[MARKET ANALYSIS] Crude surges despite a lack of obvious drivers but as US-Iran talks stall; metals mostly lower as higher energy lifts yields

WTI Nov and Brent Dec futures have reversed overnight losses and are sharply firmer as the European morning progresses, with the complex supported by the continued lack of progress in US-Iran negotiations (see below for details) and despite any obvious news flow to explain the gains. WTI has rallied from a USD 88.79/bbl low to a USD 92.87/bbl high, while Brent has surged from USD 96.55/bbl to briefly top USD 100/bbl, printing a USD 100.72/bbl high. There was also focus on diesel after the US reportedly told France and Germany to release emergency stocks or face a possible US export ban. Dutch TTF is firmer alongside the broader energy complex, with ongoing Middle Eastern uncertainty keeping supply risks on traders’ minds. Syria also reported that three power plants remain out of service following a gas pipeline explosion. TTF has risen from a EUR 71.22/MWh low to a EUR 74.25/MWh high. Precious metals are flat/mixed as the rise in crude pushes global yields higher, limiting the benefit from lingering geopolitical uncertainty. Spot gold is little changed overall in a USD 4,139/oz low to a USD 4,193/oz high, while spot silver is modestly firmer within a USD 59.97-61.43/oz range. Base metals are softer, with the complex pressured by higher energy prices and yields, while mainland China remains closed for the National Day holiday. 3M LME copper is down almost 1.5% within a USD 14,231-14,491/t range, while COMEX copper is similarly lower. In geopolitics, Trump said developments regarding Iran will happen “very soon” and that the war could end soon, while a White House official said a deal remains possible. However, negotiations have stalled, with US Secretary of State Rubio reportedly demanding Iran’s UN delegation leave the US, while Iranian officials said they received Washington’s response to their latest proposal without disclosing its contents. Further support comes from reports that the Israeli Security Cabinet will discuss the situation “on all fronts” on Sunday following yesterday’s Flydubai incident, which was a suspected terrorist plot, with Israel not ruling out Iran’s involvement.