Crude oil prices have halted their recent rally as investors assess the actual volume of oil currently moving through the Strait of Hormuz. Gold prices edged lower, falling below $4,400 per ounce, amid signs of easing US inflation. Aluminum prices continued to retreat from seven-week highs as concerns over tight supplies abated.

Crude Oil: WTI Rally Stalls; Traders Focus on Shipment Volumes Amid Strait of Hormuz Standoff

Crude oil snapped its recent winning streak; traders are evaluating current shipment volumes through the Strait of Hormuz while progress remains limited on agreements aimed at ending the conflict involving Iran.

WTI settled near $81 per barrel, following a cumulative gain of approximately 10% over the previous five trading sessions. The futures market has shown a muted response to recent White House commentary regarding the waterway, and signs of profit-taking emerged on Thursday following the recent sharp climb in prices.

"Today's movement looks more like buyers stepping back rather than a genuine, strong bearish sentiment in the market," said Rebecca Babin, a senior energy trader at CIBC Private Wealth Group. "Coupled with yesterday's report of a significant build in US crude inventories, there really isn't much incentive for buyers to step in right now."

Traders are assessing the scale of crude oil currently moving through the Strait of Hormuz. US Energy Secretary Chris Wright stated on Tuesday that the average daily volume of oil transiting the strait over the past week was 9 million barrels—a figure far exceeding various industry estimates—raising fresh questions about the actual size of the supply gap. Meanwhile, data from the US Energy Information Administration (EIA) showed a 17.4-million-barrel increase in crude inventories last week, a factor that could provide some downward pressure on prices in the short term.

Crude oil recovered some of its losses after Yemen's Houthi rebels claimed an attack on Saudi Aramco's refinery in Jazan, located on the Red Sea coast.

Elsewhere, major oil producers—including the UAE and Saudi Arabia—are working to maintain their export flows. However, with negotiations between the U.S. and Iran appearing deadlocked and both sides hardening their stances, crude oil prices are still expected to rise this week.

Brent crude futures for October delivery settled 2.2% lower at $87.07 per barrel.

WTI futures for September delivery fell 2.4%, settling at $81.25 per barrel.

Base Metals: Aluminum prices continued to retreat from seven-week highs.

Aluminum prices fell for the second consecutive day on Thursday after a major Middle Eastern smelter announced plans to resume production earlier than expected, easing market concerns over tightening supplies.

Emirates Global Aluminium plans to ramp up production to pre-conflict levels by the first quarter of next year; a March attack by Iran had previously forced its main smelter to halt operations. Aluminum prices dropped sharply on Wednesday following this news.

Prior to Wednesday's decline, aluminum prices had risen for seven straight days as prospects for a U.S.-Iran agreement to reopen the Strait of Hormuz appeared to be fading.

The owner of Australia's largest aluminum smelter secured a A$2.5 billion (approximately US$1.8 billion) government bailout on Thursday, allowing the plant to continue operations and further easing supply-side pressures.

As of the close of the London market:

LME copper rose 0.1% to $14,148.50 per tonne.

LME aluminum fell 1.6% to $3,258.50 per tonne.

LME zinc fell 0.1% to $3,751.50 per tonne.

LME nickel fell 1% to $16,776 per tonne.

LME tin rose 0.1% to $55,854 per tonne.

LME lead fell 1.2% to $1,887 per tonne.

Precious Metals: Gold prices fell.

Gold prices dropped below $4,400 per ounce as signs of easing inflation reinforced market expectations that the Federal Reserve would keep interest rates unchanged next month.

Gold prices fell as much as 1.5% on Thursday to $4,343.91 per ounce. With energy and food costs falling, U.S. wholesale inflation cooled more than expected in July, and money markets now price in a less than 40% probability of a Federal Reserve rate hike in September.

While the prospect of no rate hike is generally favorable for non-yielding gold, interest rates remaining high for an extended period could make bonds more attractive to investors, thereby putting pressure on gold prices.

Additional U.S. employment reports are due before the Federal Reserve meets again next month. Investors will also be watching for a speech by Federal Reserve Chair Wash at the Jackson Hole symposium later this month.

Meanwhile, a renewed escalation of tensions in the Middle East could drive energy prices back up. Energy prices have been a key driver of inflation risks since the outbreak of the U.S.-Iran conflict.

As of 4:44 p.m. ET, spot gold fell 1.3% to $4,350.02 per ounce; silver dropped 1.4% to $64.42 per ounce; and platinum and palladium also declined. (Source: Global Market Report)

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