Commodities Wrap 14 July: Oil Holds Near 85 Dollars as US Consumer Prices Fall 0.4 Percent and Gold Rebounds Above 4,050
The commodities board flipped from Monday’s panic to Tuesday’s recalibration. Brent crude traded at 85.07 dollars a barrel in late New York trade, up 2.12 percent from Monday’s 83.30 dollar settlement, easing back from prints near 86.50 in Asian hours, covered in our MENA-Asia wrap earlier today, while the June US inflation report landed softer than any month since the pandemic: consumer prices fell 0.4 percent on the month, the largest one-month decrease since April 2020, on a 9.7 percent drop in gasoline. Gold rebounded 1.23 percent to 4,054.90 dollars an ounce, recouping nearly half of Monday’s slide, our calculation, and the VIX fell 4.37 percent to 16.41.
Oil is consolidating the blockade premium rather than extending it. Brent’s 85.07 dollar print leaves the benchmark about 11.9 percent above Friday’s pre-announcement settlement, our calculation, after Monday’s surge on the announced reinstatement of the US naval blockade on Iranian shipping, covered in our previous commodities wrap. WTI rose 1.91 percent to 79.63 dollars from a 78.14 dollar settlement. US natural gas was the board’s quiet corner again, up 0.66 percent at 2.916 dollars per million British thermal units.
The demand-side number arrived from Beijing before the US inflation print. China’s June crude imports fell 41.3 percent from a year earlier to about 29.3 million tons, a level Bloomberg’s coverage put near a decade low, even as the country’s overall exports jumped 27.0 percent, per the customs release. The world’s largest crude buyer is taking dramatically fewer barrels through the disruption, which caps how far a supply-risk rally can run on its own, our reading.
The June US inflation report reads like a postcard from June’s cheaper-oil interlude, before this week’s blockade reinstatement. The 0.4 percent monthly decline in the all items index was driven by energy, down 5.7 percent on the month with gasoline down 9.7 percent, reflecting June’s crude slump, while core prices excluding food and energy were unchanged on the month and up 2.6 percent on the year. Headline inflation still runs at 3.5 percent annually with the energy index up 15.7 percent over twelve months, per the Bureau of Labor Statistics. The catch is in the calendar, our reading: the gasoline plunge that produced the softest headline print in six years happened in June, and July’s pumps are being priced off a Brent curve that has since risen by more than a tenth.
The policy voice arrived ninety minutes after the data. Chair Kevin Warsh, delivering his first semiannual testimony before the House Financial Services Committee, said the committee has “no tolerance for persistently elevated inflation” and confirmed that the June meeting held the federal funds target range at 3.50 to 3.75 percent, per the prepared remarks published by the Federal Reserve. The pairing of a negative monthly CPI print with that language left markets pricing relief rather than easing, our reading of the session.
Metals and crypto traded the softer-inflation read. Bitcoin led the board, up 3.97 percent at 64,540 dollars, with palladium close behind, up 3.94 percent at 1,302.00 dollars. Silver rose 1.59 percent to 58.90 dollars, platinum 1.44 percent to 1,636.90 and copper 1.31 percent to 6.363 dollars a pound, while the 10-year Treasury yield eased about 2 basis points to 4.59 percent after the inflation release. US equities traded higher into the close, the S&P 500 up 0.44 percent and the Nasdaq up 1.04 percent, with the Dow flat.
Why it matters: A negative monthly inflation print alongside an oil shock is a combination markets rarely see, and it lands in the middle of the policy conversation: the soft June number gives the Federal Reserve room precisely as July’s energy repricing threatens to take it back, and Warsh’s first testimony planted the no-tolerance flag before the July numbers arrive. For the Gulf, the pairing sharpens rather than resolves the fiscal question, Brent near 85 dollars closes more of the gap to the 94 dollar breakeven Fitch flagged for Saudi Arabia in 2027, covered on this site, a directional comparison since the breakeven refers to an annual average rather than a single session’s print, while China’s 41.3 percent June import cut shows the volume cost of the same crisis whose latest escalation lifted the price.
Outlook: The markers from here: Warsh’s Senate testimony on Wednesday alongside US producer prices and China’s second-quarter GDP, how war-risk insurance and tanker rates continue to re-quote against the declared blockade, and whether the June inflation reprieve survives its first full month of blockade-priced gasoline. Official settlements will show how much of the late-session move holds on the daily marks.
Table – Commodities, rates, volatility and crypto, late New York trade 14 July, ranked by change:
| Instrument | Level | Change |
|---|---|---|
| Bitcoin | $64,539.98 | +3.97% |
| Palladium | $1,302.00 | +3.94% |
| Brent crude | $85.07 | +2.12% |
| WTI crude | $79.63 | +1.91% |
| Silver | $58.90 | +1.59% |
| Platinum | $1,636.90 | +1.44% |
| Copper | $6.363 | +1.31% |
| Gold | $4,054.90 | +1.23% |
| US natural gas | $2.916 | +0.66% |
| US 10-year Treasury yield | 4.59% | -2 bps |
| VIX | 16.41 | -4.37% |
Price basis: CNBC quotes in late New York trade, pulled about 19:00 UTC on 14 July, against Monday’s settlements; figures are late-session quotes, not official settlements.
Sources: US Bureau of Labor Statistics; Federal Reserve; General Administration of Customs of China; CNBC; Bloomberg.
