Commodity wrap: Crude plunges 6% on US-Iran peace hopes; gold up 1%

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The West Texas Intermediate crude oil prices plunged nearly 6% on Tuesday on renewed hopes for a peace deal between the US and Iran. Brent crude also dipped nearly 3% as both benchmarks slipped below the $100-per-barrel mark on Tuesday. Meanwhile, gold gained more than 1% to climb back above the $4,800 per ounce level as energy prices slumped, alleviating concerns about higher inflation. Silver gained close to 5% as well. Among base metals, copper prices on the London Metal Exchange rose to a more than one-month high, while aluminium eased from its four-year high. The three-month copper contract on LME was last at $13,293 per ton, up 1.8%, while the aluminium contract was 1.5% lower at $3,574.15 per ton. Oil plungesOil prices declined on Tuesday due to easing of supply concerns—which had been fueled by the Strait of Hormuz blockade—following indications of a potential renewal of negotiations aimed at ending the US-Israeli conflict with Iran.At the time of writing, the price of WTI was at $93.38 a barrel, down 5.8%, while Brent was 3.3% lower at $96.01 a barrel. Following the US military's initiation of a blockade on Iranian ports, both benchmarks saw a significant rise in the prior session, with Brent crude increasing by over 4% and WTI climbing nearly 3%.Despite discussions about a potential restart of US-Iran negotiations putting downward pressure on oil prices, this decline overlooks the reality of physical oil barrels not being transported, according to Tamas Varga, an analyst at PVM Oil Associates.The International Energy Agency (IEA) reported in its monthly findings that attacks on energy infrastructure in the Middle East, coupled with Iran's effective shutdown of the Strait of Hormuz, have resulted in the largest oil supply disruption in history. In March alone, this led to a loss of 10.1 million barrels per day."Resuming flows through the Strait of Hormuz remains the single most important variable in easing the pressure on energy supplies, prices and the global economy," the ​IEA said.The IEA has significantly revised its projections for global oil supply and demand growth. Demand is now anticipated to decrease by 80,000 barrels per day in 2026, while the expected decline in supply is much sharper, at 1.5 million barrels per day.Meanwhile, negotiating teams from the US and Iran might be returning to Islamabad this week, according to five sources w...

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