[MARKET ANALYSIS] Crude complex continues to slip with ships continuing to sail through the Strait, despite an attack

The US-Iran situation remains complex. It was reported that the IRGC attacked a Singapore-flagged cargo ship, after it attempted to traverse through the Strait through a route not designated by the Iranians. This led the UN to pause its evacuation plans for ships around the Strait. Despite the attack, Bloomberg data continues to indicate that ships continue to traverse through the Hormuz, highlighting that traffic continues to flow in “both directions”.
On the Lebanon front. The US-mediated Lebanon-Israel talks were expected to conclude on Wednesday, but were then extended into today. Israeli sources have suggested that there has been some progress, but no deal has been reached thus far. The negotiations focus on the withdrawal of Israeli troops from southern Lebanon; there may be a chance that Israel will only withdraw from areas where operations have already been concluded, and continue such action in other parts of the region. Therefore, the risk is that Iran is not satisfied by the outcome of the talks, and potentially restart closures of the Strait.
Crude benchmarks are in the red, with WTI (-3.5%) and Brent (-3.4%) holding at the bottom end of their respective USD 68.98-71.86/bbl and USD 72.14-75.13/bbl ranges. Despite the flare-up on the Strait in the prior session and the continued lack of progress between Lebanon and Israel, crude prices continue to slip. It is the case that as long as ships continue to traverse the Strait, other friction points can be ignored… at least in the short term.
Spot gold (+0.2%) is ever so slightly firmer this morning, but continues to remain near recent troughs. Today, the yellow-metal holds just above the USD 4k/oz mark, and within a USD 3,982-4,039/oz range. Elsewhere, base metals are broadly slightly lower this morning, with 3M LME copper currently off by c. 0.6%. It currently holds around USD 13.25k/t and within a USD 13,088.3-13,281/t range.