Oil prices remain steady despite ongoing tensions in the Middle East, with ICE Brent comfortably trading above $100 per barrel. The market is pricing in a significant risk premium due to uncertainty over oil flows through the Strait of Hormuz, which could ease with a potential agreement between the US and Iran.
International Energy Agency members have agreed to release the remaining 100 million barrels of oil from strategic reserves, part of the 400 million barrels pledged earlier this year. This includes 20 million barrels of diesel set to enter the market soon. The US may react negatively to the scale of the release, particularly regarding diesel, potentially leading to restrictions on US diesel exports.
The Financial Times reports that the US is considering easing sanctions on Russia’s shadow tanker fleet to reduce fuel costs. This move aims to free up tanker capacity for the broader market, though effectiveness remains uncertain due to existing UK and EU sanctions.
US commercial crude oil inventories fell by 8.56 million barrels last week, the largest decline since February, driven by Hurricane activity and reduced imports. Despite increased refinery utilization rates, distillate fuel stocks fell to record seasonal lows as winter approaches.
Iron ore prices briefly dipped below $90 per ton, the lowest since November 2022, due to weak Chinese demand and abundant global supply. Prices have declined over 14% this year, with steel mills operating on thin margins and further production cuts possible.
Cocoa prices firmed slightly amid stronger demand, with European and Asian grindings showing significant year-over-year increases. The International Grains Council revised global corn production forecasts upward, while wheat and soybean ending stocks were also adjusted.