[MARKET ANALYSIS] Crude rebounds as US and Iran’s flare-up ripples through the Middle East

Energy prices have bounced back following the flare-up in the Middle East since yesterday’s European close. To briefly recap, Iran and the US reported strikes against each other's assets. US CENTCOM said Iran launched several ballistic missiles toward neighbouring countries, with the UAE, Saudi, and Kuwait among the targets. Kuwait’s General Civil Aviation Authority said an emergency plan at Kuwait International Airport was activated after Terminal 1 was targeted by Iranian drones and missiles. IRGC said the US attacked Qeshm Island and that Iran responded with precise and intensive missile strikes on US bases in Kuwait. IRGC warned that any further US aggression would be met with a seismic, crushing and decisive response. On negotiations, US President Trump said reports that US-Iran communications had stopped were false and that conversations had continued continuously, while US Secretary of State Rubio said nuclear negotiations are highly complicated and technical and will take time (Full recap available on the Newsquawk headline feed).
WTI Jul and Brent Aug futures are on firmer footing and near highs, with upside seen this morning as European traders entered the market and shortly after the aforementioned Kuwait civilian infrastructure strike. The former resides in a USD 93.45-96.56/bbl range whilst the latter sits at the top of a USD 96.44-98.68/bbl range. Dutch TTF trades higher by almost 3.5% at the time of writing.
Spot gold and silver trade softer in lockstep with the gains in crude and hence the USD as inflationary woes remain ripe. The former dipped under yesterday’s USD 4,463/oz low to trade towards the bottom of a USD 4,451-4,497/oz range, with Monday’s low at USD 4,448/oz. Spot silver fell below USD 75/oz to trade in a USD 74-75.33/oz range.
Base metals are also across the board amid similar inflationary/stagflationary woes arising from elevated crude prices. 3M LME copper fell back under USD 14,000/t to trade in a USD 13,871.90- 14,025.13/t range.