Oil prices dipped slightly on Wednesday in choppy trading, with traders weighing diplomatic progress toward resuming shipping through the Strait of Hormuz against fresh risks to global supply. Copper fell for the first time this week, pulling back from record closing highs as the dollar strengthened and a squeeze in the copper market eased. Gold retreated from three-month highs as investor attention shifted to the Federal Reserve's future rate path.
Crude Oil: Prices Slip as Traders Assess Middle East and Russia-Ukraine Conflict
Oil prices slipped slightly on Wednesday in choppy trading, with traders weighing diplomatic progress toward resuming shipping through the Strait of Hormuz against fresh risks to global supply. Brent crude fluctuated between gains and losses before settling below $88 per barrel, while WTI crude saw little change, hovering around $82 per barrel.
Oman and Iran are pushing for a broader agreement on managing the Strait of Hormuz. Iranian military officials said the two sides have reached a revenue-sharing deal for the crucial waterway; however, Tehran has repeatedly stated that an agreement on navigation does not mean the strait will reopen immediately.
Reports that Russian President Vladimir Putin is planning to escalate military operations in Ukraine, having concluded that peace talks have hit a dead end, pushed oil prices higher during the session. Recent Ukrainian strikes on refineries and ports have tightened fuel markets and prevented Moscow from redirecting crude for export, further constraining a market already disrupted by the war with Iran. Diesel has been hit particularly hard, with New York diesel futures closing higher and prices up more than double this year. Meanwhile, data showed U.S. domestic diesel supplies have fallen to the lowest level on record for this time of year.
However, crude still appears to be flowing out of the Persian Gulf. U.S. President Donald Trump claimed that 10 million barrels of oil moved through the Strait of Hormuz on Tuesday, reinforcing hopes that shipping through the waterway may be increasing after months of disruption. Satellite imagery also appears to show Saudi Arabia's oil loadings in the Persian Gulf rising, indicating the kingdom is seeking alternative routes to export crude amid threats from Yemen's Houthi rebels to its Red Sea shipments.
October Brent crude futures fell 0.8% to settle at $87.84 per barrel, while October WTI crude declined 0.1% to close at $82.23 per barrel.
Base Metals: Copper Declines for First Time This Week
Copper fell for the first time this week, pulling back from record closing highs, as the dollar strengthened and a squeeze in the copper market eased. Copper settled down 0.7%, giving up an intraday gain of 0.6%. Prices are up about 15% this year, with traders continuously shipping large volumes of copper to the United States, depleting inventories in other regions while mine supply remains under pressure.
The dollar extended its gains after a closely watched inflation gauge matched economist expectations. A stronger dollar makes commodities more expensive for buyers using other currencies.
At settlement, LME copper fell 0.7% to $14,253 per metric ton; LME aluminum declined 0.4% to $3,225 per ton; LME nickel dropped 0.9% to $16,887 per ton; LME zinc rose 0.1% to $3,893 per ton; LME tin slid 1.8% to $54,827 per ton; and LME lead gained 0.3% to $1,910.5 per ton.
Precious Metals: Gold Retreats From Three-Month High
Gold pulled back from three-month highs as investors turned their focus to the Federal Reserve's rate trajectory ahead of this week's Jackson Hole global central bank symposium. After data showed U.S. inflation remains well above the Fed's target, gold fell to near $4,600 per ounce. Traders increased bets that the Fed will begin raising rates before year-end, boosting the dollar and pushing Treasury yields modestly higher. Higher interest rates typically diminish the appeal of non-yielding gold.
As of 6:16 p.m. ET, spot gold was down 1.4% at $4,591.07 per ounce, while spot silver fell 0.8% to $68.123 per ounce.