[MARKET ANALYSIS] Crude slips as an Iranian ceasefire framework emerges

WTI and Brent futures have pulled back this morning in a continuation of the premium unwind following reports the US is proposing a one-month ceasefire mechanism being developed by Witkoff and Kushner, similar to frameworks used in Gaza and Lebanon, whilst US also sent Iran a 15-point plan to end the war (full Newsquawk Analysis on the board). Iranian representatives reportedly told the Trump administration that the bar for returning to ceasefire talks remains high. There are also efforts to begin talks as soon as Thursday. The reports of US diplomatic drive have driven cautious optimism that the conflict may ease, helping lift equities and weigh on crude. Brent is trading below USD 96/bbl (in a USD 93.45-97.00/bbl range), while WTI trades a little beneath USD 89/bbl (in a USD 96.59-89.57/bbl range), despite the continued disruption in the Strait of Hormuz and additional US troop deployments to the Middle East. As has been the case over this war, headline risk remains elevated.
Nat gas prices meanwhile are weaker by some 7.5% at the time of writing, trading on either side of EUR 50/MWh, whilst reports suggested Dutch gas storage levels fall to the lowest point for this time of the year since 2010.
Spot gold edged higher overnight and returned above the USD 4,500/oz level amid softer yields and lower oil prices, with the bullion currently within USD 4,456-4,602/oz. Analysts at ING suggest that “Near term, gold remains highly sensitive to Fed policy expectations, currency moves and geopolitical developments. Risks remain elevated as Iran retains control over the Strait of Hormuz and Israel continues operations against Iranian assets.”
Copper futures benefit alongside the positive risk environment amid hopes for a ceasefire in the Iran conflict, with 3M LME copper in a USD 12,192.00- 12,348.35/t. Desks also suggest that positioning data points to a cautious rebound in risk appetite across base metals.