Crude oil prices continued their ascent on Wednesday. While the International Energy Agency announced a release of 400 million barrels of oil, this was offset by indications from various parties suggesting the conflict is unlikely to conclude swiftly. Gold prices experienced a slight decline, influenced by concerns that the war could fuel inflation. Aluminum prices on the London market continued to find support from supply disruptions in the Middle East.

Crude Oil: Prices Rise as War Rhetoric Outweighs Reserve Release Oil prices advanced amidst significant volatility on Wednesday, as increasingly aggressive rhetoric from global leaders regarding the conflict overshadowed the impact of emergency crude stockpile releases by some wealthy nations. WTI crude futures climbed 4.6%, settling above $87 per barrel. Iran communicated to regional mediators that a ceasefire would require guarantees from the United States against future attacks by either the U.S. or Israel. The unlikelihood of the U.S. accepting these terms further dampened already fading expectations for a rapid resolution to the hostilities. April WTI crude futures increased by 4.6%, settling at $87.25 per barrel. May Brent crude futures rose 4.8%, settling at $91.98 per barrel. Concurrently, the European Union called for the continued enforcement of the price cap on Russian oil, tempering market speculation about a potential near-term increase in the free flow of Russian crude to global markets. These developments limited downward pressure on prices, which followed the IEA's unprecedented announcement of a 400 million barrel oil release, even exceeding the scale of the release after the Russia-Ukraine conflict. Many traders remained wary due to a lack of clarity regarding the U.S. plan for releasing emergency petroleum reserves. "Currently, 15 to 20 million barrels per day of Persian Gulf supply are offline. The buffer provided by this plan could last about one month," stated Raymond James analyst Pavel Molchanov. "It's a good start, but further releases may be necessary if the conflict persists beyond March."

Precious Metals: Gold Records Minor Decline Gold prices edged lower on Wednesday. Following the release of February U.S. inflation data, which did little to alleviate concerns that the conflict would exacerbate price pressures, the U.S. dollar and Treasury yields moved higher, weighing on gold. Gold remained below $5,200 per ounce. Data from the U.S. Bureau of Labor Statistics showed a slowdown in core inflation for February, prior to the outbreak of the conflict. However, stronger inflation fears stemming from war-driven energy price increases bolstered the dollar and reduced the appeal of precious metals. "The market's focus remains squarely on the conflict and its implications for future inflation data; in the face of an ongoing oil shock, today's report is retrospective, so the market is choosing to look past it," said Daniel Ghali, Senior Commodity Strategist at TD Securities. U.S. Treasury prices also declined, leading traders to anticipate only one interest rate cut from the Federal Reserve this year. Higher borrowing costs are typically unfavorable for non-yielding assets like gold. As of 3:24 PM New York time, spot gold was down 0.3% at $5,174.60 per ounce. Silver fell 3.1% to $85.5827 per ounce; palladium and platinum also traded lower.

Base Metals: Middle East Supply Disruptions Continue to Lift Aluminum Aluminum prices rose on Wednesday, driven by supply disruptions linked to the conflict. Three-month futures on the London Metal Exchange advanced, closing at their highest level since April 2022. Informed sources revealed that Rio Tinto Group proposed supplying aluminum to Japanese buyers for second-quarter shipments at a premium of $350 per tonne. If agreed, this would mark the highest premium level since 2015. At the close of London trading: LME copper fell 0.8% to $13,042 per tonne. LME aluminum rose 1.5% to $3,457 per tonne. LME nickel increased 1.2% to $17,693 per tonne. LME zinc declined 1.1% to $3,309 per tonne. LME tin dropped 1.6% to $49,647 per tonne. LME lead edged down 0.4% to $1,936 per tonne.