Crude oil is dragged down by renewed focus on market fundamentals as Israel-Iran played down risks of escalation of hostilities in the Middle East after Israel's apparently small strike on Iran.
Brent futures fell to $86.50 a barrel. US WTI crude June contract drops to $81.50 a barrel. Both benchmarks spiked over $3/barrel early on Friday, after explosions were heard in Iranian city of Isfahan Gains were capped after Tehran played down the incident and said it did not plan to retaliate. Chicago Federal Reserve President Austan Goolsbee on Friday became the latest central banker to signal a longer timeline for interest rate cuts because progress on inflation had "stalled". US House of Representatives passed an aid package for Ukraine and Israel containing measures that would let federal government expand sanctions against Iran and its oil production.
ANZ analysts said in a note that volatility in the Middle East will keep oil markets "jittery".

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Nickel prices climbed to multi-month highs on Monday, as market talks of China government's plans to buy the metal for state stockpiles triggered concerns of tight supply Bullish sentiment across the base metals universe supports too. Nickel on the London Metal Exchange surged past $19,000 per ton, hitting its highest level in 7 months. The contract rose 8.5% last week. Nickel contract on Shanghai Futures Exchange jumped 6% to 147,660 yuan/ton, highest level since last October. Ban on metals from Russia by Washington and London also raised concerns of global supply disruptions. China state-backed research house Antaike expects the outlook for metals including copper, gold and aluminium to remain strong on robust Chinese demand outlook and macro uncertainties.

Gold prices edged lower on Monday as higher US Treasury yields weighed on dollar-priced bullion Investors kept a close watch on any potential escalation in the Middle East conflict.
US gold futures sheds more than $30 to $2,380 per ounce. Benchmark 10-year U.S. Treasury yields edged up to 4.65%, making non-yielding bullion less attractive for investors. Persistent inflation and higher-for-longer interest rates were cited as key risks to financial stability in the Federal Reserve's latest survey of US central bank contacts.Progress on bringing down inflation has "stalled" this year, Chicago Fed President Austan Goolsbee said, becoming the latest US central banker to drop earlier focus on coming need for interest rate cuts.