Oil Market Jitters Continue as US-Iran Tensions Escalate
The crude oil market saw some fluctuations in response to the escalating tensions between the US and Iran. WTI crude rose slightly after Iran claimed to have launched fresh strikes against U.S. military bases, but ultimately settled near $91 per barrel. Brent crude, on the other hand, edged lower, snapping a three-day winning streak, and settling near $95.50 per barrel.
The recent recovery in crude oil shipments through the Strait of Hormuz is at risk of reversal due to the ongoing conflict between the two countries. Saudi Arabia kept the selling price of its flagship crude unchanged for the coming month, indicating less market supply tightness than some investors had anticipated, which caused oil prices to pull back.
On a separate note, base metals rallied after U.S. President Trump indicated that any new U.S. military action against Iran would likely be short-lived, easing market concerns about further escalation in the Middle East. LME copper prices rose 0.8% to $14,333.5/tonne.
Gold prices also recorded their largest gain in two weeks, driven by a sharp drop in the US dollar against the Japanese yen and traders digesting comments from Federal Reserve officials regarding the interest rate path. Spot gold surged as much as 2.9%, breaching $4,500 per ounce and marking its largest intraday gain since August 19.