📉 Commodities Market Update

Market Overview:
- Oil prices fell in early European trading, even after the American Petroleum Institute (API) reported a drawdown in U.S. crude inventories.
- ICE Brent and NYMEX WTI both declined after a 3-day rally.
API Inventory Report (U.S.):
- Crude Oil: ↓ 3.4 million barrels (vs. market expectation of a +1.07 million barrel build)
- Gasoline: ↓ 700,000 barrels
- Distillates: ↑ 1.9 million barrels
Interpretation:
- The draw in crude oil and gasoline suggests stronger demand or reduced supply.
- However, the increase in distillate stocks sends mixed signals about overall energy consumption trends.
Geopolitical Factors:
- Ukraine claimed an attack on Russia’s Saratov refinery, which has a processing capacity of ~140,000 barrels/day.
- This refinery supplies gasoline and diesel to western Russia.
- The strike could support oil prices at lower technical levels, acting as a floor.
Next Data Point:
- The U.S. Energy Information Administration (EIA) is scheduled to release its official inventory data later today.

Aluminium (LME):
- Price closed above US$2,700/ton, the highest since 20 February 2025.
- Driven by:
  - Rate cut expectations from the U.S. Federal Reserve
  - A weaker U.S. Dollar (now at its lowest level since 2022)
Tom-Next Spread:
- Aluminium tom-next spread rose to a premium of US$13.25/ton (highest since August 2024)
- This shift from prior contango indicates:
  - Rising physical demand
  - Tighter LME inventories
Inventory Data (as of 16 September 2025):
- Total LME stocks: ↓ 1,500 tonnes to 483,375 tonnes
- On-warrant stocks: 375,025 tonnes (lowest since 7 July 2025)
Speculative Positioning:
- COTR Report (as of 12 September):
  - Net long positions in aluminium: ↑ 4,562 lots to 131,922 lots (highest since 7 June 2024)
  - Copper: Net long ↑ by 2,597 lots → 56,390 lots (3rd straight week of increase)
  - Zinc: Net long ↓ by 1,654 lots → 33,066 lots

Soft Wheat:
- Production forecast: 33.3 million tonnes (mt)
  - ↑ 30% year-on-year
  - ↑ 4.7% above the 5-year average
- Driven by increased harvested area
Corn:
- Production forecast: 13.4 mt
  - ↓ from previous estimate of 13.7 mt
  - ↓ 8% year-on-year
  - Lower output due to summer heat waves and drought
Durum Wheat:
- Forecast unchanged at 1.3 mt
- In line with previous estimates

Commodity	Trend / Event	Key Insight
Oil	Prices down despite inventory draw	Mixed signals from distillate data, geopolitical support possible
Aluminium	8th day of price gains, tight physical market	Strong demand + Fed policy expectations driving rally
Copper	Bullish positioning increased	Positive sentiment continues
Zinc	Bullish positioning decreased	Mild reversal
Soft Wheat	France ups production forecast	Improved harvest area
Corn	Forecast lowered due to drought	Weather impacts yield
Durum Wheat	Forecast unchanged	Stable outlook