Commodities: WTI futures jump on risk of new Iran sanctions, soybeans gain on China deal
Commodities clocked in with solid gains at the start of the week, despite strength in the US dollar, amid the risk of historic sanctions against Tehran.
Helping sentiment across the complex, at the weekend US Secretary of the Treasury, Steve Mnuchin, said the Trump administration had decided to put the trade war 'on hold' to give time for the implementation of a new framework agreement between the two economic giants.
Indeed, according to Chinese officials, Beijing had agreed to ramp-up its purchases of US goods by an undisclosed amount.
That saw almost across-the-board gains in base metals, albeit amidst low trading volumes, according to traders.
For its part, three-month LME copper futures rose from $6,842 per metric tonne at the session open, finishing at $6,879.
It also led to a good bid for agricultural futures, especially for soybeans, with the July 2018 CBoT contract tacking on 2.68$ to $10.2525 per pound.
Wheat and cocoa futures were the exceptions, following strong gains during the previous session.
In the background, Bloomberg's commodity index was rising by 0.62% to 90.97 points, even as the US dollar spot index edged up by 0.06% to 93.689.
Energy futures weakened over the course of the first half of the session, as the US dollar advanced on the back of the China agreement.
However, in an afternoon speech the new American Secretary of State, Mike Pompeo, vowed to impose historic sanctions on Iran if it did not stop its development of nuclear-capable ballistic missile technology, withdraw forces under its direct command from Syria and its support for Hamas, Hezbollah, Palestinian Islamic Jihad and for Houthi rebels in Yemen.
Against that backdrop, West Texas Intermediate crude oil futures for next month delivery gained 1.52% to close at $72.36 a barrel on NYMEX.
According to the latest Baker Hughes survey data, the US rig count was unchanged at 844 during the week ending on 18 May.
To take note, crude oil futures were also impacted throughout the session by Venezuelan presidential incumbent Nicolas Maduro's victory on Sunday, which it was believed would lead to a continued erosion in the country's oil export capacity.