Oil, Gas Prices Surge as Israeli Strikes Spark -2-

0849 ET - The Trump administration's goal of achieving lower oil prices will likely be complicated by Israel's strikes against Iran, which lifted Brent to $78.50 overnight, Citi analysts say in a note. "The only way to get to lower oil prices is through diplomacy, since oil supply can move more than demand." Since U.S. oil producers haven't moved to raise production, and Saudi Arabia is already accelerating the return of barrels, unlocking Iranian oil can be effective in increasing supply, "but Israel's military actions may delay or disrupt the U.S.-Iran negotiation process," they say. Citi expects any supply disruptions to be limited, and "we don't expect energy prices to stay elevated for a sustained period of time." ([e-mail])

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Base Metal Prices Slide on Risk-Off Sentiment -- Market Talk

1041 GMT - Base metal prices fall, with LME three-month copper down 1.4% at $9,553.0 a metric ton and LME three-month aluminum down 1.75% at $2,475.50 a ton. A stronger U.S. dollar and a general risk-off sentiment in the market following Israeli strikes on Iran overnight have sapped investor enthusiasm for metals. A partial agreement in the trade dispute between China and the U.S. earlier in the week largely failed to drag metal prices higher, Commerzbank analysts say in a note. While the price of aluminum initially rose on the trade talk news, the prices of nickel and copper fell. This suggests market uncertainty regarding the deal's implications, Commerzbank says. The agreement reduces the risk of renewed escalation, but tariffs still remain at a historically elevated level, damping demand expectations, analysts say. ([e-mail])

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Gold Futures Could Challenge Record Highs as Middle East Tensions Flare -- Market Talk

1035 GMT - Gold futures rise on safe-haven demand after Israel launched overnight strikes on Iran, followed by an Iranian counter drone strike. Futures are up 1.1% at $3,439.10 a troy ounce, nearing its all-time high of $3,509.90/oz, set in mid-April. The precious metal could reach new all-time highs on fears of a broader escalation in the Middle East, compounded by U.S. tariff uncertainty, Tradu.com's Nikos Tzabouras writes. Still, Tzabouras says that a path toward de-escalation and a contained conflict remains open. If tensions ease, gold prices could face a short-term, downward correction. That said, given the current risk-laden backdrop, bullish momentum looks well supported, Tzabouras adds. ([e-mail])

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Palm Oil Ends Higher, Tracking Crude Oil's Strength -- Market Talk

1026 GMT - Palm oil ended higher, tracking crude oil's strength. Crude oil prices rose sharply after Israel's attack on Iran raised concerns about supply disruptions. Higher crude oil prices make palm a more appealing option for biodiesel stock. Meanwhile, a survey signaling slower palm oil production in Malaysia in June added to the upside, Kenanga Futures said in a note. However, mounting inventory may temper further upside momentum, it adds. The Bursa Malaysia Derivatives contract for August delivery ended 88 ringgit higher at 3,927 ringgit a ton. ([e-mail])

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Israel's Attacks on Iran Won't Mean Renewed Inflation, Despite Oil-Price Rise -- Market Talk

0945 GMT - Global inflation isn't likely to see a sustained spike despite a rise in oil prices following Israel's attacks on Iran on Friday, analysts at Capital Economics write in a note. Oil futures gained more than $4 a barrel after the attacks on Iranian scientists and military leaders again stoked fears of an escalation of Israel's existing conflicts against the Palestinians. The price rise looks more down to risk premia, for now, than to any underlying shift in the market, Capital says. But if Iran were to close the Strait of Hormuz, or if its oil reserves were taken off the global market, then energy prices could stay higher, they say. The resultant inflation shock would be limited but could keep central banks cautious, Capital says. ([e-mail]; @joshualeokirby)

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Significant Mideast Oil Disruptions Could Prompt Global Strategic Reserves Tapping -- Market Talk

0849 GMT - Any significant oil supply disruptions in the Middle East that push prices sharply higher would likely prompt governments worldwide to tap into their strategic petroleum reserves, according to ING. "This would obviously have to be led by the U.S., which sits on more than 400 million barrels of crude oil in its SPR," says Warren Patterson, head of commodity strategy. The aim would be to ease immediate market pressure and stabilize prices in the short term. About a third of global seaborne oil trade passes through the Strait of Hormuz. Even if some flows are redirected, any disruption there could still leave roughly 14 million barrels a day of oil supply at risk, Patterson says. ([e-mail])

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OPEC's Ability to Offset Potential Supply Shortfalls Looks Limited -- Market Talk

0837 GMT - Any disruptions to Iranian oil supply could prompt OPEC to ramp up production more quickly, ING's Warren Patterson says. However, its ability to act as a buffer would likely be limited if tensions escalate further, he says. The cartel holds roughly 5 million barrels a day of spare capacity--an essential tool to mitigate supply disruptions and stabilize global prices--with the bulk of it sitting in the Persian Gulf. "If we are seeing disruptions to oil flows through the Strait of Hormuz, this spare production capacity will be of little help to the global oil market," the head of commodity strategy says. "Given the importance of the Strait, any disruptions would lead to a more globally coordinated response to ensure that energy flows at this chokepoint are not severely disrupted." ([e-mail])

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Gold-Miner Stocks Rise After Israeli Attack on Iran -- Market Talk

0833 GMT - Shares in gold-miner stocks rise after Israel's attack on Iran boosts demand for safe-haven assets. The precious metal is nearing its all-time high of $3,509.90 a troy ounceset in mid-April. Futures are also up 1% at $3,437.80 a troy ounce. South Africa's Harmony Gold and Gold Fields rise 2.1% and 1.5%, respectively. AngloGold Ashanti also rises 1.8% at the market open in Johannesburg. Australian-listed gold miners Northern Star and Newmont are also up by 5.2% and 4.9%, respectively.([e-mail])

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European Gas Price Rises After Israeli Strikes Alarm Markets -- Market Talk

0752 GMT - European natural-gas prices rose above 37 euros a megawatt hour in early trade after Israel's strikes against Iran raised fears of a wider regional conflict that could disrupt global flows. "So far TTF prices are still contained, but there is a higher risk premium now back in the market," says Florence Schmit, energy strategist at Rabobank. Traders are concerned about potential disruptions in the Strait of Hormuz, where roughly a fifth of global LNG passes through. "Qatar, Oman and the UAE operate roughly 18% of the world's LNG supply, so any disruptions to flows from especially Qatar could easily see TTF prices back in the EUR100/MWh," Schmit says. The benchmark Dutch TTF contract currently trades 2.9% higher at 37.24 euros a megawatt hour. ([e-mail])

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Gold Futures Rally as Israel Launches Strikes on Iran -- Market Talk

0735 GMT - Gold futures rise as Middle East tensions boil over. Futures are up 1% at $3,437.80 a troy ounce. Markets have shifted into a firm risk-off sentiment after Israel launched strikes on Iran's nuclear facility overnight, RBC Capital Markets analysts say in a note. Israel's strikes also killed the head of Iran's Revolutionary Guard and leading nuclear scientists, with Iran launching a drone counter strike this morning. Demand for safe-haven assets like gold have surged in response, RBC says. The precious metal is nearing its all-time high of $3,509.90/oz, set in mid-April. U.S. and European equity futures are losing ground alongside cryptocurrencies as investors shift funds into lower risk assets, RBC says. ([e-mail])

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Israel's Attack Creates Profit-Taking Opportunity -- Market Talk

0649 GMT - Israel's major attack on Iran's nuclear program and military leadership escalates tensions in the Middle East and triggers risk-off sentiment, creating an opportunity for those looking to sell stocks and take profits, CMC Markets' Jochen Stanzl says in a market comment. Oil prices are skyrocketing and the transportation of oil through the Strait of Hormuz is now at risk, the analyst says. The rapid oil-price surge could weigh on the euro, he says. "Investors are now grappling with the prospect of two wars and an ongoing trade conflict, prompting a reassessment of risks," Stanzl says. "Gold prices are heading towards record highs, equities are under pressure, and the dollar is rising once again. The events of the past few hours have sparked a broad risk-off movement among investors." ([e-mail])

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Comex Gold Futures Eyeing Further Gains, Chart Shows -- Market Talk

0641 GMT - Comex gold futures are eyeing further gains, based on the daily chart, RHB Retail Research's Joseph Chai says in a research report. Thursday's breakout at the $3,400/oz resistance level indicates that "bulls have returned to the driver's seat," Chai says. Also, both 20- and 50-day simple moving averages continue trending upward, and the relative strength index is rounding upward. Hence, the commodity should continue to rise toward subsequent resistance at $3,500/oz, the analyst adds. Spot gold is 1.1% higher at $3,424.30/oz. ([e-mail])

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Markets' Geopolitical Anxiety Could Fade Fast -- Market Talk

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06-13-25 1136ET