Energy: Crude prices have fallen back. This results from price normalization following the announcement of an agreement in principle between the US and Iran. This morning Brent is trading at around $83 per barrel, down 12% for the week and 20% over the past month. WTI is trading at around $81. The agreement provides for the lifting of the American blockade on Iranian ports and the upcoming reopening of the Strait of Hormuz, a strategic maritime route for nearly 20% of global oil flows. However, the details of the commitments are yet to be confirmed, particularly regarding the Iranian nuclear program, which will be the subject of later discussions. The protocol will be officially signed in Switzerland on Friday , after weeks of negotiations mediated by Pakistan.
Metals: Gold, which came close to the symbolic $4000 threshold last week, is recovering vigorously thanks to the Iran-US agreement. The "barbaric relic" serves as something of an antithesis to oil: the more energy prices rise, the more inflation expectations are anchored to the upside, which fuels expectations that the Fed and the ECB will maintain high interest rates, a context that is highly unfavorable for gold, which, of course, pays no yield. In this environment, the decline in oil prices is a boon for gold, which rose to $4310 per ounce this morning. Last week, copper continued its decline, hitting $13,380 per ton on the LME, its lowest level in three weeks. This movement is due to increased tensions in the Middle East and the prospect of a global economic slowdown, which exacerbates concerns around copper demand. It should be noted that stocks continue to melt away in LME warehouses, reflecting a tightening of supply.
Agricultural Products: Soybeans fell in Chicago to 1110 cents per bushel, weighed on by beneficial rains in the American Midwest, which are supporting crop growth, as well as a decline in crude oil prices impacting soybean oil used in biodiesel. Corn remained relatively stable at 410 cents, despite improving production outlooks. Indeed, the USDA raised its yield forecasts for Argentina and Brazil. Finally, there is nothing to report regarding wheat, which is trading at around 580 cents per bushel.
