Commodity Compass - 7/10 - The Unraveling Ceasefire Boosts Most Commodities this Week

This week delivered a stark reminder that the Hormuz saga is not over. Two days of direct US-Iran clashes mid-week threatened to unravel the ceasefire that markets have been pricing in for the past six weeks. Bloomberg reported Thursday that peace talks are continuing despite the hostilities — a U.S. official confirmed negotiations remain active. Oil steadied by Friday and finished the week higher. But the International Energy Agency added important context to the week's volatility: renewed hostilities, the agency warned, risk undermining efforts to rebuild the depleted global oil inventories that have been draining since the crisis began. Even if a deal eventually gets done, the physical damage to supply buffers is cumulative. Every week without a resolution is a week of inventory destruction the market will eventually have to price back in.