Crude oil prices fluctuated during the session as negotiations between Iran and the U.S. regarding the Strait of Hormuz showed little sign of a breakthrough, while traders assessed data from major energy forecasting agencies. Copper prices continued to decline, with uncertainty in the Middle East exacerbating concerns about the economic and demand outlook. Gold prices rose as moderate U.S. inflation data eased worries about interest rate hikes.

Crude Oil: WTI Prices Volatile; Market Focuses on Strait of Hormuz Talks Amid Surge in U.S. Inventories

Crude oil prices fluctuated during the session as negotiations between Iran and the U.S. regarding the Strait of Hormuz showed little sign of a breakthrough, while traders assessed data from major energy forecasting agencies.

WTI settlement prices remained largely flat near $83 per barrel, following a cumulative 10% gain over the previous four trading sessions. News surrounding the reopening of this vital waterway continued to drive futures prices, with the market oscillating between optimism over a potential agreement and signs of stalled negotiations.

U.S. President Donald Trump claimed the U.S. had "full control" of the Strait of Hormuz, even as both Washington and Tehran hardened their stances. Meanwhile, Pakistan indicated that the deadline for a U.S.-Iran memorandum of understanding could be extended.

The U.S. Energy Information Administration (EIA) reported a 17.4-million-barrel increase in U.S. crude inventories last week—nearly double the estimate from a closely watched industry group—causing oil prices to briefly touch intraday lows. This marked the largest inventory build in over three years, coinciding with U.S. crude imports rising to their highest level since November 2024.

At the same time, U.S. diesel exports hit a record high, approaching 2 million barrels per day, which drove up diesel futures. Data from the American Automobile Association (AAA) indicates that tight supplies in the refined products market have pushed gasoline and diesel prices to their highest levels for this time of year. "Persistently weak crude exports, combined with a sharp surge in imports, drove the second-largest weekly increase in crude inventories on record, with the vast majority of the build occurring along the Gulf Coast," said Matt Smith, an analyst at market intelligence firm Kpler.

The massive inventory build did not fully dispel market concerns about whether U.S. oil supplies could offset the severe supply losses resulting from a potential war involving Iran. Data released by the International Energy Agency (IEA) on Wednesday indicated an estimated market supply deficit of 1.8 million barrels per day.

In New York, WTI crude futures for September delivery rose 7 cents to settle at $83.27 per barrel;

Brent crude futures for October delivery edged up 7 cents to settle at $88.98 per barrel.

Base Metals

Copper prices extended their decline as uncertainty regarding progress on an agreement to reopen the Strait of Hormuz exacerbated concerns about the economic and demand outlook.

Recent gains in copper prices dampened buying interest, causing the Yangshan copper premium to fall to $96 per tonne on Wednesday.

Jinrui Futures stated in a report: "High copper prices recently have led to a weakening of short-term downstream consumption."

At the close, LME copper fell 0.2% to $14,132 per tonne;

LME aluminum fell 1.6% to $3,310.5 per tonne;

LME nickel rose 0.7% to $16,948 per tonne;

LME zinc rose 0.8% to $3,757 per tonne;

LME tin fell 0.2% to $55,818 per tonne;

LME lead rose 0.1% to $1,909.5 per tonne.

Precious Metals

Gold prices climbed above $4,400 per ounce as U.S. inflation data met expectations, easing market concerns regarding Federal Reserve interest rate hikes.

Following the release of the inflation data, gold prices rose as much as 1.6%, nearing the two-month high touched earlier in the week. Ryan McKay, a senior commodities strategist at TD Securities, stated that the CPI data "did little to reignite market pricing for Federal Reserve rate hikes, and recent price action highlights that the gold market increasingly does not anticipate a Fed rate hike."

As of 5:00 p.m. ET, spot gold rose 0.9% to $4,408.29 per ounce;

Spot silver rose 1% to $65.3242 per ounce.

(Source: Global Market Report)

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