[MARKET ANALYSIS] Crude rises as geopolitics show no real signs of abating; copper falls as sentiment deteriorates

• WTI and Brent front-month futures have been grinding higher since early European hours following a choppy APAC session and the declines seen during the prior session. Yesterday, there was a bout of selling pressure after US Energy Secretary Wright mistakenly posted that the US Navy escorted an oil tanker through the Strait of Hormuz, although oil then pared some of the losses as the post was deleted shortly after, and the White House confirmed that this was false. There was a further paring of losses after CBS reported that US intelligence had begun to see indications that Iran is taking steps to deploy mines in the Strait of Hormuz, while the IEA meeting also ended with no decision on a crude stockpile release. Although gains were wiped out after a WSJ article that the IEA proposed the largest ever release of oil from strategic reserves to bring down the price of crude, and that countries will decide today whether to release oil stocks. The report offered no figures, but suggested the release would exceed the 182mln bbls of oil that IEA member countries put onto the market in 2022 when Russia invaded Ukraine.
• Note, the IEA Governing Board is meeting today, whilst a separate G7 discussion on energy coordination is also scheduled for 14:00 GMT today. French President Emmanuel Macron is expected to host a video call with other G7 leaders to further discuss energy security.
• Going back to the Strait of Hormuz, upside in crude this morning coincided with reports that  UKMTO said it has received a report of an incident 50NM north-west of Dubai, with a bulk carrier hit by an unknown projectile. Earlier this morning, UKMTO received a report that a cargo vessel was hit by an unknown projectile in the Strait of Hormuz, which has resulted in a fire on board, while the crew are evacuating the vessel. Elsewhere, weekly Private Inventories yesterday showed a surprise draw in crude stocks alongside price-bullish internals. WTI Apr and Brent May reside between USD 81.79-88.59/bbl and USD 86.24-91.05/bbl, respectively, at the time of writing.
• Spot gold holds an upward bias on either side of the USD 5,200/oz level, with the precious metal kept afloat alongside the recent easing in oil price pressures, although DXY has clambered off worst levels as eyes remain on flows in the Strait of Hormuz. A deterioration in sentiment in early European hours cushions downside for the yellow metal for now, which resides in a narrow USD 5,175.35-5,223.38/oz at the time of writing.
• Copper futures traded rangebound overnight but then slipped in early European hours amid a broader deterioration of sentiment as the Iranian war shows no signs of ending despite recent commentary from US President Trump. 3M LME copper is back under USD 13,000/t and resides towards the bottom end of a USD 12,993.00-13,151.53/t at the time of writing.

Crude oil prices are rising amidst ongoing geopolitical tensions, particularly in relation to the Strait of Hormuz, as reports suggest increased activity from Iran. This situation may lead to supply concerns, especially if IEA discussions about releasing strategic reserves do not materialize. On the other hand, copper prices are declining, reflecting broader market sentiment deterioration tied to the ongoing conflict dynamics.