[MARKET ANALYSIS] Crude remains subdued but as US-Iran negotiations struggle for progress; gold firms as yields ease

WTI Nov and Brent Dec futures remain subdued after yesterday’s pronounced downside, with conflicting US-Iran developments providing little impetus for a sustained recovery (see details below). Crude also remains pressured by yesterday’s bearish supply headline which suggested the US offering up to 40mln bbls from the SPR, while private inventories showed a surprise 1mln bbl build (vs exp. 1.1mln draw). Modest upside was seen in the complex during this morning after reports of a potential hijacking involving a Dubai-Tel Aviv flight, although the move faded as subsequent reports suggested the incident was not security-related. WTI trades towards the lower end of a USD 88.58-89.99/bbl range, while Brent sits around the middle of a USD 95.12-96.86/bbl range. Dutch TTF is choppy, with Germany ordering the procurement and storage of 8 TWh of natural gas by 15th December as Europe continues efforts to bolster inventories ahead of winter. TTF now trades towards the middle of a EUR 67.88-70.78/MWh range. Precious metals are mixed, with gold firmer as global yields ease following yesterday’s sharp steepening, while participants await US PCE later today. Spot gold eclipsed USD 4,200/oz to notch a current range between USD 4,166-4,201/oz, recovering further from Monday’s sharp sell-off. Spot silver is slightly softer and trades around the middle of a USD 60.84-61.72/oz range. Base metals are firmer following Chinese PMI data, with the official Manufacturing PMI returning to expansion at 50.1 and Non-Manufacturing rising to 50.2, while RatingDog Manufacturing and Services also topped expectations. Note, China heads for week-long National Day holiday from tomorrow. 3M LME copper trades towards the top end of a USD 14,458.70-14,550.88/t range. In terms of notable geopolitics, Iran received Washington’s response to its seven-point proposal via Qatari mediators, with reports suggesting the main disagreement centres on the sequencing of the proposed seven-day framework rather than its components. However, Axios reported that talks and mediation efforts this week have yielded little progress, raising the risk of renewed hostilities, while Iran maintains that the Hormuz issue and US blockade must be resolved before nuclear negotiations.