Energy: Escalation or de-escalation? This is the question on the market after Israel's "measured" response to Iran on October 26. Financiers initially opted for an easing of friction between the two regional forces, as the Hebrew state voluntarily spared Iran's oil infrastructure. This helped to reduce concerns about potential oil supply disruptions, bringing strong pressure to bear on prices early last week. Prices therefore fell last week, but have since recovered due to three key factors. Firstly, OPEC+ postponed its production increase by one month, to the end of December, which is supporting prices. Secondly, U.S. oil inventories recorded a surprise drop last week (-0.5 million barrels versus a consensus of +1.5 million). Last but not least, the Iran/Israel chapter is far from over, as Iran could in turn launch retaliatory attacks against Israel. In terms of prices, crude prices are starting the week higher, with Brent and WTI trading at 74.40 and 70.70 USD respectively.
Metals: The trend in industrial metals is calm, as traders are torn between rising risk aversion ahead of the US presidential election, and good economic data from China, which confirms a slight recovery in its industry. A tonne of copper is treading water at USD 9500 (spot price). As for gold, it remains well positioned at USD 2740.
Agricultural products: Cocoa prices are still a roller-coaster ride of thrills and spills. You need to have a strong heart to follow its fluctuations: after giving up 9% two weeks ago, its price recovered 10% last week.
