Commodities Wrap 20 August: Oil Extends Iran Rally as Silver Jumps 3.5 Percent

By The Edge Research Team

Oil extended its rally into the settlement on Thursday as Washington sharpened its sanctions threats against Iran, and the metals complex followed with silver jumping 3.46 percent. WTI crude for September settled at 87.83 dollars a barrel, up 2.33 percent, on the contract’s final trading day, per CME Group’s contract calendar, and ICE Brent for October at 93.78 dollars, up 2.36 percent, per CNBC, after Treasury Secretary Scott Bessent told CNBC the United States will impose what he called “the toughest sanctions in history” against Iran and said he would hold a press conference Monday to lay out the economic warfare plan. Oil had risen more than 3 percent earlier in the session on President Donald Trump’s Wednesday threat that any country doing business with Iran will face economic consequences, then pared the move into the settlement, while Bessent said the market was misinterpreting the president’s comments and that maximum economic pressure means a large scale military restart is less likely, per CNBC.

Across the energy complex, the products followed crude while natural gas went the other way. Heating oil settled up 0.63 percent at 4.4803 dollars a gallon and RBOB gasoline up 0.24 percent at 3.2629 dollars, per CNBC. Natural gas for September fell 2.88 percent to 2.733 dollars per million British thermal units after the Energy Information Administration reported a 16 billion cubic feet injection that took working gas in storage to 3,169 billion cubic feet for the week ended 14 August, 185 billion cubic feet above the five year average, per the agency’s weekly storage report. The United Arab Emirates’ suspension of all trade and financial dealings with Tehran, announced after the Gulf state said two ballistic missiles had been launched toward its territory from Iran, an account Iran’s foreign ministry spokesperson denied, kept the geopolitical premium in place through the session, per CNBC.

Metals rallied broadly. COMEX silver for September jumped 3.46 percent to settle at 68.105 dollars an ounce, the day’s strongest move among the commodities, and platinum added 1.58 percent to 1,839.10 dollars, per CNBC. Gold for December recovered from a morning dip to settle up 0.57 percent at 4,571.40 dollars an ounce, reversing the profit taking that had it down 0.44 percent around midday GMT, while palladium edged up 0.31 percent to 1,338.40 dollars and copper eased 0.42 percent to 6.469 dollars a pound, per CNBC.

Agriculture stayed comparatively quiet. Corn for December rose 1.10 percent to 503.50 cents a bushel and wheat 0.36 percent to 700.00 cents, while soybeans for November eased 0.06 percent to 1,236.50 cents, per CNBC. Cocoa for December added 0.55 percent to 6,064.00 dollars a tonne and coffee 0.34 percent to 329.30 cents a pound, with cotton effectively flat at 88.34 cents and sugar down 0.17 percent at 17.52 cents, per CNBC.

In rates and the wider market, the bond move reversed. Treasury yields rebounded from the decline that followed the Treasury’s buyback expansion, per CNBC, with the 30 year yield up 4.5 basis points at 5.24 percent in the intraday snapshot, giving back half of Wednesday’s official 9 basis point drop, our calculation, and the 10 year up about 5 basis points at 4.70 percent, while Bessent said the buyback operation could be more than 4 billion dollars, per CNBC. The dollar index was little changed at 98.903, the Cboe Volatility Index jumped 7.86 percent to 16.06 and Bitcoin surged 5.96 percent to 72,410.95 dollars, per CNBC.

Table – Energy, 20 August, ranked by change:

Table – Metals, 20 August, ranked by change:

Table – Agriculture, 20 August, ranked by change:

Table – Rates, currencies, volatility and crypto, intraday 20 August, ranked by percent change:

Why it matters: The session separated the two halves of the sanctions trade. Crude added its geopolitical premium early on the economic warfare rhetoric and kept most of it through the settlement even after Bessent argued that maximum economic pressure makes a military restart less likely, which says the market is pricing the sanctions themselves, what Bessent called the blockade, and the risk to flows rather than the odds of renewed strikes, our reading. The transport system is already impaired: the EIA estimates crude oil and petroleum liquids moving through the Strait of Hormuz averaged 4.9 million barrels a day in the second quarter, down from 21.6 million a day in the final quarter of 2025 before the conflict, with production shut ins averaging 5.5 million barrels a day in July, per the agency’s August Short Term Energy Outlook. Silver’s 3.46 percent surge alongside gold’s recovery from a morning dip shows the precious metals bid broadening beyond gold, our reading, while natural gas’s slide on a storage build 185 billion cubic feet above the five year average is a reminder that domestic fundamentals, not geopolitics, still set the price in that market.

Outlook: The next catalysts are Bessent’s Monday press conference laying out the sanctions plan, per CNBC, the next round of Hormuz shipping data, and next week’s inventory cycle, with the EIA petroleum report due Wednesday and the storage report due Thursday. The reversal in Treasury yields puts the follow through of the buyback programme, with operations from 9 September, back in focus for the metals complex, our reading. With the September WTI contract expiring Thursday, the October contract becomes the reference from the next session, per CME Group, and Friday’s session will show whether the geopolitical premium carries into the weekly close.

Sources: CNBC; the US Energy Information Administration; CME Group.

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