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Reports that Israel could attack Iran cause supply concerns
The price of oil jumped by more than 1% after Israel was reported to be preparing an attack on Iranian nuclear facilities. This sparked fears that the conflict could disrupt supply in this key Middle East region. Brent futures rose by 97 cents or 1.5% to $66.35 per barrel at 0330 GMT. U.S. West Texas Intermediate Crude Futures for July rose 96 cents or 1.6% to $62.99. The WTI contract for June expired at $62.56 on Tuesday. CNN reported Tuesday that the United States has received new intelligence suggesting that Israel is planning to attack Iranian nuclear facilities. CNN cited multiple U.S. government officials who are familiar with the issue. CNN, citing officials, added that it was unclear whether Israeli leaders had made a decision. On Wednesday, ING commodities analysts said that such an escalation could put Iranian oil supply in danger. It would also be a threat to other parts of the region. An attack by Israel could disrupt the flow of oil from Iran, the third largest producer in the Organization of Petroleum Exporting Countries. Iran may also retaliate, blocking oil tanker traffic through the Strait of Hormuz, a chokepoint in the Gulf through which Saudi Arabia Kuwait Iraq and United Arab Emirates export crude and fuel. This year, the U.S. has held multiple rounds of talks with Iran over its nuclear program. U.S. president Donald Trump is reviving his campaign to increase sanctions on Iranian crude oil exports in order to force them to abandon their nuclear ambitions. Ayatollah Ali Khamenei, the Iranian Supreme leader and U.S. officials made statements on Tuesday that both sides are still far from a solution. If successful, indirect nuclear talks are taking place between the U.S.A. and Iran. This could lead to further gains for the market. These talks seem to be losing steam, according to ING analysts. There were still some signs that crude supply was improving. Market sources cited American Petroleum Institute data on Tuesday to say that U.S. crude stockpiles rose last week, while gasoline and distillate stocks fell. Sources, who spoke on condition of anonymity, said that crude stocks in the U.S. - the world's largest oil consumer - rose by 2.5m barrels during the week ending May 16. Investors will be watching the Energy Information Administration's report on U.S. government oil stocks later this Wednesday. A source in the industry said that Kazakhstan's oil output has risen by 2% since May. This is a significant increase, which defies the pressure of OPEC+ to reduce Kazakhstan's production. (Reporting from Houston by Georgina McCartney and Jeslyn Lerh; Editing by Christian Schmollinger).
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Mubadala Energy is ready to sell South Andaman Gas to Indonesia at the right price
A senior executive at Mubadala Energy said that the company would be happy to provide all of the natural gas produced in its South Andaman Block for Indonesian domestic consumption, and do so at the best possible price. Indonesia wants producers of gas to increase their supplies to domestic consumers as the demand is increasing. The producers have been focusing on exports of LNG and asked the government to revise price caps for domestic gas. They argue that it is not a good business decision when spot LNG prices are so high. Abdulla Bu Ali (President Director of Mubadala Energy Indonesia) told reporters at the Indonesia Petroleum Association Conference that Mubadala Energy Indonesia was interested in both exports as well as selling to Indonesia. He said that domestic gas prices must be competitive, but declined to provide a specific figure. The United Arab Emirates explorer anticipates that gas production will begin at Tangkulo-1, in its South Andaman Block, in late 2028. It signed an initial contract to supply gas to the state fertiliser manufacturer Pupuk Indonesia on Tuesday. Indonesia sets domestic gas prices at $6.50 to $7 per million British thermal unit (mmBtu) for certain industries and electricity plants. Spot LNG Prices in Asia Last week, mmBtu was $11.75 Reporting by Dewi Curniawati, Florence Tan and Edwina Gibbs; Writing by Florence Tan.
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Amazon fires drive unprecedented global forest loss in 2024, report says
According to a Wednesday report, massive fires caused by climate change will cause global forest losses to break records in 2024. The loss of tropical forests reached 6.7m hectares (16.6m acres), a spike of 80% compared to the year 2023. This is an area about the size of Panama. Brazil, which will host the next climate summit in November struggled to control fires in Amazon during the worst ever drought recorded in rainforest. Wildfires also devastated a number of countries including Bolivia and Canada. The World Resources Institute's annual report and the University of Maryland's study showed for the first time that fires were the primary cause of tropical forest losses, a sad milestone in a humid ecosystem which isn't supposed to burn. Matthew Hansen, co-director of the University of Maryland lab that compiled and analysed the data, said: "The signals are particularly scary." "The fear is the climate signal will overtake our capability to respond effectively." The report stated that Latin America was particularly affected, with the Amazon biome experiencing its highest loss of primary forests since 2016. Brazil, the country with the largest tropical forest share in the world, has lost the most land of any other country, 2.8 million hectares. This was a reverse of the progress that had been made when Luiz inacio Lula da So took office, promising to protect the largest rainforest on earth. "This was unprecedented. We have to adapt our policies to the new reality," said Andre Lima who oversees the deforestation-control policies of Brazil's Ministry of Environment. He added that fires, which were never the top cause of forest losses, are now a priority for the Brazilian government. Bolivia has overtaken the Democratic Republic of Congo, despite only having half as much forest as that African nation. That country also experienced a significant increase in forest losses last year. Bolivia's forest loss surged by 200% in 2024, with a drought, wildfires and a government-incentivized agricultural expansion as the leading causes. The report also noted similar trends across Latin America in Mexico, Peru Nicaragua and Guatemala. Deforestation rates were also increased by conflicts in Colombia and Democratic Republic of Congo, where armed groups depleted natural resources. Wildfires in Canada and Russia, both of which have a population of over 12 million acres, caused a record loss of trees in 2024. Southeast Asia defied the global trend, with Malaysia, Laos and Indonesia posting double-digit reductions in primary forests loss. This was due to the domestic conservation policies, coupled with the efforts of communities and the private sectors, which continued to effectively control fires and agricultural growth. Charagua Iyambae Indigenous Territory in southern Bolivia was another outlier. It was able, through land-use policy and early warning systems, to prevent the record fires that ravaged the country. Rod Taylor, global director for forests for the WRI, stated that he hopes to see progress made by countries in the introduction of better funding mechanisms for conservation as they descend on the Amazonian town of Belem, for the next Climate Summit. He said that "at the moment, there's more money in cutting down forests than keeping them up." (Reporting and editing by Manuela Andréoni, Alexander Villegas)
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Chevron Hires MMA Offshore’s PSV to Support Assets off Australia
MMA Offshore, a subsidiary of Cyan Renewables, has secured a multi-year contract from Chevron Australia for its platform supply vessel (PSV) MMA Plover.The vessel has been contracted to provide marine logistics support to Chevron’s Barrow Island and Wheatstone assets, located off the coast of Western Australia.The assets are producing natural gas for Western Australia and liquified natural gas (LNG) for the Asia Pacific region, and house one of the world’s largest Carbon Capture and Storage systems.The vessel will undergo an extensive modification program to enable the carriage of up to 90 TEU (20 ft-equivalent unit sea containers).“This contract reflects MMA’s capability to deliver a comprehensive, high-value solution that goes beyond the provision of a vessel, reinforcing the trust and confidence our valued clients place in us.“We are looking forward to supporting Chevron Australia through this long-term contract and to providing a superior service at their two world class gas projects, which have become pillars of energy security for Australia and the broader Asia Pacific region,” said Keng Lin Lee, Cyan Renewables Group CEO.
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Geoquip Marine Wraps Up Surveys for German Offshore Wind Projects
Geoquip Marine, a Njord Partners portfolio company, has completed a preliminary geotechnical site investigation for two 4 GW offshore wind projects.The investigation will support the developer in advancing the next phase of design for both project sites, located in the German sector of the North Sea.Under the contract, Geoquip drilled 28 boreholes across the project sites to analyze the subsea terrain for turbine foundations.It underwent thorough soil sampling and seismic site monitoring to inform the engineering parameters for both projects in depths of 40 meters.By deploying the Dina Polaris vessel, equipped with geotechnical drilling, sampling and testing equipment along with an offshore laboratory, Geoquip provided real-time seabed data, identifying challenging site conditions safely and efficiently.Germany has set ambitious offshore wind capacity targets of at least 30GW to be installed by 2030, and these projects will be vital in supporting the country in reaching its goal. The potential renewable power from both projects aims to integrate low-carbon, hydrogen, and biofuel production, supporting wider industry decarbonization in Germany.“Receiving this safety award is a testament to our commitment to delivering reliable data with safety at the heart of everything we do.“It reflects the precision and transparency we bring to every stage of our work, especially as we identify and mitigate complex site and seabed conditions to support the safe development of critical wind projects. Safety and reliability aren’t just priorities for us, they're the foundation of our approach, and we remain focused on setting the standard across the industry,” said Fatih Topal, Project Manager at Geoquip Marine.
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LME WEEK - Mercuria says copper shortages could push prices up to record levels
The head of metals research at Mercuria said that the trading house expects a 700,000-metric-ton copper concentrate deficit and a 300,000-metric ton deficit for refined metal this year, which could drive prices up to new records. Nicholas Snowdon, the high-profile bull of Mercuria in Geneva, expects copper prices to reach record levels sooner rather than later. Snowdon said at the LME Asia Week Conference in Hong Kong that the copper market is in a vulnerable state. It's not a matter of if but when this market will move into a scarcity state. This could happen as early as the second half this year. Snowdon cited supply disruptions and stagnant production at a period of resilient Chinese demand, even though vast volumes of copper were diverted to the United States to prepare for potential import tariffs. This week, analysts told that they expected large shipments to arrive. Copper to the U.S. The COMEX, based in the United States, is a market that makes it profitable for both traders and producers to make profits as long as tariffs are still a threat. On March 26, COMEX copper reached a new record of $11,633 per metric ton. Snowdon stated that 500,000 metric tonnes of copper will be shipped to the U.S. in the second quarter this year. UBS analyst Sharon Ding said at an event on February that she expected 450,000 to 500,000 tonnes of copper to ship to the U.S. during the period March-May, which is about 250,000 to 300,000 tons more than what would be normal. Last week, copper inventories In China, the number of withdrawals soared sharply. This ended a three-week streak of large withdrawals which had caused concerns about shortages due to the global supply being pulled towards the U.S.
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Iron ore prices rise on a weak US dollar and resilient Chinese demand
On Wednesday, iron ore futures rose on the back of a weaker dollar and a resilient demand for this steelmaking ingredient. However, weakness in China's property sector tempered the gains. As of 0248 GMT, the most traded September iron ore contract at China's Dalian Commodity Exchange was trading 0.55% higher. It was 727 yuan (US$100.86) per metric ton. The benchmark June Iron Ore at the Singapore Exchange rose 0.35% to $99.75 per ton. Hexun Futures, a broker, said that the demand for iron ore exceeded expectations. This is due to the fact that steel mills are still operating at high levels. Mysteel, a consultancy, says that the number of blast-furnace mills reporting profits is increasing, with 60% of these mills reporting profits in the last week. The U.S. Dollar, which had fallen 1.3% in two days, was also supportive of prices. The greenback price of commodities is cheaper for those who hold currencies other than the U.S. Dollar. As authorities eased monetary policy, China cut its benchmark lending rate for the first since October. Major state banks also lowered their deposit rates, which boosted sentiment and caused Chinese stocks to rise on Tuesday. Analysts at ANZ said that iron ore futures were pressured by signs of continued weakness in China's real estate sector. Market sentiment was impacted by China's slower factory output, retail sales that missed expectations and new home prices remaining stagnant. Mysteel reported that the volume of iron ore shipped from mines in Australia and Brazil increased by 11.7% on a weekly basis to 27.1 millions tons. Coking coal and coke, the other steelmaking ingredients traded in a sideways manner. The benchmarks for steel on the Shanghai Futures Exchange have gained some ground. The Shanghai Futures Exchange saw a rise in steel benchmarks. $1 = 7.2080 Chinese Yuan (Reporting and editing by Michele Pek)
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Gold reaches a new high in a week on the back of a weaker dollar and US fiscal concerns
The gold price rose to its highest level in a week on Wednesday as the dollar fell and investors sought security amid U.S. financial uncertainty. Congress was debating an sweeping tax reform. As of 0209 GMT spot gold rose 0.2% to $3,293.98 per ounce after reaching its highest level since the May 12 session earlier in that session. U.S. Gold Futures rose 0.3% to $3295.80. Gold priced in greenbacks is now cheaper for holders of foreign currencies. The general dollar index has lost over a point in the past 24 hours due to the Moody's downgrade and skepticism regarding Trump's tax bill. Trump urged his Republican colleagues in the U.S. Congress on Tuesday to unite around a sweeping bill to cut taxes, but failed to convince a few holdouts that could still block a comprehensive package that includes much of his domestic agenda. In a low rate environment, gold, which is traditionally viewed as a safe haven during times of political and economic unrest, thrives. Tim Waterer, Chief Market Analyst at KCM Trade, said that "over the medium to long-term, gold's price is likely to rise further. However, if there are any headlines about positive trade deals, this could make it difficult for gold to try to regain the $3,500 mark." St. Louis Fed president Alberto Musalem said to the Economic Club of Minnesota, that trade tensions could allow the labor markets to remain strong and inflation on track to reach the Fed's goal of 2%. The traders now bet on the Fed cutting rates again in October, and that there will be around 54 basis point cuts by 2025. Spot silver dropped 0.2% to $32.99 per ounce. Platinum was down 0.3%, at $1,050.25. Palladium rose 0.5% to reach $1,017.93 - its highest price since February 4.
Natural gas and soy prices plummet as China reacts
The oil price plunged to its lowest level since 2021 on Friday, and other commodities such as natural gas and soya beans also fell. This was due to China's retaliation against the aggressive tariffs imposed by U.S. president Donald Trump.
Beijing announced an additional 34% levy for all U.S. products, retaliating after Trump announced that a 10% minimum duty would be applied to most U.S. imported goods. The duties were significantly higher for dozens countries, including China.
Bjarne Shieldrop is chief commodities analyst for SEB. He said, "This is China's first explicit escalation, and they are not backing off, they have upped the game." He expects further retaliation by Trump.
As tensions increased, fears grew that tariffs would lead to a trade war worldwide. This could impact the economy and reduce demand for certain commodities. The U.S. levies excluded energy. However, the retaliatory action by China includes all U.S. products, including export restrictions on certain rare earths.
According to Kpler data and EIA, the U.S. exports a lot of energy to China.
Wall Street benchmarks were heavily sold, with the Dow Jones on course to reach a correction and the Nasdaq set to enter a downturn.
Brent futures dropped $5.29 or 7.5% to $64.85 per barrel, while U.S. West Texas intermediate crude futures declined $5.57 or 8.3% to $61.83 per barrel. The benchmarks for oil were set to the lowest close in the last four years, since the beginning of the pandemic.
Gas prices have also fallen in Europe and Asia. The European gas price plunged to its lowest level in more than six months. The Dutch front-month contract fell by 3.02 euros or 7.7%, at 36.45 Euros per Megawatt Hour (MWh), or $11.78/mmBtu. The Asian spot prices for liquefied gas (LNG), too, remained at the lowest levels in over six months.
SOYBEANS and GRAINS
The Chicago Board of Trade Soybean Futures fell by more than 2 percent on Friday, as China's tariffs against U.S. products are expected to stop trade between the two countries. China is the biggest buyer of U.S. soyabeans.
CBOT soybeans fell 2.3% to $9.88 per bushel by 1304 GMT, after falling to a three-month low price of $9.84.
Prices of grain also dropped. CBOT Wheat fell 1.9% to $5.26 per bushel, while Corn lost 1% at $4.52-3/4 per bushel.
Tariffs on Chinese grain and soybeans will prevent sales to China. "There will be no U.S. grain or soybean sales to China until the tariff issue is resolved," said one European trader.
The trade war that began during Trump's first presidency in 2018 has already put pressure on the demand for U.S. agriculture products. Beijing raised tariffs last month on U.S. goods worth $21 billion in response to Washington’s earlier round on Chinese products.
(source: Reuters)