The oil market is on edge ahead of the US midterm elections, with growing concerns over potential escalation in the Persian Gulf. ICE Brent crude settled nearly 2.4% higher on Friday, closing above $113 per barrel, while the Dec-26 contract expired at $117.64 per barrel. Attacks on vessels in the region have increased, though traffic through the Strait of Hormuz has also risen. Reports suggest President Trump prefers diplomacy over strikes, which has slightly eased early morning trading today. Iranian negotiators met with Qatari mediators over the weekend, but the outcome remains uncertain.
In Russia, attacks on refineries have resumed after a brief pause, which had driven the ICE gasoil crack below $70 per barrel to its lowest level since early October. OPEC+ kept output targets unchanged for December, though many members are producing below their targets due to disruptions.
Speculators increased their net long position in ICE Brent by 3,576 lots last week, reaching 245,457 lots. However, this is still below the year-to-date high of around 430,000 lots seen in March. European gas prices surged over 6% on Friday, settling near EUR104 per MWh, as colder-than-usual weather forecasts signal the start of the heating season.
Gold hit a one-year low, dropping 3.65% to $3,874.62 per ounce, as oil prices surged and inflation concerns grew. Silver fell over 6%, extending its October decline to roughly 18%. Copper prices also declined due to broader market risk-off sentiment, though physical market tightness suggests a price floor remains. Corn prices slid nearly 11% last month, the largest monthly decline since June 2023, driven by increased harvest supplies and weaker export demand.