[MARKET ANALYSIS] Choppy crude trade as ships transit Hormuz while Russia bombards Kyiv on the eve of the NATO summit

Traders are intensely monitoring the physical flow of oil through the Strait of Hormuz for any immediate signs that the fragile US-Iran preliminary peace framework might be breaking down. While shipping volumes through this critical chokepoint have shown signs of a gradual, successful recovery—greatly easing the supply-crunch fears that peaked earlier this spring—market participants remain vigilant. Sticking with supply over the weekend, the OPEC+ agreed to expand its production targets by an additional 188k barrels per day for August as expected, marking its fifth consecutive monthly output hike.
Elsewhere, NATO leaders are readying for the Ankara summit on 7-8th July (Preview available on the Newsquawk headline feed). Ukraine, defence spending, industrial mobilisation, the Iran war and the future of the US security guarantee are all in focus. The backdrop has sharpened after Russia launched a major overnight missile and drone attack on Ukraine on 6 July, firing 68 missiles and 351 drones, with Kyiv reporting casualties and renewed damage ahead of Ukrainian President Zelensky’s arrival in Ankara.
WTI Aug and Brent Sep futures are ultimately on a softer footing following choppy APAC and European morning trade. Macro catalysts remain quiet, further compounded by a temporary lull in geopolitical headlines, driving a steady unwinding of the war premium that supported prices throughout H1 2026. WTI resides towards the lower end of a USD 68.18-69.21/bbl range, while Brent sits at the bottom end of a USD 71.48-72.45/bbl parameter.
Elsewhere, metals are mixed with precious metals softer after last week seeing its first weekly gain since May, supported by fading Fed rate hike expectations following the soft US jobs data, and lower energy prices. Meanwhile, overnight, it was reported that Hong Kong's pension fund will be able to invest in more gold ETFs as part of the government's push to make the city a gold trading hub, SCMP reports, citing sources. SCMP earlier reported that Hong Kong is to reportedly launch a gold clearing and settlement system. Price action this morning saw the yellow metal find resistance around the USD 4,200/oz mark, currently residing in a USD 4,144-4,202/oz range, with US traders set to return from their long weekend, and with ISM Services PMI ahead.
In terms of base metals, copper futures are rising for a third consecutive session in a USD 13,361.53- 13,464.00/t range, whilst aluminium extends a rebound from a four-month low, supported by fading Fed rate hike bets after Fed Chair Warsh last week said price risks were easing. Goldman Sachs lowered its LME aluminium price forecast to USD 2,950/t for Q4 2026 and lowered its 2027 average forecast to USD 2,700/t. Iron ore futures rose overnight before paring gains, after China last week expanded curbs on Fortescue, asking domestic steel mills and traders not to purchase new USD-denominated cargoes of its Super Special Fines product. Chinese funds also shifted into metal stocks and futures ahead of anticipated solid H1 earnings from producers, Bloomberg notes.