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WTI crude futures jumped more than 2% toward $118 per barrel on Tuesday, hitting its highest since March 9, after EU leaders reached an agreement to ban 90% of Russian crude by the end of 2022, fueling concerns of an even tighter global market. The agreement resolves a deadlock with Hungary over the bloc’s toughest sanction yet on Moscow and would clear the way for other elements of a sixth package, including cutting Russia’s biggest bank from the SWIFT messaging system. However, some analysts suggested that oil price gains may be muted as the move has already been priced in by the markets. Meanwhile, demand from China is expected to pick up after the cities of Beijing and Shanghai eased Covid restrictions, with some reservations about the effect of skyrocketing petrol prices on global consumption. On the production side, OPEC+ is set to stick to its policy of modest output increases at its meeting on Thursday, rejecting western calls for faster production to lower prices.

Gold was around $1,860 an ounce on Monday, inching toward its highest level in three weeks, benefiting from recent weakness in the dollar. The dollar fell to one-month lows against a basket of major currencies as traders lowered Federal Reserve rate hike expectations amid signs the central bank might slow or even pause its tightening cycle later this year. Minutes of the last FOMC meeting showed that most participants believed that 50 basis point rate hikes would be appropriate at each of the next two meetings in June and July to get on top of inflation. However, many officials thought big, early hikes would allow room to pause later in the year to assess the effects of that policy tightening, while carefully watching the evolving economic outlook.

Silver futures were changing hands around the $22-per-ounce mark, a level not seen in almost two weeks, as a weaker dollar helped the metal regain momentum. On top of that, the precious metal has been benefiting from safe-haven demand stemming from persistent geopolitical tensions and lingering concerns about slowing global growth. Still, the white metal remains about 20% below its March peak amid bets of aggressive tightening by the Federal Reserve. The US Central Bank has raised its benchmark policy rate by half a percentage point for the first time since 2000 in early May while signaling it intended to increase it by the same amount at the next two meetings.

Steel decreased to a 19-week low of 4581 CNY/T, amid persistent concerns about weak demand in top consumer China. Investors have grown concerned that the world's second-largest economy could shrink in the second quarter as consumption and industrial production declined sharply in April due to widening COVID-19 lockdowns. Putting a floor under prices was recurring government pledges more stimulus to support the economy. President Xi Jinping said that China would adopt a package of policies to help pandemic-hit industries, stepping up infrastructure construction and back healthy property market development.

Prices for iron ore cargoes with a 63.5% iron content for delivery into Tianjin rallied to an almost three-week peak of around $135-per-tonne on worries over supply shortages and better demand prospects in the metals market due to pledges for more stimulus in top consumer China. Supply from top exporters Australia and Brazil appear to be below potential, while India raised export duties for iron ore and steel intermediates to rein in broadening inflationary pressures. On the flip side were persistent worries that slowing global growth will hit metals demand and limit the metal's upside momentum.

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