Crude Oil Soars: 5 Big Wins, Metals Fall Fast

Crude oil hits new high in nearly five months, reflecting renewed investor confidence and global demand recovery. Meanwhile, Shanghai Futures Exchange (SHFE) metals showed mixed trends. Zinc fell over 1%, gold surged again past 800 yuan, and most base metals trended downward. This update provides an insightful overview of the day’s commodity market shifts, based on SMM’s daily review.

The recent spike in oil prices is driven by geopolitical tensions, OPEC+ production cuts, and a rebound in summer travel demand. This surge is reshaping the outlook for commodities in both energy and metal sectors.

Crude Oil Prices Surge to Five-Month High

On Thursday, international benchmark Brent crude and U.S. West Texas Intermediate (WTI) rose significantly. Brent crude climbed past $83 per barrel, a level not seen since early this year. WTI followed closely, trading above $79 per barrel. According to analysts, multiple factors have pushed crude oil to hit a new high, including:

• Tighter supply policies by OPEC+
• Escalating tensions in the Middle East
• Rising travel and transportation demand

These developments have encouraged investors to pour back into energy commodities, triggering bullish sentiment across global markets.

Metals Market Shows Weakness

While crude oil gained ground, base and precious metals underperformed. Investors shifted focus from metals to energy amid stronger oil market momentum.

Zinc Drops Over 1% on SHFE

SHFE zinc prices dropped over 1% during the day, making it one of the largest losers among industrial metals. The weakness is largely attributed to:

• Oversupply in the domestic market
• Weak downstream demand from the construction sector
• A slowdown in manufacturing activity in key Chinese provinces

SMM reported that zinc inventories in bonded warehouses remained elevated, adding pressure to prices.

Copper and Aluminum Under Pressure

Copper remained steady in early trade but later slipped due to soft demand signals and lack of major restocking. Aluminum also edged lower, as global supply chains appeared more stable and demand expectations were adjusted downward.

Gold Regains Strength, Rises Above 800 Yuan Again

SHFE gold stood out among the metals, reclaiming strength and rising above 800 yuan per gram. The rise in gold prices indicates a renewed interest in safe-haven assets amid market volatility.

Factors supporting gold’s gains include:

• Uncertainty in equity markets
• Currency fluctuations and a weaker yuan
• Cautious investor sentiment due to inflation fears

With gold traditionally viewed as a protection against inflation and political uncertainty, many investors are shifting toward precious metals even as base metals decline.

SMM Daily Review Summary

The SMM Daily Review captures the key highlights of the commodity markets:

Commodity	Price Movement	Key Driver
Crude Oil	📈 5-month high	OPEC+ cuts, global demand recovery
SHFE Zinc	📉 Down 1%+	Oversupply, weak construction demand
SHFE Copper	📉 Slight decline	Cautious demand outlook
SHFE Aluminum	📉 Lower	Stabilizing supply chain
SHFE Gold	📈 Above 800 yuan	Safe-haven buying amid uncertainty

This snapshot paints a clear picture: Crude oil hits new high, while metals, especially industrial ones, struggle to hold ground.

What This Means for Investors

The divergence between energy and metals markets may influence investment strategies. Here’s what traders and investors need to consider:

1. Crude Oil’s Upward Momentum
   With oil prices rising, energy stocks and ETFs may outperform in the short term. Investors should monitor supply disruptions and geopolitical developments closely.
2. Zinc and Base Metals Weakness
   The decline in zinc and related industrial metals could signal weakening construction and manufacturing demand in China. This might weigh on mining stocks and metal-based funds.
3. Gold’s Resilience
   Gold is proving its worth as a hedge again. For those looking to minimize risk, increasing exposure to precious metals may be beneficial.

Analyst Commentary

Market analysts say the crude oil rally is “supported by real fundamentals,” with OPEC+ remaining firm on cuts and demand rebounding post-COVID. However, concerns remain about how sustainable this oil rally is if economic growth slows in China or Europe.

For metals, the overall trend remains cautious. Many believe the current decline in zinc is not yet bottomed out, especially with high inventories and sluggish demand.

Conclusion: Energy Leads, Metals Lag

The crude oil hits new high phenomenon is dominating today’s market narrative, with metals generally facing headwinds. As investors adjust to changing demand cycles and global trade dynamics, energy commodities like crude oil may continue to shine, while industrial metals wait for clearer recovery signals.

Stay tuned for tomorrow’s SMM update, which will offer more in-depth insights and pricing data as global markets continue to shift.

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