Crude oil pressures rise amid Hormuz flows and Saudi attacks
Crude oil prices are under pressure this morning, despite renewed attacks on Saudi facilities. WTI November futures and Brent December futures have softened after Monday’s volatile session, weighed down by recovering crude flows through the Strait of Hormuz and Saudi official selling price (OSP) cuts. Kpler data revealed that daily crude flows through the Hormuz Strait averaged 10.3 million barrels per day (BPD) in the seven days leading up to Saturday, which is about 76% of pre-war levels. Former President Trump also stated that the US had secured the Strait and anticipated an imminent end to the Iran war.
Geopolitical tensions persist, with reports of another Yemeni attack on Saudi Aramco facilities in Jeddah. Saudi Arabia confirmed that Jazan and Najran airports were struck on Monday. Iran’s officials warned of potential retaliation against any US or Israeli ‘miscalculation,’ although diplomatic efforts continue. Iran mentioned that talks in Doha focused on Qatari and Pakistani proposals to ease regional tensions. WTI prices have dropped from a high of USD 90.05 per barrel to USD 88.24 per barrel, while Brent has declined from USD 100.99 per barrel to USD 99.38 per barrel.
Meanwhile, Dutch TTF natural gas prices surged to EUR 76.45/MWh from EUR 74.03/MWh, driven by ongoing concerns over European energy security. Equinor noted that European gas customers are increasingly open to signing long-term contracts extending into the 2040s. The European Commission President von der Leyen emphasized the need to address Europe’s structural vulnerabilities to volatile fossil fuel markets. In other news, drones attacked two commercial ships in the Black Sea off Bulgaria, sinking one.
Precious metals are mixed, with spot gold rising as the US dollar weakens alongside oil prices. Gold rebounded from USD 4,104 per ounce to above USD 4,150 per ounce, trading within a range of USD 4,104-4,152 per ounce. Spot silver remains little changed, fluctuating between USD 60.28 and 61.21 per ounce. Base metals are modestly higher, with copper extending gains amid positive risk sentiment and expectations for stronger AI-related demand. However, upside is limited due to the absence of mainland China for the National Day holiday, with 3M LME copper trading in a range of USD 14,393.08-14,485.00 per tonne.