[MARKET ANALYSIS] Crude subdued following yesterday’s surge, awaiting concrete US-Iran updates

Crude futures are subdued this European morning as the complex takes a breather from yesterday’s surge, with upside capped by constructive comments from US President Trump. To recap, US President Trump said talks with Iran were continuing at a rapid pace and that he believes an agreement to extend the ceasefire and reopen the Strait of Hormuz could be reached within the next week. That being said, it was reported this morning that Iran’s final text is still being discussed in Tehran and no response has been sent yet; Mehr News reported, citing sources. Meanwhile, a senior Iranian official said renewed war with the US is 'inevitable', Arab News reported, citing state TV. Elsewhere, Lebanon emerged as a major issue, with Iran warning that continued Israeli actions could impact negotiations.
WTI and Brent front-month futures trade softer by some 0.7% apiece at the time of writing after the benchmarks settled higher by USD 4.80/bbl and USD 3.86/bbl, respectively, on Monday. Price action has been somewhat more muted amid a lack of tangible headlines, with no major reaction seen on the Mehr News sources, as it could indicate continuing efforts for some sort of deal. That being said, updates on the Lebanon front could emerge as a proxy for the state of talks, with Iran reportedly warning that the ongoing hostilities between Israel and Lebanon could derail talks. WTI Jul resides in a USD 90.56-92.65/bbl range, Brent Aug trades in a USD 91.00-92.85/bbl range. Dutch TTF trades -2.5% within the recent EUR 47-48/MWh range.
Spot gold is slightly firmer as the USD remains subdued by oil prices, with the yellow metal in a USD 4,463-4,541/oz range, within yesterday’s USD 4,447-4,546/oz range. Spot silver similarly rebounds but tops yesterday’s high (USD 76.29/oz) to currently trade towards the top end of a USD 74.48-76.93/oz range.
Base metals are firmer across the board amid the softer USD and softer oil prices, coupled with a firm performance across Chinese markets overnight. 3M LME copper resides in a narrow USD 13,821.53- 13,992.22/t range at the time of writing.

Related headlines