Commodity wrap: Oil slips below $100 as gold, copper surge on US-Iran truce

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Oil prices tumbled below $100 per barrel on Wednesday after the US and Iran agreed to a two-week ceasefire, which is also likely to reopen the Strait of Hormuz. Both Brent and West Texas Intermediate crude oil benchmarks fell more than 17%, following the announcement. Meanwhile, gold prices on COMEX climbed to a near three-week high as softer energy prices and a weaker dollar boosted sentiment. Silver also jumped more than 7% at the time of writing. Copper is among the best-performing metals on Wednesday, a likely turnaround given underwhelming performance since the war broke out between the US and Iran.Oil plunges below $100Markets reacted with predictable relief following the agreement of a two-week ceasefire between the US and Iran, reached just before the ultimatum deadline. Negotiations are scheduled to continue during this period, and the Strait of Hormuz is anticipated to reopen. As a result of the agreement, Brent crude oil prices dropped immediately by $15.“However, at around USD 95 per barrel, prices remain significantly higher than before the outbreak of the war,” Thu Lan Nguyen, head of FX and commodity research at Commerzbank AG, said in a report. This appears justified given the ongoing uncertainty about whether the ceasefire will be fully honored. Thu Lan Nguyen added.The 10-point plan put forth by the Iranian leadership, which serves as the foundation for the upcoming peace negotiations, contains demands that the US will likely reject. These demands include the complete removal of all sanctions, the pullout of US military forces from the Middle East, and Iran's continued authority over the Strait of Hormuz.The restoration of maritime traffic through the Strait of Hormuz faces uncertainty. International Energy Agency Chief Fatih Birol emphasised that the extensive damage to the region's energy infrastructure precludes a swift return to normal supply, noting that around 75 energy assets suffered "severely or very severely" damaged.The estimated reconstruction costs are approximately $25 billion, largely due to significant damage to gas infrastructure and refineries, according to Rystad Energy.The Brent contract was last at $92.61 per barrel, down 15.3%, while WTI was 16.9% lower at $93.85 a barrel. Gold climbs back above $4,800The 14-day ceasefire in the Middle East (as noted previously) prompted a significant market reaction, with the price...

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