19th June 2025
*Coal*
It was another predictably volatile session across energy markets. European gas and oil prices opened stronger, with momentum building throughout the day. Gas prices surged into the close, with front-month contracts gaining around 7%, while Brent crude rose approximately 2% as geopolitical tensions in the Middle East deepened and rhetoric from global leaders escalated. Coal markets were mixed, with NEWC swaps trading lower for much of the session before being pulled higher late in the day by strength across the broader energy complex.
*Brent Crude*
Oil hit a fresh five-month high on Thursday as tensions between Israel and Iran escalated further. Reports of an Iranian missile striking an Israeli hospital and retaliatory Israeli attacks on Iran’s heavy-water reactor pushed risk premiums higher. As the conflict entered its seventh day, U.S. President Donald Trump is reportedly weighing direct military involvement to dismantle Iran’s nuclear programme. According to the Wall Street Journal, Trump has approved a strike plan but hasn’t decided to act. Separately, the U.S. dollar remained under pressure amid economic uncertainty, lending support to commodities. August Brent crude rose 2.26% to $78.41/bbl by 16:00 BST.
*European LNG (Dutch TTF Gas)*
European gas futures jumped to €41.37/MWh—up nearly 6% and the highest in over 10 weeks—on fears that worsening Middle East conflict could impact global LNG flows. While Europe’s storage is comfortable for now, its dependence on Qatari LNG makes it vulnerable to disruptions at the Strait of Hormuz, a chokepoint for about 20% of global LNG. Though Qatar reports normal traffic, market nerves persist, especially after President Trump urged evacuation of Tehran and ruled out diplomacy. Hotter-than-average weather across Europe has also driven up demand for cooling, compounding the price rally.
*Iron Ore*
Iron ore continued its downward slide, with futures posting a sixth straight daily decline. China’s construction slowdown—exacerbated by seasonal rains in the south and heatwaves in the north—has dented demand, while ongoing turmoil in the property market weighs heavily on sentiment. May steel output dropped 6.9%, reflecting Beijing’s continued push to curb overcapacity. Broader geopolitical risks and the prospect of U.S. military action in Iran further sapped market confidence. SGX TSI 62% Fe futures were last seen at $93.15/mt at 16:03 BST.
*Copper (LME)*
Copper held relatively steady as traders balanced geopolitical risk with tight supply fundamentals. LME inventories have dropped more than 60% since March to 107,350 tonnes—the lowest since May 2024—supporting prices even as demand-side concerns grow. While near-term supply remains constrained, any prolonged rise in energy costs could hurt downstream consumption. Meanwhile, the Fed held interest rates steady on Wednesday and signalled a cautious path forward, with the dollar strengthening modestly. LME 3-month copper was down 0.53% to $9,603.50/mt by 16:01 BST.
#Commodities #Oil #NaturalGas #IronOre #Copper #Geopolitics #Markets #EnergySecurity #MiddleEast #LNG #Trading #MacroInsights
