[MARKET ANALYSIS] Crude edges higher amid US-Iran uncertainty; gold remains subdued following Wednesday’s surge in the USD and global yields

WTI Nov and Brent Dec futures are modestly firmer after paring overnight losses, with the complex caught between a lack of progress on US-Iran diplomacy and reports that Washington rejected Tehran’s Hormuz proposal, while Iran said another round of messages and clarifications took place via Qatar. Focus also remains on the potential US diesel export ban, although the White House denied reports that the Trump administration is preparing a 90-day ban. Morgan Stanley warned that such a move, while not its base case, could have significant implications and potentially raise gasoline prices as barred diesel exports fill storage and force refiners to cut runs. The bank estimated refiners could need to reduce runs by around 2mln BPD, in turn cutting gasoline supply by roughly 650k BPD. Note: Some modest upticks were seen in the crude complex after an IRGC official noted that the “war could expand” to the Indian Ocean or Bab el Mandeb Strait if the US decides to go to war again. WTI trades around USD 92.50/bbl within a USD 91.23-92.87/bbl range, while Brent trades above USD 98.00/bbl within a USD 97.09-98.83/bbl range. Dutch TTF is firmer, with the contract trading within a EUR 73.39-75.04/MWh range. The Trump-Xi meeting could provide some impact amid reports of potentially reducing or removing China’s 15% tariff on US LNG. (Full Trump-Xi primer available on the Newsquawk headline feed). Precious metals remain subdued following Wednesday’s surge in the USD and global yields, with hawkish Fed rhetoric and strong US data continuing to weigh on the complex. Spot gold trades towards the bottom of a USD 4,273-4,303/oz range, with the 100 DMA at USD 4,309/oz. Spot silver similarly trades around the lower end of a USD 63.75-64.55/oz range. Base metals are mixed/rangebound against a subdued risk backdrop, with copper also digesting news that BHP suspended operations at its Escondida mine in Chile following an accident. 3M LME copper resides in a USD 14,575.08-14,677.78/t range.