As a result of market optimism that a peace agreement between the united states and iran would end the war, crude oil prices fell sharply on wednesday. The concern that the conflict in the middle east would keep inflation and interest rates high has slowed down gold prices for the second consecutive day. Industrial metals such as copper at the london metal exchange are also low。
Crude oil: sharp drop in oil prices
With oil prices falling three times a week, the market is optimistic that a peace agreement will be reached between the united states and iran, despite us president donald trump’s implication that the two sides remain very divided in the negotiations。
Wti crude oil fell by almost 6 per cent, below $89 per barrel, at the lowest closing price since 17 april. Trump stated that he was “unsatisfied” with the negotiations leading to the end of this war for almost three months, while the white house denied the coverage of a draft interim peace agreement by iranian national television。
While trump's statements weakened expectations of an impending breakthrough in the negotiations, traders remained focused on the broader prospects for reaching agreement and reopening the strait of hormuz. Once an agreement has been reached, the oil market, which is severely under-supplyed, may receive large volumes of crude oil。
“it does seem that some positions are accelerating the fall in oil prices, but, more importantly, the market does not want to buy low,” says rebecca babin, a senior energy trader of the cia private wealth group。
Babin stated that traders were particularly cautious about holding oil-rich openings before news emerged showing progress towards ending the war. The kpper data show that trend-tracking commodity trade advisers have adjusted their wti positions from over 82 per cent to over 55 per cent, magnifying downward movement。
However, key differences remain in the negotiations between the united states and iran, including the assets freeze of $24 billion in tehran and iran's unwillingness to allow ships free passage through the strait. At the white house cabinet meeting, trump stated that no country would control the waterway。
As of close
Wti crude oil fell by 5. 6 per cent in july at a settlement price of $88. 68 per barrel。
In july, brent lost 5. 3 per cent of its crude oil at a settlement price of $94. 29 per barrel。
Precious metals: falling gold prices
The gold fell on wednesdays for the second consecutive day, owing to the market's fear that the middle east conflict would keep inflation and interest rates high, which overshadowed the prospect of a peace agreement between the united states and iraq。
Following a 1. 4 per cent decline on tuesday, the price of gold was delivered on wednesday below $4,500 per ounce. Iranian national television reported that, according to a draft interim peace agreement, maritime transport in the strait of hormuz would resume within one month of the entry into force of the agreement, although the white house called the information “false”。
For gold traders, the ceasefire does not hope to alleviate their concern that high oil prices will keep inflation high and force central banks to maintain higher interest rates for longer periods。
“even if an agreement is reached today, inflation will not be eased immediately.” ryan mckay, the senior commodity strategist in dominican securities, said in an interview. I therefore believe that the macro-environment remains less favourable for gold”。
By 3. 30 p. M. United states time in the east, the gold spot fell by 1. 2 per cent to $4451. 95 per ounce; the silver spot fell by 3 per cent to $74,612 per ounce。
Basic metals: low copper prices in the london market
As investors assess the prospects for a peace agreement between the united states and iran, basic metals, such as copper, go down at the london metal exchange。
As of closing on the london market
The lme period saw a decline of 0. 7 per cent in copper, reporting $13531 per ton
1 per cent reduction in lme aluminium reporting us$ 3636/ton
The lme period saw a 0. 6 per cent decline in zinc reporting $3512. 5 per ton
The lme nickel period fell by 0. 2 per cent, reporting $18,943 per ton
The lme period saw a 0. 6 per cent fall in tin reporting $54393 per ton
Lead in lme fell by 0. 4 per cent and reported us$ 2006/t。
