[MARKET ANALYSIS] Crude futures jump (Brent Aug'26 +4.7%) after Israel strikes on Lebanon causes Iranian retaliation

Crude futures surge after renewed Middle East tensions. Israel was the instigator, hitting Lebanese targets over the weekend, despite US President Trump urging Israeli PM Netanyahu to refrain from strikes. In retaliation, Iran launched missiles at Israel and the back-and-forth of strikes has continued into Monday morning. Israeli strikes have hit the Mahshahr petrochemical plant in SW Iran and have also struck military targets throughout the country. Yemen's Houthis, known to be aligned with Iran, announced that they are to stop Israel's maritime navigation in the Red Sea. Before this fresh wave of attacks, optimism for a deal seemed high, with US President Trump stating that he was supposed to announce a deal with Iran that would be signed this week.
In other news, the OPEC+ group agreed to a 188k bpd hike from July, its fourth increase in its oil output target.
WTI Jul'26 trades at the upper end of its USD 92.20-95.25/bbl range, but finding resistance at the 20-SMA (USD 95.36/bbl) while Brent Aug' briefly extended beyond the USD 98/bbl handle (USD 95.00-98.08/bbl).
Precious metals continue to selloff, with spot gold trading at the lower end of its USD 4268-4353/oz range while silver slips below USD 67/oz. This initial driver for the recent slide came following Friday's US jobs report, which came in stronger-than-expected and has further increased the likelihood of Fed hikes. The downside in Monday's trade comes amid a slightly firmer dollar following the renewed Middle Eastern strikes. Over the weekend, the PBoC extended its gold-buying streak to 19 straight months, adding 320k oz t in May.
3M LME Copper trades on a firmer footing, despite the heightened tensions, as it nears USD 13.6k/t.