The commodities feed: Brent drops below $100

Oil prices continue to retreat as expectations of increased Saudi crude exports, progress in US-Iran talks, and a larger-than-expected rise in US crude inventories help ease supply concerns.

Energy – Saudi pipeline restart weighs on Oil prices

Oil prices fell sharply on Wednesday, with Brent dropping below $99/bbl and WTI trading near $89/bbl. The sell-off was driven by expectations of rising Saudi crude exports, diplomatic progress between the US and Iran, and a larger-than-expected build in US crude inventories, all of which helped ease concerns over Middle East supply disruptions. Brent has now declined for six consecutive sessions, its longest losing streak since August 2025, bringing cumulative losses to more than 9.5%.

Saudi Arabia has restarted operations at its East-West pipeline and could soon resume exports from the Yanbu terminal. The route, which bypasses the Strait of Hormuz, has a capacity of around 7m b/d and is expected to gradually restore lost export flows, potentially increasing global crude supplies in the coming weeks.

On the geopolitical front, President Donald Trump described recent discussions with Iranian officials as "very productive", raising hopes for further diplomatic progress and reducing fears of prolonged supply disruptions in the region. Despite the recent correction, oil prices remain more than 60% higher year-to-date.

Additional pressure came from the latest API data, which showed US crude inventories rose by 1.7m barrels last week, compared with expectations of a 578k-barrel draw. Meanwhile, gasoline and distillate stocks each fell by 2.2m barrels. The market will now look to the EIA inventory report later today for confirmation.

US natural gas prices extended gains for a second session, with Henry Hub futures trading above $3/MMBtu. Prices were supported by lower production in the Lower 48 and forecasts for cooler temperatures across the Northeast, which could boost heating demand. However, potential storm-related power outages may limit the increase in gas consumption.

Metals – Strong demand drives Chinese Gold imports

Chinese gold imports rose 39.3% year-on-year to 141.7 tonnes in August, taking year-to-date imports to a record 1,141.2 tonnes, up 72.2%. Lower gold prices, a stronger yuan and persistent domestic price premiums encouraged inflows, while banks also drew on remaining import quotas under the licensing regime introduced by the People's Bank of China in June. Chinese gold ETFs added around 44 tonnes through August, an 18% increase from the start of the year, according to the Shanghai Gold Exchange, while global ETF holdings were broadly unchanged.

LME copper extended gains for a sixth consecutive session on Tuesday, its longest winning streak since May, before retreating slightly Wednesday morning, as tight physical market conditions in China continued to support prices. Falling inventories, holiday-related restocking and seasonal demand ahead of the Mid-Autumn Festival and National Day holidays boosted consumption. Shanghai copper cathode inventories fell by 14,700 tonnes to 43,900 tonnes, the lowest level since December 2023. While imported copper arrivals have increased, most material has flowed directly to fabricators rather than warehouses, keeping spot supplies tight.

Indonesia's Morowali Industrial Park (IMIP) has instructed nickel pig iron producers to curb output as El Niño-related drought conditions strain water supplies needed for processing operations. The cuts could affect around 100,000 tonnes of NPI production, compared with the park's annual capacity of roughly 4.2 million tonnes.

Investor positioning across base metals remained subdued. According to the latest COTR data, net bullish copper positions fell by 3,981 lots to 42,132 lots, the lowest level since late March and marking a sixth consecutive weekly decline despite higher prices. Aluminium net longs dropped by 11,623 lots to 77,423 lots, driven largely by long liquidation, while zinc net longs fell by 2,787 lots to 29,946 lots, extending their decline for a fourth straight week.

Agriculture – Ukraine completes wheat harvest

Ukraine's grain and legume harvest reached 33mt as of 22 September, up 10% year-on-year, with 7m hectares harvested, equivalent to 61% of the planned area. Wheat harvesting is now complete, with production rising 11% year-on-year to 25.3mt. Corn harvesting remains at an early stage, with output reaching 340kt from 68k hectares, compared with 389kt produced at the same point last year.

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