Energy markets are experiencing a temporary resurgence, with oil prices rising after a two-day dip. This uplift follows statements from US President Donald Trump, who indicated his interest in maintaining Iranian oil exports amidst a declared ceasefire between Iran and Israel, following US airstrikes on Iranian nuclear sites. Trump mentioned that China could continue purchasing oil from Iran while expressing hope that they would also buy substantial amounts from the US. However, a senior White House official later suggested that existing curbs on Iran would persist.
Currently, West Texas Intermediate (WTI) crude is trading above $65 a barrel, and Brent crude is close to $68 after a notable 13% decline over the previous days. The Brent time spread has tightened from a peak of $1.77 per barrel in backwardation last Thursday to around $1 this morning. Despite this reduction, the figure remains high compared to the first half of the year, when it fluctuated between $0.25 and $0.50 per barrel. Although immediate supply concerns from the Middle East have eased slightly, they have not vanished entirely.
Notably, Iranian oil exports have increased despite regional tensions. In other developments, OPEC+ is scheduled for a video conference on July 6 to discuss a potential supply increase for August. In the U.S., the American Petroleum Institute (API) reported a significant drop in crude oil inventories by 4.28 million barrels, greatly surpassing the expected reduction of about 0.6 million barrels. Meanwhile, gasoline inventories saw a modest increase of 0.8 million barrels while distillate inventories fell by 1.03 million barrels.
In metals, the London Metal Exchange (LME) has reported a continued rise in copper prices amid tight supply conditions. Immediate delivery contracts surged to a premium of $379 per ton over three-month futures on Monday, although this premium has since decreased to around $150 per ton. This tightening in the copper market is attributed to a significant inventory drop of around 176,000 tons this year, now at just 95,000 tons. Moreover, in precious metals, gold prices declined by more than 1% to $3,324 per ounce as both Israel and Iran seemed to maintain the ceasefire agreement.
An improving economic sentiment has also weakened silver prices. Further struggles for gold stem from market expectations that Fed Chair Jerome Powell may delay further rate cuts, especially with inflation remaining above long-term targets while the Fed assesses the impact of import tariffs.