Oil and copper rally as inflation pressures shake markets - 12 May 2026

As of May 12, today's features economic pressures stemming from geopolitical tensions and inflation concerns, alongside developments in leadership and market dynamics. Prime Minister Keir Starmer defied calls to resign today, telling ministers he would "get on with governing" despite a "destabilising" 48 hours of growing calls to set out a timetable for his departure after a drubbing in local elections. Meanwhile, a selloff in high-flying chipmakers drove stocks lower, which also dropped alongside bonds after key inflation data showed the impacts of energy disruptions stemming from the war in Iran, Bloomberg reported. Turning to market updates, copper prices have reached a notable three-month high of 14,023.50 dollars per metric ton amid bullish buying from funds, driven by supply issues and strong forecasts linked to AI data center needs. This price surge occurred despite deteriorating sentiments about a potential peace settlement regarding the ongoing conflict in Iran, with U.S. President Donald Trump characterizing the ceasefire as "on life support." Market analysts noted that the demand for copper is being buoyed by expectations of increased imports from China in the coming quarters. In broader economic scenarios, U.S. consumer inflation is projected to have escalated further in April, largely impacted by rising energy prices owing to the Iran conflict. The anticipated Consumer Price Index figures suggest an increase in consumer prices, which would likely reinforce the Federal Reserve's stance to maintain current interest rates, keeping them steady through to 2027. The situation has raised concerns about persistent inflation pressures, particularly as energy costs continue to climb, complicating the economic landscape for consumers already facing stagnant wage growth. World news highlights increasing oil prices as U.S.-Iran tensions continue to simmer. The ongoing standoff has overshadowed any progress towards peace, with Trump expressing frustration over Iran's latest demands in negotiations. The geopolitical climate is raising alarm among policymakers regarding supply chain stability and energy costs globally. Lastly, in the energy sector, Eni is exploring potential deals involving its floating liquefied natural gas assets, seeking investments from major funds such as Apollo and KKR. This initiative aims to generate significant capital, potentially over one billion euros, to facilitate further projects while navigating the disrupted LNG supply landscape intensified by the Iran war.