The Greenland crisis took a turn on Wednesday as President Trump announced a framework for a “future agreement” with NATO regarding Greenland. He also stated in earlier remarks that he would not use force to seize the island. This news led to a slight increase in crude oil prices, while gold retreated after hitting a record high. London copper prices rose.
Crude Oil: Prices Edge Up as Market Ponders Trump's “Framework” for Greenland Deal
Crude oil edged higher on Wednesday as traders assessed U.S. President Trump's claim that the U.S. had reached a “framework” agreement on Greenland.
WTI crude rose less than 1%, closing below $61 per barrel, tracking gains in equities and the dollar. Trump indicated he would not implement previously threatened tariffs against European nations opposing his acquisition of Greenland.
Additionally, renewed investor concerns over potential U.S. military action against Iran added extra geopolitical risk premiums to oil prices. Trump continues pressuring aides to present “decisive” military options regarding Iran.
Frank Monkam, head of macro trading at Buffalo Bayou Commodities, noted the oil market's reaction appeared relatively muted. “Today's price action is essentially range-bound with an upward bias,” he said. “Investors will buy dips until the Iran situation becomes clearer. For now, Iran has taken a backseat to Greenland/Davos as the main narrative.”
The International Energy Agency raised its forecast for global oil demand growth through 2026 and slightly reduced its projected supply surplus, also helping to support the market. However, these projections still indicate the oil market will face a significant supply glut.
Severe cold weather in the United States is also driving energy prices higher across the board. Diesel futures closed up 4% after natural gas prices surged sharply.
March WTI crude rose 0.4% in New York to settle at $60.62 per barrel.
March Brent crude gained 0.5% to settle at $65.24 per barrel.
Precious Metals: Easing Greenland Tensions Cool Gold Rally
Easing tensions over Greenland cooled gold's record-breaking rally, while silver prices declined.
President Trump announced on social media Wednesday that a framework agreement had been reached with NATO regarding Greenland's future, thereby averting his earlier threatened tariffs on several European nations. This followed his remarks at Davos that the U.S. would not use force to acquire Greenland.
Gold gave up earlier gains following these developments, having earlier hit a record high of $4,888.42 per ounce.
Additionally, U.S. Supreme Court justices signaled caution regarding President Trump's dismissal of Federal Reserve Governor Lisa Cook over unsubstantiated mortgage fraud allegations. This helped ease investor concerns about the Fed's interest rate decisions.
At 3:23 p.m. New York time, spot gold rose 0.6% to $4,790.13 per ounce; spot silver fell 3.3%; platinum briefly surged past $2,530 per ounce for the first time but later erased all gains, turning down 0.9%.
Base Metals: Copper Prices Rise
Copper prices climbed in London as Goldman Sachs Group predicted the sustained inflow of copper into the U.S. market would continue, serving as a key driver for the price rally.
At London market close:
LME copper futures rose 0.4% to $12,810 per tonne;
LME aluminum futures gained 0.2% to $3,115 per tonne;
LME nickel futures rose 2.2% to $17,996 per ton;
LME zinc futures rose 0.1% to $3,175.5 per ton;
LME tin futures rose 4.1% to $51,417 per ton;
LME lead futures fell 0.3% to $2,022 per ton.
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