Crude oil prices retreated as signs of increased traffic through the Strait of Hormuz offset worries about renewed hostilities stretching from Iran to the Black Sea region. Copper prices advanced, with traders focusing on indications of tightening supply. Gold edged higher as market participants evaluated the future path of interest rates following the Federal Reserve's decision to hold steady on Wednesday.
Crude Oil: WTI Slips as Traders Weigh Strait of Hormuz Recovery Against US-Iran Conflict
Oil declined amid thin summer trading volumes, with evidence of rising vessel movements through the Strait of Hormuz counterbalancing concerns over a new wave of conflict from Iran to the Black Sea. West Texas Intermediate crude fell 1%, settling below $84 per barrel, while Brent crude closed near $89 per barrel. The Brent futures contract, set to expire on Friday, saw declining open interest ahead of expiration, distorting price action. Traders remained cautious, caught between US airstrikes on Iranian targets and a recent rebound in shipping activity through the Strait of Hormuz, the critical waterway linking the Persian Gulf to global markets. According to market intelligence firm Kpler, 14 commercial transport vessels passed through the strait in both directions on Wednesday, up from single-digit levels the previous week. Energy markets have experienced renewed volatility this month, with investors forced to navigate shifting dynamics after a brief truce between Tehran and Washington gave way to renewed fighting. The US Central Command stated on X that American forces struck dozens of Iranian military targets early Thursday, aiming to degrade Tehran's ability to threaten US troops, American Arab allies, and regional commercial shipping. Markets are also monitoring two attacks on vessels preparing to load at the Caspian Pipeline Consortium terminal on Russia's Black Sea coast, a key export route for Kazakh crude. Similar attacks last week disrupted loading for several days, helping push oil prices above $100 per barrel. "Commodity trading advisors were sellers of WTI crude today, but supply conditions continue to tighten," analysts at TD Cowen wrote in a note. The attacks on the Caspian Pipeline Consortium terminal "will continue to reduce Russian crude exports by 1 million to 2 million barrels per day from June averages; as drone strikes persist, supply disruptions may also extend for a longer period," they added. WTI for September delivery fell 1%, settling at $83.59 per barrel. Brent for September delivery declined 1.9%, closing at $89.03 per barrel, with the contract set to expire on Friday.
Base Metals: Copper Rises on Supply Tightness Signals
Copper prices advanced as traders continued to monitor signs of tightening supply in the copper market and the outlook for monetary policy. With spot market tightness offsetting macroeconomic and geopolitical headwinds, most base metals are on track for modest gains in July. At the close, LME copper rose 1.6% to $13,803 per metric ton. LME aluminum gained 0.5% to $3,195.5 per ton. LME nickel added 0.8% to $17,270 per ton. LME zinc climbed 1.5% to $3,622 per ton. LME tin increased 2% to $54,978 per ton. LME lead edged down 0.2% to $1,895.5 per ton.
Precious Metals: Gold Edges Higher as Rate Path Assessed
Gold inched higher as traders continued to assess the future trajectory of interest rates after the Federal Reserve decided to keep borrowing costs unchanged. The precious metal traded near $4,110 per ounce, marking its second consecutive daily gain. The Fed voted 9-3 to maintain the current interest rate; a rate hike would have been detrimental to non-yielding assets like gold. Justin Lin, an analyst at Global X ETFs, noted that gold's choppy trading on Thursday reflected a "mixed reaction" to the Federal Reserve Chair's comments. As of 5:00 p.m. in New York, spot gold rose 0.9% to $4,103.41 per ounce.
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