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amid renewed peace deal hopes Yesterday, 03:01 Commodities daily Share X LinkedIn E-mail Copy link Share X LinkedIn
E-mail Copy link Download Oil sold off sharply yesterday on optimism that a Middle East deal might be within reach.
However, markets may be getting ahead of themselves once again Warren Patterson and Ewa Manthey Energy - Deja-vu for oil
markets? Oil prices dropped sharply yesterday on rising optimism that the US and Iran may be moving closer to reviving a
Middle East deal. ICE Brent settled more than 7% lower on the day, after President Trump called off strikes against
Iran, aiming to get a deal across the line. He also suggested that talks between the US and Iran have already resumed.
Iranian officials continue to deny that any negotiations are under way, insisting that current discussions with Oman are
limited to shipping routes through the Strait of Hormuz. At the same time, reports emerged yesterday that a cargo vessel
off the Omani coast was struck by an unidentified projectile. The scale of the sell-off seems fairly overdone, given
that there’s still considerable uncertainty. We’ve been in this situation multiple times before, only to see
things unravel. And with Iran denying that any talks are underway and Trump issuing warnings if no deal materialises,
the backdrop clearly leaves ample room for a renewed escalation. In the Black Sea, recent days have seen more loading
activity at the CPC terminal, which ships Kazakh oil from Russia’s coast. Loadings had been disrupted in recent
weeks amid ongoing Ukrainian attacks on Russian energy infrastructure. There have also been risks for oil tankers
operating in and around the terminal, leaving shipowners hesitant to load. For now, flows into the terminal still appear
to be running below normal levels. European gas prices also came under pressure yesterday, although not to the same
extent as oil, with TTF settling 2.65% lower on the day. There are growing concerns in Europe over storage levels and
the slow injections we are seeing, leaving the region more vulnerable as we head into the 2026/27 winter. While storage
is only a little above 57% full — below the utilisation seen in 2021 — in absolute volume terms it still
sits just above 2021 levels. It’s also worth pointing out that EU gas demand is considerably lower now than it was
in 2021. So, while the gas market is admittedly tight, it’s still quite a bit more comfortable than it was in
2021. EU gas demand in 2025 was 18% lower than 2021 levels. Metals - Lower oil prices support gold rebound Gold edged
higher, extending its recovery after posting its first monthly gain since February in July. Prices found support from
easing geopolitical concerns in the Middle East. Reports of diplomatic efforts aimed at improving shipping conditions
through the Strait of Hormuz helped to drive a sharp decline in oil prices. Lower energy prices have eased some
inflation concerns, offering a more supportive backdrop for bullion. Meanwhile, markets continue to assess the outlook
for US monetary policy following last week's Federal Reserve meeting. While policymakers kept rates unchanged,
uncertainty over the policy path remains elevated as investors weigh persistent inflation risks against signs of
moderating economic momentum. Silver also moved higher, supported by the broader improvement in precious metals
sentiment. Gold is likely to remain caught between improving geopolitical sentiment and ongoing uncertainty over US
interest rates. Any further decline in energy prices could help improve the macro backdrop for bullion, though
expectations for rates to stay higher for longer may continue to limit upside. In base metals, zinc climbed to above
$3,700/t. This marks the highest level in nearly four years, driven by tight concentrate supply that continues to
squeeze smelter margins and limit refined‑metal output. Declining exchange inventories and signs of tightness in
the physical market have also supported prices, helping zinc extend its recent rally despite mixed demand conditions.
Tight mine supply, low treatment charges and falling inventories should underpin zinc prices in the near term. Yet
weaker downstream demand could limit further upside. Agriculture - Vietnam coffee exports surge The latest data from the
Uganda Coffee Department Authority show that Uganda’s coffee shipments fell 24% year-on-year to 744.5k bags in
June. The decline in exports was largely driven by traders holding back sales as global prices weakened amid an improved
supply outlook. Coffee exports reached their highest monthly level of the 2025/26 season, with the department
attributing the strong demand performance to improving production prospects. Robusta exports dropped 24% YoY to 668.2k
bags, while Arabica shipments eased 26.8% YoY to 76.3k bags. Cumulative shipments for the 2025/26 season (Oct –
June) reached 5.6m bags (60kg bag). Vietnam’s statistics office estimates July coffee exports at 396kt — a
sharp jump of 287% YoY from 102.4kt a year earlier. This leaves cumulative coffee exports at 1.31mt over the first seven
months of the year, up 21% YoY. Softs Russia-Ukraine Precious metals Persian Gulf Natural gas Middle East war LNG Iran
conflict Coffee Content Disclaimer This publication has been prepared by ING solely for information purposes
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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 - Deja-vu for oil markets? Metals - Lower oil prices support gold rebound
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