1st October 2025
Commodity markets began the month on a softer footing, with oil and coal both under pressure, European gas steady, and copper supported by supply disruptions and long-term investment flows.
Coal
Coal swaps weakened further, with the shorter-dated Newcastle contracts leading declines despite relative steadiness in the physical market. API2 also eased, pressured by slightly better offers in the physical DES ARA market. European gas prices held broadly stable, while oil extended recent losses but traded with less volatility than in previous sessions.
Brent Crude
Brent crude touched $65.08/bbl, its lowest in seven weeks, as expectations of faster OPEC+ supply hikes weighed on sentiment. The group meets Sunday to discuss raising production by 500,000 bpd per month over the next quarter, despite warnings from major forecasters that the market is already oversupplied. The IEA projects record surpluses next year, while TotalEnergies flagged a Q1 glut. Additional pressure came from U.S. production, which hit a record 13.6m bpd in July.
Traders remain sceptical the full OPEC+ increase will be delivered, with Saudi Arabia cautious about capacity limits. Russia’s extension of its gasoline export ban and partial diesel ban offered only marginal support, as measures were anticipated and narrowly targeted. On the geopolitical front, Ukraine’s continued strikes on Russian energy infrastructure keep risk premiums alive, while in Washington the U.S. government entered shutdown mode after failure to reach a funding deal—stalling key economic data releases, including September’s jobs report.
Spot Brent at 16h42 BST – $65.45/bbl, down 0.88%
European LNG
European natural gas futures traded around €31–€33/MWh, more than 40% below February’s peak of €58, with volatility back to pre-crisis levels as strong storage injections ease winter concerns. EU inventories stand at 82.3% capacity, with France and Italy above 90% and Germany at 76.6%. Softer Asian demand, particularly from China, has freed up LNG cargoes for Europe, adding to downward pressure.
Political divisions remain, however, with the EU failing to agree on an accelerated ban of Russian LNG imports. Italy’s Energy Minister Gilberto Pichetto Fratin confirmed some states lack alternative supply routes, blocking consensus on earlier restrictions. The EU is still targeting a full phase-out by January 2028. U.S. President Trump has pushed for a faster timeline, linking it to broader measures against Moscow. Looking ahead, global LNG capacity is set to rise 60% by 2030—half from the U.S.—raising concerns of oversupply as traders expect demand to lag.
Dutch TTF Gas at 16h40 BST – €31.33/MWh, down 0.26%
Copper (LME)
Copper prices edged higher, supported by ongoing supply disruptions and long-term investment signals. Freeport-McMoRan’s Grasberg mine in Indonesia is expected to lose about 200,000 tonnes of output this year and 300,000 tonnes in 2026, equivalent to around 1.5% of global supply. Analysts estimate the shortfall will contribute to a 400,000-tonne market deficit by 2025.
On the supply side, BHP announced a $554m investment to expand its Olympic Dam operations in South Australia, part of a broader $10bn commitment over the next decade to boost output across Chile, Argentina, and the U.S. The company expects copper demand to rise 70% by 2050, reinforcing its role as a key growth driver.
LME 3-month copper at 16h30 BST – $10,360/mt, up 0.89%
Energy markets remain weighed down by oversupply signals, with OPEC+ output debates, record U.S. production, and weaker coal sentiment setting a cautious tone. By contrast, copper continues to benefit from supply shortfalls and new investment. With geopolitics and inventory trends in focus, volatility looks set to persist across the complex.
