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(Updates prices, adds analyst comment, changes dateline to London.) By Anna Hirtenstein LONDON, Oct 10 (Reuters) – Oil prices declined on Friday, after settling around 1.6% lower in the previous session, as the market's risk premium faded after Israel and Hamas agreed to the first phase of a plan to end the war in Gaza. Brent crude futures were down 16 cents, or 0.25%, at $65.06 a barrel at 0819 GMT. U.S. West Texas Intermediate crude was down 7 cents, or 0.11%, to $61.44. "Finally having some kind of peace process in the Middle East is lowering the shoulders a little bit," said Bjarne Schieldrop, chief commodities analyst at SEB. This could ease fears about crude carriers passing through the Suez Canal and the Red Sea, he said. BOTH BENCHMARKS ON TRACK FOR WEEKLY GAINS Israel and the Palestinian militant group Hamas signed a ceasefire agreement on Thursday in the first phase of U.S. President Donald Trump's initiative to end the war in Gaza. Under the deal, which Israel's government ratified on Friday, fighting will cease, Israel will partially withdraw from Gaza, and Hamas will free all remaining hostages it captured in the attack that precipitated the war, in exchange for hundreds of prisoners held by Israel. Numerous vessels have been attacked by the Iran-aligned Houthis in Yemen since 2023, targeting ships they deem linked to Israel in what they described as solidarity with Palestinians over the war in Gaza. On a weekly basis, both crude benchmarks were on track to close in positive territory. Brent is up around 1% and WTI about 0.6% so far, after falling steeply last week. Prices climbed about 1% on Wednesday to a one-week high because of stalled progress on a Ukraine peace deal, a sign that sanctions against Russia, the world's second-largest oil exporter, could continue. The Gaza ceasefire deal means the focus can move back to the impending oil surplus, as OPEC proceeds with the unwinding of production cuts, said Daniel Hynes, an analyst at ANZ. A smaller-than-expected November hike in output agreed by the Organization of the Petroleum Exporting Countries and allies (OPEC+) on Sunday eased some of those oversupply concerns. "Markets’ expectations for a sharp ramp up in crude supply have not manifested themselves in substantially lower prices," BMI analysts said in a note on Friday. "The most recent rise in production is lower than previously feared, contributing to a slight rise in prices for the week," they said. Investors are also worried that a prolonged U.S. government shutdown could dampen the American economy and hurt oil demand in the world's largest crude consumer. (Reporting by Anna Hirtenstein. Additional reporting by Sudarshan Varadhan. Editing by Christian Schmollinger and Mark Potter)

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* Gold headed for weekly gain of 2.2% * Gold is in a secular bull market, analyst says * Israel ratifies ceasefire agreement with Hamas on Friday * Silver hovers below record high of $51.22/oz hit on Thursday (Updates for EMEA morning session) By Anmol Choubey Oct 10 (Reuters) – Gold prices edged lower on Friday as investors booked profits following the metal's surge past the $4,000-an-ounce mark earlier this week. However, lingering broader uncertainty and expectations of U.S. rate cuts kept the bullion on track for an eighth consecutive weekly gain. Spot gold was down 0.1% at $3,970.11 per ounce, as of 0901 GMT, but has climbed 2.3% so far this week. U.S. gold futures for December delivery rose 0.3% to $3,983.70. "That ($4,000) psychological threshold triggered profit-taking among speculators and short-term traders, but long-term investors should see it as confirmation that confidence in paper money is eroding," said Alex Ebkarian, COO at Allegiance Gold, adding that gold is in a secular bull market for the next five years. Non-yielding bullion, traditionally considered a hedge during broader uncertainty, hit a record high of $4,059.05 on Wednesday. Multiple factors aided the rally, including geopolitical risks, robust central bank buying, exchange-traded fund inflows, expectations of U.S. rate cuts, and trade-related uncertainties. Silver rose 2.8% to $50.51 per ounce on the day after touching a record high of $51.22 in the previous session. It has gained 75% so far this year. "Given the increase in lease rates, a pronounced backwardation curve, and lack of liquidity in London OTC, one should anticipate greater volatility for silver," said Hugo Pascal, a precious metals trader at InProved. Backwardation is when a commodity's spot price is higher than its future price. "If contango (opposite of backwardation) returns and stress eases, a short pullback could emerge (in silver) — and that may prove to be the next great buying opportunity," Ebkarian said. Also, weighing on safe-haven demand for bullion, Israel's government ratified a ceasefire with the Palestinian militant group Hamas on Friday. Meanwhile, minutes from the U.S. Federal Reserve's September meeting revealed policymakers were open to rate cuts to address labour market risks, though inflation concerns persisted. Investors still anticipate two Fed rate cuts of 25 basis points each in October and December. In other metals, platinum eased 0.8% to $1,606.20 and palladium rose 0.3% to $1,415.25. Both these metals were headed for weekly gains. (Reporting by Anmol Choubey in Bengaluru; Editing by Harikrishnan Nair)

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ROME, Oct 10 (Reuters) – Italian industrial output slumped in August by 2.4% from the month before, data showed on Friday, in a renewed sign of weakness for the country's long-struggling manufacturing sector. A Reuters survey of 13 analysts had pointed to a 0.4% decrease. National statistics agency ISTAT confirmed July's data at a 0.4% month-on-month rise. On a work day-adjusted year-on-year basis, industrial output plunged 2.7% in August versus a forecast for a 0.5% increase, following a 0.9% rise in July. Both the month-on-month and year-on-year declines in August were the steepest since December last year. ISTAT gave the following details. INDUSTRIAL PRODUCTION AUG JULY JUNE Mth/mth pct change (adjusted) -2.4 0.4 0.1 Yr/yr pct change (adjusted) -2.7 0.9 -0.7 Yr/yr pct change (unadjusted) -5.7 0.9 -0.7 (Reporting by Antonella Cinelli, editing by Gavin Jones)

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(The opinions expressed here are those of the authors, professors of law at the Universities of North Carolina and Virginia, respectively.) By Mark Weidemaier and Mitu Gulati Oct 10 (Reuters) – Holders of Russian foreign debt surely wish U.S. President Donald Trump had fulfilled his promise to bring the war in Ukraine to a quick end, as payments on most instruments have been on hold since Russia’s invasion began. The clock for making claims may now be ticking. Russian sovereign debt denominated in euros and U.S. dollars stopped paying out in April 2022 after Western powers slapped sanctions on Moscow. The longer the conflict drags on, the more bondholders might wonder whether they need to do anything to preserve their right to payment. PRESCRIPTION PANIC? Under normal circumstances, when a bond issuer fails to pay, the bondholder must file suit within the relevant statute of limitations. These statutes exist to protect both defendants and courts from stale claims. However, in many jurisdictions, parties may agree to shorten these limitation periods. Russia’s bond contracts have so-called “prescription clauses” seemingly designed to do just that. These clauses say that bondholder “claims” for principal and interest “shall become void” unless “made” within three years of the payment’s due date. It has been well over three years since Russia’s first missed payments on April 4, 2022. Does this mean bondholder claims are starting to become void? The answer may not be so obvious. To begin, it is unclear what “making a claim” even means. How formal does this action need to be? What type of communication will suffice? Courts are rarely called upon to interpret prescription clauses like the one used by Russia, so there is limited precedent to draw on. There is some, however. In litigation against Argentina in 2022, a U.S. federal court in New York held that investors had made a claim against the country simply by asking it to enter an agreement to suspend the limitations period. Russia’s bonds are governed by English – not New York law – but perhaps UK courts would take a similar approach. Russia’s bonds are held via depository institutions that reportedly send automated reminders of payment due dates to the issuer. Might that form of communication be enough? Many legal experts are skeptical, but the limited case law here leaves open the possibility. EXERCISE IN FUTILITY Russian bondholders could reasonably make the argument that, given sanctions, they ought to be excused for failing to “make” their claims within the prescription period. After all, even if bondholders had taken legal action and received a favorable judgment in English courts, they would have had little hope of enforcing it against frozen Russian assets, especially given that Russian bonds do not include the waivers of sovereign immunity typically found in government bonds. Meanwhile, the Russian government has publicly maintained that it intends to pay once sanctions are lifted. Given both the futility of filing a lawsuit and the government’s apparent willingness to pay, what would be the point of requiring bondholders to undertake formal steps to “make” claims for missed payments? Still, the text of the prescription clause seems clear. Regardless of whether it is sensible, “making” a claim is required within three years, and bondholders didn’t do that. EXTENUATING CIRCUMSTANCES Not so fast though. The presence of an ongoing war complicates matters further. There are several old U.S. cases in which courts ruled that the statute of limitations could be extended during a period of war. The logic of these cases seems to have been that the war effectively denied creditors access to the courts. That logic could potentially be extended to contractual prescription periods, when war-related sanctions make payments essentially impossible. But even if that’s the case and Russia resumes making payments, including catching up on missed payments, after sanctions are eventually lifted, there will still be more questions. Ordinarily, if there is an extended delay in making payments, the debtor will owe additional interest for the delay period. This is rarely disputed, and the arguments tend to be over what interest rate pertains to the delay period. There are, once again, old cases related to claims made during war time that are relevant here, but this time, they aren’t in creditors’ favor. These cases typically hold that interest does not accrue during the period of delay when the cause of the interruption is a war. For a variety of reasons, the logic of these cases may not apply here. For one, Russia is clearly the aggressor in this war and thus is responsible for its current inability to pay, given that it could restore this ability simply by ceasing its aggression. Under those circumstances, many would think it perverse to deny investors interest while they wait. Still, the law here is not as clear on this point as many investors might assume. Either way, with the war likely to drag into its fourth year, Russia’s willingness to pay foreign bondholders may be diminishing. Holders of Russian debt may therefore soon determine that the risk of doing nothing – and banking on Moscow’s eventual compliance – is just too high. (The views expressed here are those of the authors, Mark Weidemaier and Mitu Gulati, professors of law at the Universities of North Carolina and Virginia, respectively. They host the podcast, Clauses and Controversies, where they speculate about fun sovereign debt contract matters). Enjoying this column? Check out Reuters Open Interest (ROI), your essential new source for global financial commentary. ROI delivers thought-provoking, data-driven analysis of everything from swap rates to soybeans. Markets are moving faster than ever. ROI, can help you keep up. Follow ROI on LinkedIn, and X. (Writing by Mark Weidemaier and Mitu Gulati; Editing by Anna Szymanski.)

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