Commodities Wrap 22 July: Brent Climbs Above 94 Dollars and Gold Extends Its Safe-Haven Run Near 4,140 While Copper Breaks Lower
Oil led a supply-driven session. Brent crude rose 3.52 percent to 94.21 dollars, after touching 95.47 during the day, and West Texas Intermediate gained 3.13 percent to 86.98 dollars, after President Trump threatened to bomb bridges and power plants in Iran and the US Secretary of State said Tehran was not serious about reaching a deal, per CNBC, while the US military carried out an eleventh consecutive night of strikes on Iran and Yemen’s Houthis declared an embargo on ships that load or deliver cargo at Saudi ports. The supply-risk bid carried gold and silver higher, while copper, the growth-sensitive metal, broke the other way.
Both crude benchmarks held their gains into the US afternoon. The catalyst was diplomatic and military rather than about inventories: the US Secretary of State said Washington remained willing to negotiate but that the Iranians did not seem serious, and that US forces would continue to defend transit through the Strait of Hormuz, per CNBC, while the Houthi embargo threatened Saudi barrels that had been rerouted to the Red Sea to compensate for the loss of flows through Hormuz. Ship-tracking data showed five tankers changed course in the Red Sea during the session after the Houthi warning against sailing to Saudi ports, two of them signalling the Suez Canal as their new destination, per Reuters. TD Securities said oil in the 90 to 100 dollar range was supported by tightening fundamentals as Hormuz exports slowed and Red Sea risk rose, per CNBC. Brent now sits about 24 percent above its 10 July pre-escalation settlement, our calculation, extending the run our wraps have tracked. Oil advanced even as US inventories built: the Energy Information Administration reported commercial crude stocks rose about 2.0 million barrels to 411.7 million in the week to 17 July, with gasoline up about 0.8 million and distillates about 1.4 million, per the EIA, so the day’s bid was about supply risk rather than a tighter domestic balance, our reading.
Precious metals tracked the risk-off tone. Gold rose 1.54 percent to 4,139.20 dollars, after a session high of 4,171.40, extending its two-week high as investors moved to the safe haven, per CNBC. Silver added 1.79 percent to 60.17 dollars an ounce, back above the 60 line, and among the platinum-group metals palladium firmed 0.92 percent to 1,298.50 dollars and platinum 0.47 percent to 1,645.60. Copper was the exception, off 1.21 percent to 6.47 dollars a pound, the growth-sensitive metal easing as the haven bid and demand worries pulled against the broad rally, our reading.
Natural gas firmed 2.06 percent to 2.924 dollars per million British thermal units, a move shaped more by domestic weather, storage and production than by the oil market’s geopolitical catalyst, our reading. The macro backdrop gave the metals little help: the ICE dollar index was effectively flat at 101.13, and the 10-year Treasury yield firmed to 4.65 percent from 4.63 percent, so the precious-metals rally came without a weaker dollar or easier rates behind it, our reading.
Why it matters: The supply-risk premium is now the dominant force across energy and the defensive precious metals, though not the whole complex. A near six-week high in Brent and gold close to 4,140 dollars say the market is pricing an extended conflict and a haven bid at the same time, while copper’s slip is the tell that the repricing was concentrated in oil and safe havens rather than a broad vote on demand, our reading. With the dollar flat and yields a touch higher, the metals gain reads as a pure risk-off trade rather than a monetary one, our reading.
Outlook: The binary for oil remains the Strait of Hormuz and the Red Sea, with the US threat to strike Iranian bridges and power plants and the Houthi embargo on Saudi-linked ships keeping the supply path uncertain, per CNBC. The markers into the rest of the week are whether Brent can hold above 94 dollars, whether the Houthi embargo disrupts actual Saudi barrels, whether gold can defend the 4,100 line, and the next weekly US natural gas storage report.
Table – Commodities, intraday 22 July, ranked by change:
| Instrument | Level | Change |
|---|---|---|
| Brent crude | $94.21 | +3.52% |
| WTI crude | $86.98 | +3.13% |
| Natural gas | $2.924 | +2.06% |
| Silver | $60.17/oz | +1.79% |
| Gold | $4,139.20/oz | +1.54% |
| Palladium | $1,298.50/oz | +0.92% |
| Platinum | $1,645.60/oz | +0.47% |
| Copper | $6.47/lb | -1.21% |
Price basis: CNBC intraday most-active continuous futures quotes captured about 2:31 p.m. Eastern time, roughly 9:31 p.m. Kuwait time, on 22 July, measured against the previous session’s settlements; these are intraday quotations, not official exchange settlements, and should not be read against front-month official settlement series without identifying the contract month; metals are quoted per troy ounce, copper per pound, crude per barrel and natural gas per million British thermal units; the Brent pre-escalation calculation is against the 10 July settlement implied by our published record.
Sources: CNBC; Reuters; US Energy Information Administration.
