What's takeaway 1 on The Commodities Feed?

Oil prices remain above $100/bbl amidst persistent geopolitical tensions.

What's takeaway 2 on The Commodities Feed?

The IEA's release of strategic reserves may stabilize short-term supply, but risks remain.

What are the market implications for The Commodities Feed?

Market participants should closely monitor oil price levels, particularly any shifts below $100, which could indicate waning support. Additionally, the geopolitical landscape, particularly any developments in U.S.-Iran relations, may serve as critical market catalysts that could influence trading strategies in the oil sector.

What are the risks to this view on The Commodities Feed?

A reversal in expected oil price trends could occur if negotiations between the U.S. and Iran yield favorable outcomes, significantly stabilizing oil flows from the Middle East. Furthermore, any substantial increase in U.S. diesel exports or expanded releases from U.S. strategic reserves could further dampen the current price support.

The Commodities Feed: Oil holds firm as Middle East breakthrough remains elusive

What the desk is arguing

Oil markets are exhibiting considerable strength, with prices remaining elevated as concerns persist over geopolitical risk and supply stability. The desk frames this as a clear indication of ongoing tensions in the Middle East driving traders to factor in substantial risk premiums into current pricing dynamics. Per the source, Brent crude is trading comfortably above $100 per barrel, highlighting market anxiety and speculative positioning in response to these risks.

Supporting this view, the IEA's commitment to releasing an additional 100 million barrels from strategic reserves aligns with previous distributions to counterbalance supply shortfalls. As noted, thus far, around 330 million barrels have been released, signaling a proactive approach to underpin market liquidity. However, with reports indicating potential dissatisfaction from the U.S. regarding the scale of this release, particularly concerning diesel fuel availability, market participants must remain vigilant for policy shifts that could impact future dynamics.

Where it sits in our coverage

The current consensus price target for oil amongst our tracked firms positions around $1.075 per barrel, with the following targets noted: - jpmorgan: 1.10 (Mar26) - bofa: 1.04 (Mar26) This outlook suggests that while there is agreement on the overall bullish sentiment towards oil prices, there is divergence in projected levels, with our desk’s view aligning with jpmorgan at the higher end of the spread.

How other firms see it

Aligned firms such as jpmorgan share a bullish outlook on oil prices, while bofa offers a more cautious stance, indicating skepticism around sustained upward momentum. This split reflects broader market apprehensions regarding the resolution of supply-side issues and geopolitical tensions impacting oil flows.

Traders should also keep an eye on related currency pairs like USD/JPY, as fluctuations in oil prices may influence central bank policies impacting these currencies and their respective economic landscapes.

Articles The Commodities Feed: Oil holds firm as Middle East breakthrough remains elusive Published 02:39 Commodities daily Share X LinkedIn E-mail Copy link Share X LinkedIn E-mail Copy link Download Oil is holding firm as Middle East tensions refuse to cool. Meanwhile, IEA members agreed to release the rest of the emergency stockpiles they pledged earlier this year Warren Patterson and Ewa Manthey Energy – IEA member to release remaining oil Oil remains well-supported. A pattern has set in: prices slide early in the session, then claw back most of those losses by the close.

As a result, ICE Brent continues to comfortably trade above $100/bbl. Uncertainty in the Middle East and concerns over the sustainability of oil flows through the Strait of Hormuz has the market pricing in a significant risk premium. The longer this pickup in flows continues, the more likely the market will start giving back some of this risk premium.

In order to see a full removal, there needs to be some kind of agreement between the US and Iran. This would provide the market with more confidence that stronger oil flows from the region will continue. International Energy Agency members agreed to release the remaining 100m barrels of oil from strategic reserves.

It's part of the initial 400m barrels that members agreed back in March to help with the Persian Gulf supply shortfall. According to the IEA, members have distributed around 330m barrels to date. From the 100m barrels to be released, 20m barrels will be diesel, and will make its way onto the market as soon as possible.

The US probably won’t be happy with the scale of the release, particularly regarding diesel. Initial suggestions were that we could see around 50m barrels of diesel released. The risk is that if the US believes these volumes are not enough, the administration may mull restrictions on US diesel exports once again.

The Financial Times reports that the US is considering easing sanctions on Russia’s shadow tanker fleet in bid to reduce fuel costs. Tanker freight rates surged to record levels recently due to the growing inefficiency in trade flows out of the Persian Gulf. Since the start of the Russia-Ukraine war, Russia has built a significant fleet of tankers, which are largely sanctioned.

The idea is that easing sanctions on these vessels would free up tanker capacity for the broader market. The key question is how effective it might be in bringing down spot tanker rates. It’s unclear how much of this capacity is actually available.

Given UK and EU sanctions, insurance could still be an issue. The latest data from the EIA shows that US commercial crude oil inventories fell by 8.56m barrels over the last week, which is the largest weekly decline since February. Hurricane activity in the Gulf played part in the inventory decline, with offshore production shut in due to the storm.

US output is estimated to have fallen by 300k b/d week-on-week. Crude oil imports fell by 791k b/d WoW, a key driver behind the fall in stocks. For refined products, US refineries increased their utilisation rates by 0.8pp to 93.5%, leaving utilisation rates at their highest seasonal levels in at least 20 years.

Despite this, distillate fuel stocks still fell by 2.53m barrels over the last week. This leaves distillate inventories at record seasonal lows as we head into winter. Meanwhile, gasoline stocks increased by 3.52m barrels.

Metals — Iron ore breaks below $90…briefly Iron ore prices fell briefly below $90/t yesterday, the lowest since November 2022, as weak Chinese demand and abundant global supply continued to weigh on sentiment. Prices have declined more than 14% this year, pressured by the prolonged weakness in China’s property and construction sectors. This is undermining steel demand.

China’s crude steel production during the first eight months of 2026 fell to its lowest level for the period since 2018, highlighting the impact of the country’s real estate downturn. With steel mills operating on thin margins, further production cuts remain possible. Additional supply entering the market has kept iron ore fundamentals well supplied.

As a result, prices are expected to remain rangebound, with near-term risks skewed to the downside. Steel inventories at major Chinese mills rose to 17mt in early October, up 8.4% from late September, according to CISA data. Inventories were 6.9% higher than a year earlier, indicating subdued underlying demand.

Meanwhile, crude steel production at major mills increased 3.1% from late September to 1.94mt/d in early October. Agriculture —Cocoa demand recovery support prices Cocoa prices firmed yesterday, with London cocoa settling a little more than 1% higher amid firmer demand numbers. Data from the European Cocoa Association showed European cocoa grindings rose 3.2% year-on-year and 10% quarter-on-quarter to 348.2kt in 3Q26, marking the first annual increase since 2Q24.

Similarly, the Cocoa Association of Asia reported a 29.2% YoY increase in grindings and a 4.1% QoQ rise to a record 233.8kt. In its monthly update, the International Grains Council (IGC) raised its 2026/27 global corn production forecast to 1,307mt from 1,301mt, while consumption was revised up to 1,323mt from 1,321mt. This saw global corn ending stocks increase to 297mt from 289mt.

For wheat, the council left production unchanged at 820mt but marginally increased consumption to 827mt from 826mt. Despite the higher demand estimate, wheat ending stocks were revised up to 279mt from 278mt. For soybeans, 2026/27 global ending stocks were raised to 74mt from 73mt as weaker demand (-3mt) more than offset lower production (-1mt).

Global soybean production is still projected to reach a record 439mt, supported by large crops in the US and South America. Tanker Steel Softs Russian sanctions Persian Gulf Iron ore IEA Grains EIA Diesel Cocoa 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 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… 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… In this article Energy – IEA member to release remaining oil Metals — Iron ore breaks below $90…briefly Agriculture —Cocoa demand recovery support prices

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