Crude oil prices declined on Thursday as traders balanced profit-taking against concerns over Middle Eastern supply, though they remained on track for a weekly gain. Nickel prices climbed to a three-week high amid uncertainty surrounding mining policy in key producer Indonesia. Gold prices fell, as escalating Middle East tensions revived market expectations that the Federal Reserve may need to raise interest rates to curb inflation.

Oil: Prices Drop as Investor Profit-Taking Caps Gains

Crude oil prices fell on Thursday as traders weighed profit-taking against worries about Middle Eastern oil supplies, though they are still poised for a weekly increase.

The global benchmark Brent settled above $84 a barrel, while the U.S. benchmark West Texas Intermediate settled below $79. Both are up roughly 11% for the week.

The U.S. conducted another strike against Iran on Thursday, following an attack on a tanker near a key Iranian export terminal overnight. Concurrently, reports indicate Tehran has instructed Yemen's Houthi rebels, a key part of its proxy network, to close the Bab el-Mandeb Strait, a chokepoint for Red Sea shipping, if Iran's power infrastructure is targeted by U.S. strikes.

Tehran has repeatedly threatened to shut down the Red Sea passage, a vital artery for Saudi Arabian oil exports, during the conflict. However, the Houthis have not yet taken such action.

"Unless there is a material escalation in the situation, traders are reluctant to push prices significantly higher," said Rebecca Babin, senior energy trader at CIBC Private Wealth Group. "The physical market is not yet signaling a severe shortage."

While visible transits through the Strait of Hormuz have decreased, some shipping appears to continue, with several tankers conducting ship-to-ship transfers off the coast of Oman. According to the Joint Maritime Information Centre, the U.S. assisted 10 vessels through the Strait of Hormuz in the past 48 hours.

Meanwhile, oil loading operations in Iraq are continuing after a tanker was attacked earlier while loading crude there.

August WTI crude fell 0.8% to settle at $78.95 a barrel.

September Brent crude dropped 0.9% to settle at $84.23 a barrel.

Base Metals

Nickel prices rose to a three-week peak, driven by uncertainty over mining policy prospects in Indonesia, a major producer, sparking concerns about future supply.

The battery metal surged as much as 3.1%, leading gains on the London Metal Exchange.

Indonesia accounts for over 60% of global nickel supply. Mining companies were initially scheduled to apply for increased production quotas earlier this month, but the Indonesian government has not yet clarified the relevant process.

At the close, LME three-month copper edged up 0.1% to $13,598.5 a metric ton.

LME aluminum rose 1.1% to $3,185 a ton.

LME nickel advanced 2.1% to $17,152 a ton.

LME zinc gained 1.3% to $3,593.5 a ton.

LME tin increased 0.7% to $53,156 a ton.

LME lead climbed 1.1% to $1,872.5 a ton.

Precious Metals

Gold prices declined as heightened Middle East tensions rekindled market expectations that the Federal Reserve may need to hike rates to combat inflation.

The price of gold fell as much as 2.3%, breaching below $4,000 an ounce, as hostilities escalated between Iran and the United States.

A stronger U.S. dollar and rising Treasury yields pressured the metal. Oil's weekly advance has also intensified inflation concerns.

As of 4:41 p.m. ET, spot gold was down 2.1% at $3,975.29 an ounce.

Spot silver fell 3.9% to $55.524 an ounce.