[MARKET ANALYSIS] Crude on a firmer footing despite diplomatic efforts and heading into the weekend

In terms of the latest on geopolitics, Al Arabiya/Al Hadath reportedly obtained a draft US-Iran agreement which, if approved, would see an immediate and unconditional ceasefire across all fronts. The draft calls for a halt to military operations and media escalation, a commitment not to target military, civilian or economic infrastructure, respect for sovereignty and territorial integrity, and guarantees for freedom of navigation in the Arabian Gulf, Strait of Hormuz and Sea of Oman. It also includes a joint monitoring/dispute-resolution mechanism, gradual US sanctions relief in return for Iranian compliance, adherence to international law and the UN Charter, and the start of talks on outstanding issues within seven days. The agreement would take effect immediately once officially announced by both sides. Pakistan sources said the US and Iran's insistence on raising the bar for their demand re. uranium and the Strait of Hormuz have led to a "crisis in negotiations”.
This latest report is identical to the reports from yesterday, which Iran poured cold water on. To recap, Al Arabiya TV on Thursday was initially reported to have obtained the final draft of a prospective Pakistani-mediated US-Iran agreement, although it was later stated that these reports were fabricated. Meanwhile, a senior Iranian source said no deal had been reached yet, but gaps have narrowed, with Iran's uranium enrichment and its control over the Strait of Hormuz among the sticking points.
Elsewhere in the space that has not received much attention, unconfirmed reports of explosions in the UAE. Tasnim reports, "Some Arab sources claimed that the explosion occurred in Abu Dhabi"; Details of the explosions have not yet been released. Further, Chairman of Yemen’s Supreme Political Council declares solidarity with Iran and highlights Yemen's "readiness to respond to any US or Israeli aggression". Note, Yemen sits directly on the eastern side of the Bab al-Mandeb Strait.
WTI and Brent July futures are on a firmer footing heading into a weekend of risk, and with the sides reportedly hitting a crisis in talks amid raising the bar for demands regarding uranium and the Strait of Hormuz. WTI resides in a USD 96.92-98.93/bbl range while its Brent counterpart trades in a USD 103.77-105.85/bbl parameter. Dutch TTF is softer but has been trending higher throughout the morning, with prices now hovering just under EUR 49/MWh.
Spot gold and silver are softer amid the elevated crude prices. Spot gold trades within a narrow USD 4,507-4,545/oz range, within yesterday’s parameter (USD 4,488-4,570/oz range), while spot silver trades on either side of USD 76/oz in a USD 75.69-77.04/oz range, within yesterday’s parameter.
Base metal futures are mostly firmer amid the overall risk appetite across stocks amid ongoing headlines regarding Pakistani efforts to narrow the gaps between the US and Iran. Elsewhere, ING highlights that “The latest numbers from the National Bureau of Statistics (NBS) show that China’s refined copper output rose 3% year-on-year to 1.3mt in April, driven by soaring sulfuric acid byproduct prices that lifted margins and motivated stronger operations.” 3M LME copper resides in a USD 13,556.60-13,693.00/t. Note that the LME is closed on Monday amid a UK bank holiday.