Brent crude finished higher as escalating attacks in the Persian Gulf caused long-term damage to major energy facilities. Industrial metals fell sharply, with aluminum recording its biggest drop since 2022. Gold declined for a seventh consecutive session as Middle East tensions pushed oil prices higher and reduced the likelihood of near-term interest rate cuts by the U.S. Federal Reserve.
Crude Oil: Brent Closes Higher Amid Volatility as Attacks Escalate in the Middle East Brent crude ultimately settled higher after intensified assaults in the Persian Gulf resulted in prolonged damage to key energy infrastructure.
Oil markets experienced heightened volatility on Thursday, with sharp price swings prompting some speculators to exit positions.
Brent crude surged as much as 11% to exceed $119.13 per barrel before relinquishing most of those gains, closing up 1.2% at $108.65. Prices continued to retreat in after-hours trading.
Iranian missile strikes targeted Ras Laffan Industrial City in Qatar, causing significant damage to the world's largest liquefied natural gas plant.
Saad al-Kaabi, CEO of QatarEnergy, told Reuters that two facilities accounting for 17% of the country's LNG export capacity were impaired, with repairs potentially taking three to five years.
Traders noted that extreme price swings suppressed trading activity, leading to lower transaction volumes.
"Oil was on another rollercoaster ride today," said Rebecca Babin, senior energy trader at CIBC Private Wealth Group. "Prices pulled back as signals emerged suggesting a potential de-escalation."
During U.S. trading hours, investors assessed comments from U.S. President Donald Trump and Treasury Secretary Scott Bessant.
When asked about deploying ground troops to the Middle East, Trump stated he would not send forces anywhere; Bessant indicated that the Iranian regime might collapse on its own.
"The latest wave of attacks on energy infrastructure in the Gulf reaffirms the extremely precarious supply outlook in the region," said Florence Schmit, energy strategist at Rabobank.
Base Metals: Aluminum Records Largest Drop Since 2022 Industrial metals declined sharply, with aluminum posting its biggest fall since 2022, as escalating Middle East tensions drove energy prices higher and heightened risks of damage to the global economy.
Copper dropped 2%, erasing its year-to-date gains, while aluminum fell 4.4%. Increased attacks in the Persian Gulf threatened the long-term security of critical energy facilities, pushing European natural gas and Brent crude prices upward.
"Today's price action appears largely driven by risk-off sentiment and macroeconomic growth concerns, leading to broad selling across base and precious metals," said Jason Ying, commodities strategist at BNP Paribas.
At the close, LME copper was down 2% at $12,146.50 per metric ton. LME aluminum fell 4.4% to $3,252 per metric ton. LME nickel declined 1% to $16,984 per metric ton. LME zinc dropped 2% to $3,071.50 per metric ton. LME tin decreased 3.4% to $43,540 per metric ton. LME lead fell 1.4% to $1,887.50 per metric ton.
Precious Metals: Gold Declines for Seventh Straight Session Gold fell for a seventh consecutive trading day as Middle East tensions boosted oil prices and diminished expectations of near-term U.S. interest rate cuts.
Gold dropped as much as 6.6% during the session before paring losses, potentially marking its longest losing streak since 2023. With the Iran conflict nearing its third week, surging oil and natural gas prices have heightened inflation risks, reducing the likelihood of rate cuts by the Fed and other central banks. This creates headwinds for gold, which offers no yield. Silver plunged more than 13% at one point before trimming its decline.
"This is a combination of interest rates and oil prices at play," said Bart Melek, global head of commodity strategy at TD Securities. "There are concerns about slowing growth alongside persistent inflation, which may lead the Fed and other central banks to maintain tighter policies."
As the Iran conflict intensified and energy prices surged, global stock and bond markets saw sell-offs earlier on Thursday. Melek noted this forced some investors to liquidate precious metal positions to raise cash.
As of 5 p.m. New York time, spot gold was down 3.5% at $4,650.02 per ounce. Spot silver declined 3.4% to $72.8251 per ounce.
