[MARKET ANALYSIS] Crude rises as US-Iran woes mount, with no off-ramp in sight

In geopolitics, US President Trump said he has a plan on Iran and repeated that Tehran’s proposal is unacceptable. He added that the ceasefire is unbelievably weak and “on life support”, although a diplomatic solution is still possible. Meanwhile, Axios reported Trump met with his national security team to discuss options, including possible renewed military action against Iran. US officials said Trump still wants a deal, but Iran’s refusal to make major nuclear concessions has put the military option back on the table. Two US officials said Trump is leaning toward some form of military action to increase pressure on Iran. That being said, it was also reported that US officials said Trump is unlikely to authorise military action before returning from China later this week. From an Iranian perspective, Iran reiterated that enrichment is not negotiable and rejected transferring enriched uranium outside the country. An Iranian parliamentary spokesperson said one option in the event of another attack could be 90% uranium enrichment. All in all, US and Iranian officials remain split over Hormuz, uranium enrichment and reparations. Desks suggests that optimism for an imminent deal is fading, although there is some hope that the meeting between Trump and Xi could yield a constructive result on the Iranian front. In reaction, WTI and Brent futures are firmer by 3.1% and 2.6% respectively, with the former towards the upper end of USD 98-101.47/bbl range and the latter just shy of session highs (USD 104.23-107.29/bbl band). Dutch TTF is firmer by some 2.5% above EUR 47/MWh. Spot gold is softer amid the energy-induced rise in the USD, with the bullion hovering on either side of USD 4,700/oz (in a USD 4,686-4,773/oz band) as traders look ahead to US CPI later today, alongside further headlines risk on the US-Iran front, in which a macro update will likely ultimately dictate price action. Base metals are mixed/mostly lower given the cautious risk sentiment and firmer USD. Copper overnight edged higher in choppy trade amid the mixed overnight risk appetite. 3M LME copper currently resides between USD 13,831.70- 13,980.38/t.