Oil fell sharply as geopolitical danger premiums light after US President Donald Trump stated Washington is speaking with Iran, whereas a broader commodities selloff exacerbated the slide.
West Texas Intermediate plummeted 4.7% to settle close to $62 a barrel, the most important loss since June, whereas Brent futures additionally nosedived. Trump downplayed Iran supreme chief Ayatollah Ali Khamenei’s threats of a regional struggle over the weekend, reiterating he is hopeful they will make a deal.
The Islamic Republic’s overseas ministry stated it hopes diplomatic efforts will avert a struggle. White Home envoy Steve Witkoff and Iranian Overseas Minister Abbas Araghchi are set to satisfy in Istanbul on Friday, Axios reported, citing two individuals accustomed to the matter.
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“The transfer decrease appears to be like extra like a positioning reset than a basic shift,” stated Haris Khurshid, chief funding officer at Karobaar Capital LP. “With no new provide shock, oil is giving again some danger premium because the market recalibrates after pricing in near-term disruption that simply did not materialize.”
Crude was additionally hit as commodities, notably metals, got here below intense promoting stress. Gold fell as a lot as 10%, and copper at one level dropped greater than 5% as they continued a retreat that began on Friday.
The precipitous drop comes on the again of WTI’s greatest month-to-month enhance since 2023, supported by broad-based flows into commodities throughout the identical interval. The prospect of battle with Iran and pockets of provide disruption led to a surprisingly tight first month of the yr. Nonetheless, the broader backdrop is one among elevated provides, notably within the first half of 2026.
At present costs, the sharp reversal will set off promoting from trend-following commodity buying and selling advisors, in line with James Taylor, head of the quant service at advisor Power Facets. Extra promoting would come if Brent falls under $65 a barrel, he added, noting that giant ranges of choices open curiosity might additionally exacerbate value swings.
Fast shifts in monetary flows have amplified the strikes in oil costs up to now this yr. Merchants started the yr with bumper quick positions which have rapidly reversed after weeks of geopolitical tumult.
Elsewhere, the US and India reached a commerce settlement chopping tariffs on Indian items after Prime Minister Narendra Modi agreed throughout a cellphone name to cease shopping for Russian oil. Shipments of Moscow’s crude to Indian ports have tumbled towards the bottom in additional than three years, contributing to a rising pool of unsold sanctioned barrels throughout the globe.
Oil Costs
- WTI for March supply declined 4.7% to settle at $62.14 a barrel in New York.
- Brent for April settlement fell 4.4% to settle at $66.30 a barrel.
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