Brent crude fell back from $110 as Trump's Russia waiver promised more fuel — while gold pushed toward $4,200

Brent crude fell sharply in Monday's early trading, giving up the five-month high it touched on Friday. Futures were down $1.94, or 1.77 per cent, to $107.92 a barrel by 0227 GMT, according to Reuters' market reporting. U.S. benchmark West Texas Intermediate fell 83 cents to $100.58 — still its strongest level since mid-September.

The trigger was political. On Friday night, U.S. President Donald Trump signed an executive order waiving key sanctions and tariffs on Russia under the Graham Act — just two days before the measures were due to take effect. The order followed Trump's announcement of a deal to buy Russian diesel, starting at about 2.3 million barrels this month and rising to roughly 7.6 million barrels monthly, for distribution in the U.S. and other markets. Secretary of State Marco Rubio said the administration would use up to 60 days to assess the economic impact of the sanctions relief.

Markets are pricing in the prospect of more fuel reaching global markets. But the supply relief is conditional. "The combination of a softer tone around sanctions and some profit-taking after recent gains is helping to cap the upside in the near term," KCM Trade chief analyst Tim Waterer said — adding that "until the details and duration are clearer, the market is unlikely to fully price in a sustained increase in supply."

The pullback does not mean the energy shock is over. Brent touched $110 on Friday for the first time since May after a week of attacks on commercial vessels in the Middle East. Analytics firm Kpler reported at least 10 confirmed vessel incidents last week, with Gulf crude flows collapsing to about 8.5 million barrels a day on a seven-day average — down from more than 20 million the week before. Egypt said it stands ready to support Saudi Arabia against Yemen's Houthis, raising the prospect of a wider confrontation around the shipping lanes.

DBS Bank's head of energy research, Suvro Sarkar, told Reuters he expects prices to stay rangebound between $100 and $110 a barrel going into the U.S. midterms — calling Trump's moves "short-term fixes" that "will have barely any structural impact on the supply situation."

While oil retreated, gold kept climbing. Spot gold gained 0.3 per cent to $4,175.60 an ounce by 0259 GMT, with December U.S. futures up 0.4 per cent to $4,196.40 — edging toward $4,200, according to Invezz's market reporting. The logic runs through interest rates: cheaper fuel could cool inflation expectations and take pressure off further U.S. rate hikes, lowering the opportunity cost of holding gold — a benefit that may outweigh any dip in safe-haven demand. Gold ETFs drew $10 billion in September even as futures investors cut exposure.

For Canadians, the split-screen matters at the pump and at the central bank. Pump prices tend to follow crude with a lag, so Monday's pullback offers only partial relief after Friday's spike. And the Bank of Canada heads into its Oct. 28 decision in the bind governor Tiff Macklem described over the weekend: the bank has been "looking through" higher energy prices, "but the longer this goes, the harder that gets." September CPI lands at 8:30 a.m. ET this morning — the next data point that will decide whether that bind tightens.