Commodities Wrap 10 July: Oil Slips as the IEA Sees the First Demand Decline Since 2020, Capping a Week of Sharp Swings
Commodities ended a turbulent week quietly on Friday, with crude oil edging lower as a bearish demand outlook from the International Energy Agency and signs of a diplomatic channel between Washington and Tehran offset lingering supply risk, while precious metals mostly eased and palladium extended its rebound. The levels below reflect CNBC’s active futures settlement values for the day, with metals settling in the early New York afternoon and energy contracts settling later in the session.
Energy drifted lower. Brent crude for September delivery slipped 0.39 percent to US$76.00 a barrel and West Texas Intermediate for August fell 0.96 percent to US$71.39. The IEA said in its monthly report on Friday that world oil demand is set to fall by 1 million barrels a day in 2026, the first annual decline since 2020, as the disruption to Gulf exports reshapes flows, and that the market could swing back to surplus toward the end of the year if tanker traffic through the Strait of Hormuz gradually recovers, an assumption it called dependent on a lasting peace agreement. The United States will engage in technical talks with Iran, CNBC reported, citing an MS Now report. Natural gas fell 2.39 percent to US$2.94 per million British thermal units, extending Thursday’s storage-driven slide.
Even with two days of declines, the week belonged to oil. Brent ended about 6.2 percent above its 2 July settlement and WTI about 4.3 percent higher, our calculation, with US markets closed on 3 July, a gap that measures the security premium built during a week of tanker attacks, strikes and blockade threats. Natural gas lost about 8.4 percent over the same stretch, our calculation.
Precious metals mostly eased as the week’s safe-haven bid cooled. Silver fell 1.08 percent to US$60.09 an ounce and gold slipped 0.67 percent to US$4,113.10, while palladium climbed 2.03 percent to US$1,279.50 and platinum was little changed at US$1,630.70. The gold to silver ratio held near 68.4, our calculation. On the week, gold was down about 0.5 percent and silver about 2.2 percent, our calculation, modest moves given the geopolitical backdrop.
In base metals, copper added 0.22 percent to US$6.2795 a pound, taking its weekly gain to about 1.6 percent, our calculation.
Why it matters: The IEA’s forecast cuts both ways for the Gulf. A first demand decline since 2020 is a headwind for the region’s producers, but the agency’s projected return to surplus rests entirely on the reopening of the Strait of Hormuz and the restart of regional fields and refineries, which puts the diplomatic track, in which Qatar has played a mediating role, at the centre of the oil outlook. For the region’s energy importers such as Egypt and Jordan, crude that ends the week 6 percent higher keeps import bills elevated even after two softer days.
Outlook: The immediate variables are the reported technical talks between Washington and Tehran and the pace of tanker traffic through Hormuz. OPEC’s monthly report is due on Monday 13 July, per the release schedule on OPEC’s website, and will give the producer group’s answer to the IEA’s demand call, while the US June inflation report on 14 July will set the tone for metals through the Federal Reserve outlook.
| Commodity | Settlement | Change |
|---|---|---|
| Palladium | US$1,279.50 | +2.03% |
| Copper | US$6.2795 | +0.22% |
| Platinum | US$1,630.70 | +0.04% |
| Brent Crude | US$76.00 | -0.39% |
| Gold | US$4,113.10 | -0.67% |
| WTI Crude | US$71.39 | -0.96% |
| Silver | US$60.09 | -1.08% |
| Natural Gas | US$2.94 | -2.39% |
Sources: CNBC; IEA.
