2nd May 2025
*Brent Crude*
Oil prices came under renewed pressure on Friday despite signs of easing tensions between the United States and China, as expectations of rising supply weighed heavily on sentiment. OPEC+ continues to unwind its 2.2 million barrels per day of voluntary production cuts, with additional volumes expected to hit the market in May. Brent crude is down around 18% over the past month amid sweeping U.S. tariffs on key trading partners, including a 145% tariff on Chinese imports. While Beijing has so far declined direct talks, its Commerce Ministry indicated on Friday that it is reviewing a U.S. proposal for negotiations, provided Washington withdraws its “arbitrary” trade levies. This hint of diplomacy helped Brent rebound toward $63 earlier in the session, bolstered further by President Trump’s threat of secondary sanctions on buyers of Iranian oil. Nonetheless, macroeconomic headwinds persisted, including a U.S. GDP contraction and China’s steepest factory slowdown since 2023. Brent crude for June delivery was last down 1.7% to $60.67 per barrel, heading for a weekly decline of roughly 5%.
*Dutch TTF Gas*
European natural gas futures jumped over 4% on Friday to €33.45/MWh, buoyed by cooler weather forecasts in north-west Europe and renewed optimism surrounding U.S.-China trade negotiations. After trading flat for much of the week, the market responded positively to signs that Beijing may consider reopening talks with Washington. Weekly gains now stand at 1.9%. On the fundamentals side, cooler temperatures are expected to lift heating demand in the coming days, while policy discussions in the EU are shifting focus toward reduced storage targets. Proposed changes suggest end-of-summer gas storage levels of 82–83 bcm (around 75%–76% full), well below recent years’ norms. Current EU storage sits at 39.5% full.
*Copper*
Copper prices surged on Friday, supported by tightening physical supply and renewed hopes for de-escalation in U.S.-China trade tensions. LME three-month copper rose over 2% to $9,386/mt, extending gains seen earlier in the week. Analysts at Morgan Stanley pointed to rising premiums, tighter time spreads, and falling inventories outside the U.S. as signs of a tightening market, following earlier stockpiling in the U.S. ahead of incoming tariffs. While fundamentals remain strong in the near term, demand risks persist for the second half of the year as global growth slows under the weight of protectionist policies. China’s April manufacturing data showed the sharpest contraction in over two years, compounding concerns. Nevertheless, Friday’s optimism followed Beijing’s statement that it is assessing a U.S. proposal for talks, raising the possibility of lower tariffs and improving trade flows. Meanwhile, LME inventories fell further, with significant withdrawals from Taiwan reported by Bloomberg.
