeks of declines, WTI crude futures rose 2.4% on Monday, settling above $58 per barrel. - February WTI crude futures gained 2.4% to $58.01/barrel. - February Brent crude futures increased 2.7% to $62.07/barrel.
The U.S. Coast Guard intercepted and boarded the *Century* supertanker in the Caribbean on Saturday, which was carrying 2 million barrels of Venezuelan crude—the first vessel targeted despite not being on U.S. sanctions lists. Another tanker, *Bella 1*, was pursued on Sunday en route to Venezuela.
Geopolitical risks lent support to oil prices, which have dropped roughly 20% this year due to oversupply. Despite slowing demand growth, OPEC+ and rival producers have ramped up output. Bob McNally of Rapidan Energy Group noted that military activity near Venezuela is unlikely to alter expectations of persistent oversupply or long-term price declines, though sporadic volatility may occur.
**Base Metals** Copper prices hit a fresh record near $12,000/ton, capping a year dominated by trade turbulence, tight supply, and optimism over long-term demand. LME copper has surged 36% in 2024, poised for its strongest annual gain since 2009.
Key drivers include a rush of copper shipments to the U.S. to preempt potential tariffs—potentially creating shortages elsewhere—alongside unplanned mine outages and bullish sentiment around copper’s role in AI infrastructure. - LME copper rose 0.4% to $11,925/ton. - Aluminum dipped 0.1% to $2,941.5/ton. - Nickel jumped 3.2% to $15,276/ton. - Zinc edged up 0.4% to $3,085/ton. - Tin and lead each fell 0.7% to $42,947/ton and $1,971.5/ton, respectively.
**Precious Metals** Gold soared to an all-time high as escalating geopolitical tensions and bets on further Fed rate cuts fueled its best annual performance in over four decades. Spot gold rallied 2.4% to $4,442.04/oz, eclipsing October’s previous peak of $4,381. Recent economic data has traders pricing in two additional Fed rate cuts by 2026, while U.S. President Trump urged looser monetary policy—typically bullish for non-yielding metals.
Geopolitical risks, including stricter U.S. oil sanctions on Venezuela and Ukraine’s first strike on a Russian shadow fleet tanker in the Mediterranean, bolstered safe-haven demand for gold and silver. - Spot silver climbed 2.6% to $68.9221/oz.
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