Crude oil declined as Saudi Arabia moved to restore flows on a critical pipeline, while traders weighed developments in the US-Iran conflict and the reopening of the Strait of Hormuz. London copper approached record highs amid shrinking inventories and pre-holiday buying, signaling tighter physical market conditions. Gold advanced as market participants assessed how energy costs might shape the Federal Reserve's interest rate trajectory.
Crude: Brent Falls as Saudi Advances Key Pipeline Restart, Hormuz Reopening in Focus
Oil prices dropped as Saudi Arabia sought to resume transportation on a vital pipeline, with traders simultaneously monitoring the course of the US-Iran war and progress toward reopening the Strait of Hormuz. Brent crude slipped 1.1%, settling near $99 per barrel. The kingdom is in the early stages of restarting its East-West pipeline, which was taken offline earlier this month following a drone strike. Saudi officials are pushing to restore exports through the line later this week, offering some relief to a market that has experienced unusually tight supply over recent weeks.
Although millions of barrels still transit the Strait of Hormuz daily, volumes remain below pre-conflict levels. On the diplomatic front, world leaders gathered in New York for the United Nations General Assembly, where the trajectory of the Iran war is expected to be a prominent topic. US President Donald Trump stated that a government official held talks with an Iranian delegation lasting three hours, describing the discussions as "going very well." This partially offset earlier hawkish rhetoric, after Trump threatened to destroy Iran during his UNGA speech, prompting the Iranian delegation to walk out. Trump also indicated he had urged advisors to approve a ban on fuel exports.
In recent days, lawmakers from states heavily reliant on diesel have also called for such a measure, aiming to curb surging fuel prices amid reduced operating rates at major Middle East refineries and ongoing Ukrainian strikes on Russian energy infrastructure. Multiple oil and gas executives have warned against implementing this contentious policy. Crude has climbed more than 65% this year as the Middle East conflict disrupts traffic through the world's most critical energy chokepoint, with fuel markets seeing even sharper gains.
"High transit volumes through the Strait of Hormuz suggest Iran's leverage has weakened, implying Tehran may be more willing to reach a deal than before, but this also increases the possibility of escalation aimed at reasserting control," said Ryan McKay, senior commodity strategist at TD Securities. Brent futures for November settled 1.1% lower at $99.25 per barrel. WTI futures declined 1.2%, settling at $94.59 per barrel, with the October contract expiring on Tuesday.
Base Metals: Copper Heads Toward Historic Peaks
London copper moved closer to all-time highs, while New York copper touched record levels. Declining inventories, coupled with pre-holiday procurement demand, pointed to tightening supply in the physical market. The London Metal Exchange copper price, serving as the global benchmark, rose for a sixth consecutive session, closing within 1% of its historical peak.
At the settlement, LME copper gained 0.6% to $14,748.50 per tonne; LME aluminum edged down 0.1% to $3,265 per tonne; LME nickel advanced 1.9% to $16,632 per tonne; LME zinc slipped 0.4% to $3,910 per tonne; LME tin rose 0.5% to $54,214 per tonne; and LME lead was roughly unchanged at $1,936 per tonne.
Precious Metals: Gold Turns Higher
Gold reversed early losses to finish higher, as traders focused on how energy costs might influence the Federal Reserve's rate path. Gold has shown heightened sensitivity to oil price swings recently, with investors assessing whether persistently high energy prices could keep inflation elevated enough to push the Fed toward further rate hikes. TD Securities analyst Ryan McKay noted in a report that gold has been "extremely resilient" following the Fed's rate increase and hawkish signals, with falling energy prices also providing support.
As of 6:12 PM Eastern Time, spot gold rose 0.4% to $4,360.72 per ounce. Spot silver climbed 1.6% to $67.0785 per ounce.
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