Oil prices extended gains after an Iranian news agency reported that Iran had struck "hostile targets" in the Strait of Hormuz. Copper prices neared record highs as traders continued to assess demand for stockpiling ahead of potential U.S. tariff hikes and the impact of tightening spot supplies outside the U.S. Gold edged lower; the renewed rise in oil prices heightened inflation concerns and clouded the outlook for the Federal Reserve's interest rate path.

Crude Oil: Prices Extend Gains After Reports of Iran Striking "Hostile Targets" in the Strait of Hormuz

Oil prices extended gains after an Iranian news agency reported that Iran had struck "hostile targets" in the Strait of Hormuz.

U.S. and global benchmark crude oil futures rose more than 1% in post-settlement trading on Thursday. Earlier, WTI crude futures had risen for the first time in three days amid growing signs that a potential agreement between Iran and Oman would not lead to a full resumption of shipping through the Strait of Hormuz.

Iranian media had previously reported that Tehran would seek to ban U.S. and Israeli vessels from the waterway and demand compensation from hostile nations before granting them passage. Oil prices spiked to an intraday high following the news, as traders interpreted this to mean that exports from the Persian Gulf would remain restricted in the near term.

European natural gas futures surged as much as 12% after the Fars News Agency reported the strike, reflecting heightened risks for gas tankers.

The outlook for an agreement had already become increasingly uncertain prior to these latest developments. Iran had stated that the deal regarding the proposed shipping route was in its final stages. However, Iran insisted that the U.S. was not a party to the agreement with Oman and hinted that the resumption of normal navigation in the Strait of Hormuz would depend on the U.S. lifting its blockade of Iranian ports.

Dennis Kissler, Senior Vice President of Trading at BOK Financial Securities Inc., noted that crude traders remain focused on the progress of the potential deal. "The longer it drags on, the more likely oil prices are to rise again." WTI crude futures for September delivery rose as high as $78.33 per barrel, following a 2.8% gain in the previous New York settlement to $77.29 per barrel.

Brent crude futures for October delivery climbed to $83.49 per barrel, after settling 3.8% higher at $82.49 per barrel in the previous session.

Base Metals

Copper prices hovered near record highs as traders continued to assess demand for stockpiling ahead of potential U.S. tariff hikes and the impact of tightening spot supplies outside the U.S.

LME copper closed virtually unchanged, remaining close to the record high of $14,527.50 set in January.

Copper prices rose as much as 1.8% intraday following reports that the Democratic Republic of the Congo had suspended exports of copper and cobalt concentrates.

At the close, LME copper futures were essentially flat at $14,103.50 per tonne.

LME aluminum futures rose 0.6% to $3,259 per tonne.

LME nickel futures fell 2.1% to $16,762 per tonne.

LME zinc futures rose 0.9% to $3,763.50 per tonne.

LME tin futures fell 1.1% to $56,095 per tonne.

LME lead futures fell 0.1% to $1,884.50 per tonne.

Precious Metals

Gold edged lower, snapping a three-day winning streak. Renewed gains in oil prices heightened inflation concerns and clouded the outlook for the Federal Reserve's interest rate path.

Gold prices fell as much as 0.5% as oil prices and U.S. Treasury yields climbed, driven by escalating tensions in the Middle East and uncertainty regarding the reopening of the Strait of Hormuz.

Rising energy costs sparked speculation that the Federal Reserve might need to raise interest rates further to curb inflation. Since gold yields no interest, rate hikes are generally unfavorable for the metal's price.

As of 5:00 p.m. Eastern Time, spot gold was down 0.2% at $4,239.42 per ounce.

Spot silver fell 0.8% to $61.5416 per ounce. Source: Global Market Broadcast

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