Crude Outpaces Bitcoin and Gold Before Fed's Decision

Monday saw crude oil advance while precious metals and cryptocurrencies declined. Global markets are diverging ahead of the Federal Reserve's Wednesday rate decision.

Brent crude added 2.75% to $107.48, while West Texas Intermediate gained 2.51% to $102.56. Bitcoin (BTC), gold, silver, and copper all moved lower.

Supply Disruption Boosts Oil Ahead of Fed Meeting

Late last week, Saudi Arabia closed its East-West pipeline after drones launched from Iraq damaged it. The route allows the kingdom to export oil without transiting the Strait of Hormuz.

Reuters reported that the outage threatens up to 4% of global oil supply. Fresh Houthi attacks on Saudi territory and an assault on a vessel in Hormuz deepened the crunch.

On Friday, Yemen's Houthis also reached Perim Island, tightening their grip on Bab el-Mandeb. That corridor carries 4% to 5% of the global supply.

Crude oil rose 8% over the week, crossing above $100 for the first time since July. The move extends a rally that began in July.

"Looking ahead, unless this week’s talks in Oman produce something operationnal … the risk is that crude oil continues to extend its gains toward the $119.48 high of early March." Tony Sycamore, market analyst at IG, in a Sunday note. 

Gulf states and Iran had planned to meet in Oman on Monday. Omani Foreign Minister Badr Albusaidi said the meeting was postponed.

Tightening Expectations Pressure Crypto and Metals

Stronger-than-expected US inflation data hardened the case for monetary tightening. Traders now price an 86.3% chance the Federal Reserve raises its target to 375-400 basis points. That was up from 59.4% a week ago and 33.9% a month ago.

Cryptocurrencies were hit. Total market capitalization fell 4.32% to $2.62 trillion in 24 hours. Bitcoin traded near $76,718 after a 4.4% weekly slide. Ethereum slipped 1.79% to $2,478.43.

Metals offered no shelter. Gold eased 0.22% to $4,340.58, silver lost 0.25% to $64.11, and copper dropped 1.08% to $6.40. These moves echo last week's selloff in gold and crypto.

Crude now trades on supply headlines, while crypto and metals trade on the Fed. Wednesday's decision will show whether these two forces stay apart.