Weekly Insights - 19th October 2025

Shipping

The International Maritime Organisation (IMO) pushed back the adoption of its Net-Zero Framework (NZF) for the shipping industry by one year. The decision followed a split vote among member states (57 votes for postponement, 49 votes against, 21 abstained).

The framework, intended to guide international shipping toward net-zero by 2050, had been scheduled for adoption this week with entry into force in early 2027. The postponement reflects ongoing differences among member states, with the framework coming under relentless pressure from a US-Saudi-led coalition. The Trump administration reiterated its threat against IMO member states supporting adoption of the framework, arguing the framework poses "significant risks to the global economy" with shipping costs increasing "by as much as 10% or more"

Oil

This week, crude prices moved in a tight range on mixed signals. By mid-week, Brent slid below $62 as the IEA forecasted a record-breaking 4 million barrels a day oil glut for 2026. Brent closed the week around $61.3 and WTI at $57.5, leaving oil down about 3% for the week.

U.S. crude stocks unexpectedly rose (+3.5M vs +0.3M expected) for the week ending October 10th, and OPEC+ continue their modest output hikes. Futures curves have flattened, suggesting traders see plentiful near-term supply. In fact, the WTI contract is now in backwardation in just its first two monthly contracts, with the entirety of the curve otherwise in contango. Generally speaking, contango signals abundant immediate supply, with immediate (spot) delivery being cheaper. The graph below shows how the WTI forward curve has changed over the past year:

Credit: Javier Blas (Bloomberg)

Over 1 billion barrels have been amassed on the global tanker fleet, according to Vortexa. This represents the biggest flotilla of oil-in-transit since 2020. This gives credence to what many already expect - surging production will push the market into surplus. China has kept the excess hidden for months by scooping up cheap barrels for its strategic reserves, but with November-loading crude cargoes from the Middle East starting to go unsold and oil futures sinking to five-month lows, we can say the impending oil glut is finally here.

Geopolitics also added to volatility. The UK announced a range of new sanctions on Russia's Rosneft and Lukoil, who together account for over 50% of Russian crude output. Companies that help move Russian barrels have also been targeted, aiming to hurt Putin's war chest. As many as 44 shadow fleet vessels were also targeted. The sanctions could result in more friction moving cargoes, resulting in re-routing and higher logistics costs, that could feed into fuel prices. In other news, Trump claims that India will soon stop buying Russian oil, and the US will now seek to persuade China to halt its Russian crude imports.

Gas & Power

Natural gas markets were relatively subdued amid ample supplies. U.S. storage is well above average (3,721 Bcf after a 80 Bcf injection to October 10th) and Henry Hub prices were around $2.80/MMBtu by mid-October.

In Europe, the energy tussle with Russia continues. The EU parliament backed moving up the Russian gas phase-out to 2026 (previously 2027) for most sectors. EU storage was 82% full entering winter, low for this time of year, but still above 2021/22 levels.

Gas flows to Ukraine also drew headlines, as US LNG exporters are negotiating extra cargoes to help Ukraine replenish supplies ahead of winter, following repeated Russian attacks on Ukrainian gas infrastructure.

Metals

Precious metals surged on safe-haven demand. Gold blasted through record after record, briefly topping $4,378/oz on Friday, driven by U.S. trade-war uncertainty and Fed rate-cut expectations. Several Analysts now expect gold to hit $5,000/oz in 2026. Silver also set new highs ($54.47/oz) on tight spot supply and robust ETF inflows. Platinum and Palladium climbed too.

Base metals were mixed. Copper has eased from its recent peak of $11,000/ton down to $10,600/ton after Trump threatened higher tariffs on China. Analysts warn that demand is the wild card (China stimulus could lift copper, but otherwise inventories remain significant). Analysts generally see copper moderating between $10-11k in 2026/27 after the recent rally. Aluminium prices remain elevated due to U.S. tariffs, and oversupply is emerging for nickel and lithium. Zinc markets are especially tight in the West, with LME stocks falling to just 41,000t (less than a day's global demand), with premiums surging. Much of the metal however is hoarded in China, keeping prices buoyant.

Biofuels

Bio markets saw only incremental developments. In shipping fuel, European biodiesel (B100) is notably cheap, remaining the cheapest option for conventional ships in the EU, reflecting surging vegoil supplies and mandates.

U.S. policy is in flux. The EPA is rumoured to propose that large refiners will shoulder only part of the biofuel blending waived under the SREs (roughly 50% of 1.1bn gallons). That plan (to be finalised by Oct 30th) could stabilise RIN prices, but frustrate biofuel producers.

U.S. ethanol production rose to a 5-week high, with stocks falling to a 1-month low. Soybean oil (a biodiesel feedstock) is under pressure from U.S. exports losing out to Brazil, keeping biodiesel margins tight.

In the EU, 2025/27 renewable fuel targets (RED III) have been agreed by legislators, and trading activity suggests that traders are clearing stocks ahead of new rules next year. In Asia, Vietnam plans to mandate E10 fuel next year, opening a new ethanol market.

Ags

Grain markets were dominated by supply-glut news and trade disruptions. U.S. farmers continue to "fly blind" amid the fed shutdown that has halted USDA crop reports. Nevertheless, all signs point to record outputs. The USDA in September projected a record U.S. corn crop (16.8 billion bushels) and stocks up 59% to a 7-year high.

This huge corn supply will pressure prices. U.S. corn futures traded near $4.20/bu and are expected to fall lower as harvest wraps. Soybeans are similarly burdened, with weak exports as China almost entirely purchasing beans from South America this season.

Brazil's record soybean harvest (over 170mt) is flooding the global market, with Brazilian exports through October running at record pace, with China taking 80-95%.

Macro & Outlook

Global economic and policy news added to the commodity narrative. The IMF reported the world economy is "better than feared" but warned of mounting uncertainties. Trade tensions dominated - Trump's fresh tariff threats against China (and comments on India-Russia oil) have raised the risk of a new trade front.

The ongoing U.S. government shutdown has silenced key data, limiting transparency in markets. Investors now price in nearly 100% odds of a 25bp rate cut in October, and again by December. A firm dollar on Friday (Oct 17th) led to a pullback in gold from its highs.

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