Oil Prices Plummet as Supply Fears Ease, Gold Rebounds

Oil prices plummeted on Thursday as concerns over immediate supply disruptions in the Middle East eased. The international benchmark Brent crude declined by 3.5% to around $102.10 per barrel, while US benchmark West Texas Intermediate (WTI) dropped 3.1% to $99.31 per barrel, falling below the $100 threshold.

The oil market's volatility was attributed to developments offering alternative export routes and the prospect of restoring disrupted infrastructure, reducing fears of an acute supply shortage. However, uncertainty surrounding Middle Eastern supplies continues to keep the oil market volatile, with the Strait of Hormuz remaining a key source of risk.

On the other hand, precious metals rebounded as the recent oil price rally lost momentum, easing concerns over energy-driven inflationary pressures. Gold climbed 1.1% to $4,308.80 per ounce, recovering from losses recorded in the previous session, while silver gained 1.2% to $63.97 per ounce.

The recovery came as reports that Saudi Arabia was seeking to restore around half of the capacity of its East-West oil pipeline within days and return the route to full operation within six weeks helped cool crude prices. Additionally, US Energy Secretary Chris Wright's statement that 18 million barrels of crude oil and petroleum products had passed through the Strait of Hormuz earlier in the week contributed to the sentiment.

However, gains in precious metals were limited after the US Federal Reserve raised interest rates and signaled another increase before the end of the year. The Fed on Wednesday lifted its federal funds target range by 25 basis points to 3.75-4%, marking its first rate increase in three years. Higher interest rates typically weigh on non-yielding assets such as gold and silver by increasing the opportunity cost of holding them.