The Week in Commodities

Oil is flowing, and natural gas might be starting to follow suit. October looks a lot like April, with delivered crude prices back at their spring highs and European refinery margins turning negative again, but this time the cause is the cost of moving crude rather than a shortage of it. Hormuz flows jumped from about 7.5 mbd in July and August to 12 mbd, leaving 766 of the 923 VLCCs in the global fleet in active use, while around 124 Iranian VLCCs remain effectively off the market due to US sanctions. Diesel prices hit record highs, prompting the G7 to agree to release 100 million barrels of crude and diesel from emergency stocks over four months, though the package mostly completes the March release rather than adding new supply. On metals, China base metals de-stocking continued, with copper inventories down a modest 16kt, aluminium down 40kt and zinc down 12kt;