The Commodities Feed: Oil cools off from the highs
Lead — Crude oil prices saw a correction this week, with ICE Brent dropping below $102/bbl, amidst easing geopolitical tensions and profit-taking after a recent price rally. Per the full note from ING, the decline in oil prices comes despite ongoing supply risks in the Middle East, including disruptions following drone attacks on key infrastructure. Additionally, speculative positioning remains heavily bullish, indicating that market participants still foresee upward price movements despite the current pullback, with money managers holding the largest net long position since late May 2026. As discussions unfold at the UN General Assembly and with the upcoming Trump-Xi meeting on the horizon, market sentiment may see fluctuations based on geopolitical developments.
What the desk is arguing
The desk suggests that while recent upward momentum in oil prices is faltering, underlying supply risks and bullish positioning may support prices when market sentiment shifts. The commentary notes that Brent crude fell roughly 2% at the start of the week, driven by profit-taking after sustained gains and optimistic expectations around diplomatic discussions, per the full note from ING.
Despite the recent correction, supply concerns remain prevalent, particularly with warnings from Saudi Aramco regarding crude allocation challenges. Reports indicate that European customers may face reduced supply due to damage from drone attacks on pipelines, which could mitigate availability in the near term. Additionally, speculative positioning reflects a robust bullish sentiment with money managers increasing their net long Brent positions to 282,657 lots, a significant surge indicating strong market confidence.
Where it sits in our coverage
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How other firms see it
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What the calendar says
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Key takeaways
- 01Crude oil prices are experiencing a pullback despite underlying geopolitical tensions.
- 02Supply risks remain, particularly from Saudi Arabia's production capabilities.
- 03Speculative positioning shows a significant bullish bias among investors.
- 04Market sentiment may shift with developments from the UN General Assembly meetings.
Market implications
Key levels to watch include the recent support at $100/bbl for Brent, as well as positioning shifts following political developments. Attention should be paid to any announcements from the meetings that could impact supply dynamics or geopolitical relations.
Risks to this view
A reversal in the bullish sentiment could be prompted by a significant de-escalation of geopolitical tensions in the Middle East or a faster-than-anticipated resolution of the supply disruptions in Saudi Arabia. Additionally, any signals from key meetings indicating reduced geopolitical risks could pressure prices further downward.
Articles The Commodities Feed: Oil cools off from the highs Published 08:04 Commodities daily Share X LinkedIn E-mail Copy link Share X LinkedIn E-mail Copy link Download Crude oil started the week on a soft note as the focus shifts toward discussions at this week's UN General Assembly (UNGA) summit and the Trump-Xi meeting, even as supply risks persist Ewa Manthey and Warren Patterson A softer start to the week has seen ICE Brent fall by around 2%, taking prices below $102/bbl Energy - Brent down despite ongoing supply risks Crude oil started the week on a softer footing, with ICE Brent falling around 2% to below $102/bbl and WTI easing to around $98/bbl. The pullback comes despite ongoing geopolitical risks and continued concerns over global oil supply disruptions. Profit-taking after recent gains, together with hopes for constructive discussions at this week's UN General Assembly (UNGA) and the upcoming Trump-Xi meeting, helped improve market sentiment.
Supply concerns remain elevated. Saudi Aramco has warned some European customers that it may be unable to allocate crude cargoes next month under long-term contracts as disruptions to the East-West pipeline limit crude availability at Yanbu. The pipeline was damaged in last week's drone attacks and could take several weeks to fully restart.
Reduced Saudi supply has tightened the European market, with some North Sea crude grades trading at steep premiums to benchmark prices. Meanwhile, speculative positioning remains firmly bullish. ICE data show money managers increased their net long Brent position by 16,904 lots over the past week to 282,657 lots as of last Tuesday, the largest net long since late May 2026.
The increase was driven largely by short covering as investors continue to price in greater upside risk from Middle East supply disruptions. Refined product markets also remain tight. August exports from key Asian suppliers declined amid constrained crude availability and refinery outages.
India's gasoline and diesel exports fell 14.5% year-on-year and 19.2% YoY, respectively, while Chinese gasoline exports dropped 57.4% YoY. Although Chinese diesel exports increased, lower overall product availability from Asia has kept Western markets undersupplied and supported crack spreads. The ICE gasoil crack spread has risen to around $95/bbl this week, up from an average of roughly $74/bbl in August.
Metals - Gold edges lower Gold edged lower at the start of the week as investors assessed the implications of the Federal Reserve's first rate hike since 2023 and the prospect of further policy tightening. Comments from Fed officials reinforced concerns that inflation remains elevated, supporting expectations that rates will stay higher for longer. While tighter monetary policy remains a headwind for bullion, ETF holdings are sitting at a six-month high, and continued central bank buying should help limit downside.
LME copper is holding above $14,500/t, supported by signs of improving Chinese demand. The Yangshan premium climbed to $124/t, its highest level since November 2022, signalling stronger import appetite, while domestic production eased slightly in August. Copper remains up more than 16% this year amid ongoing supply tightness driven by stronger US imports ahead of potential refined copper tariffs.
Near-term price action is likely to remain range-bound as supply risks offset macro headwinds and markets await greater clarity on US trade policy. Chinese August trade data showed unwrought aluminium and aluminium product imports fell 10% YoY to 290kt, reflecting stronger domestic supply. Steel imports also weakened, down 13.3% YoY to 430kt.
Meanwhile, alumina exports surged 135.8% YoY to 430kt, supported by higher Chinese output and ongoing supply disruptions linked to tensions in the Middle East. The latest SHFE data showed inventories declined across most base metals last week, with aluminium stocks falling for a 14th consecutive week to 321kt. Lead, nickel and zinc inventories also moved lower, reflecting steady demand and restocking activity.
Copper was the exception, with stocks rising 2.4% WoW to 56kt, reversing three weeks of declines. Agriculture - Cocoa declines as supply concerns ease Cocoa prices extended their decline on Friday, with US cocoa falling around 8% as comfortable near-term supplies continued to weigh on the market. Prices are now down almost 18% this month, putting cocoa on track for its first monthly decline since February.
Exchange-monitored inventories in both Europe and the US remain relatively ample, while demand recovery has been slow as manufacturers continue efforts to reduce cocoa usage following the period of elevated prices. Despite the recent sell-off, concerns over deteriorating crop prospects in Ivory Coast and Ghana, together with the risk of a strong El Niño event, continue to support expectations of a supply deficit in the 2026/27 season. Western Australia's Grain Association raised its forecast for the 2026/27 wheat crop to 10mt from 9mt, reflecting improved rainfall and better yield prospects.
However, output is still expected to fall short of last season's record 13.3mt harvest. While recent weather conditions have improved production potential, heat remains the key risk. Hot winds across major growing areas and limited rainfall forecasts are likely to keep crop conditions under pressure through the remainder of the season.
Chinese customs data show corn imports rose to 320kt in August, taking cumulative imports for the first eight months of the year to 1.7mt, up 91.1% YoY. The increase reflects efforts by traders to diversify sourcing away from the US amid rising trade tensions and policy uncertainty. Wheat imports also strengthened, rising 13.4% YoY to 260kt in August, while cumulative January-August imports increased 35.6% YoY to 3.5mt.
Russia's Agriculture Ministry reported that grain harvests had reached 120mt as of 18 September, including more than 90mt of wheat, with wheat harvesting around 92% complete. Meanwhile, farmers had sown 6m hectares of winter crops, against a target of more than 19m hectares for this year's planting campaign. In France, crop conditions continue to deteriorate following the summer heatwave.
The Agriculture Ministry reported that just 23% of the corn crop was rated good to excellent as of 14 September, down from the previous week and well below the 62% recorded a year ago. Harvest progress accelerated, with 27% of the crop collected, up from 9% the previous week and ahead of the five-year average of 5%. Commodities Feed Content Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives.
The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more Share X LinkedIn E-mail Copy link Share X LinkedIn E-mail Copy link Download Authors Ewa Manthey Commodities Strategist Ewa Manthey is a Commodities Strategist based in London. She joined the bank in September 2022 and covers the entire commodities complex, with a particular focus on the metals markets.
She has… Warren Patterson Head of Commodities Strategy Warren Patterson is Head of Commodities strategy based in Singapore. He joined the bank in April 2016 and covers the entire commodities complex. Previously, he worked at a commodities trade house… In this article Energy - Brent down despite ongoing supply risks Metals - Gold edges lower Agriculture - Cocoa declines as supply concerns ease
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