Market Insights - 11th January 2026

Oil

Oil climbed 2% on Friday (Jan 9th) as markets fretted over supply disruptions. Protests in oil-producing Iran and renewed conflict in Ukraine pushed Brent and WTI to $63 and $59 respectively.

The uprising in Iran is certainly keeping markets on edge, with worries over the country's oil output continuing to grow. The Middle Eastern country has seen escalating civil unrest, with protests gathering momentum. A nationwide internet blackout was enforced on Thursday (8th Jan) as a result of anti-regime protests in Tehran over economic hardships. Indeed, OPEC output fell by 100kb/d in December, with Iran (and Venezuela) posting the largest declines.

There have also been supply worries on the back of renewed conflict in the Russia-Ukraine war, with the Russian military on Friday reporting it had fired hypersonic missiles at Ukrainian targets, including energy infrastructure.

Still, oil inventories globally are rising, and oversupply continues to remain the key driver that could cap price gains. My view is that unless the situation in Iran escalates dramatically, any upside price swings will be relatively short-lived.

It has also been a busy week in the US. Crude stocks fell sharply (-3.8 million barrels for the week to Jan 2nd), to 419 million, which sits about 3% below the 5-year average. Refinery runs rose, but gasoline and distillate stocks built out, reflecting weak winter demand.

The real story though comes a week on from Washington's capture of Venezuelan leader Nicolas Maduro, bringing him and his wife to the U.S. to face criminal charges including narcoterrorism and drug trafficking allegations. With the Trump administration insisting it should control Venezuela's oil sales and revenue 'indefinitely' and use American companies to distribute the crude, the White House on Friday met U.S. refiners and traders to negotiate marketing up to 50 million barrels that state-run company PDVSA has accumulated in inventories amid a severe oil embargo. Oil major Chevron, as well as leading commodity trading houses Trafigura and Vitol, among others, are competing for government deals, and eyes will be on the outcome in the coming days.

Gas

Henry Hub natural gas prices fell $0.85 this week, to $3.11/MMBtu, as unusually mild weather and soft heating demand kept prices subdued.

U.S. LNG outflows remain robust. 38 LNG vessels departed U.S. terminals last week, capping a record 111 million tonnes exported in 2025. This export growth has helped to drain U.S. gas supply and support global markets. Gas-directed rigs fell to 125 in the latest Baker Hughes count, and U.S. working gas in storage stands about 31 Bcf above the 5-year average.

In Europe, the gas market is relatively tranquil. TTF winter gas is trading below €30/MWh (the lowest this season), even after a cold snap drained storage from 88% to 79%, though still well above recent lows. Abundant LNG (mostly from U.S.) imports have eased fears, with traders comfortably assuming that "gas will be there" this winter.

Power

This week, Storm Goretti pounded northern Europe. Almost 400,000 homes lost power in France, and two reactor's at EDF's Flamanville plant were shut down after grid damage. The UK and Germany also saw outages and transport chaos. These outages briefly lifted wholesale power prices across Western Europe.

Europe's thermal coal use rose last year, with EU imports jumping 6% in 2025 as weak renewable output drove coal demand higher. Traders say that coal demand should ease in 2026 as wind/solar rebound. Global coal prices and stocks may fluctuate with Asian demand and coal snaps, but Europe's gas-for-coal swing remains a key factor.

Why did Europe experience weak renewable output in 2025? Firstly, the continent saw exceptionally low wind speeds in early 2025, massively reducing wind power generation. Hydropower also fell in many regions due to dry conditions and low precipitation. Even where renewables were producing, transmission constraints and limited storage created bottlenecks, meaning output couldn't be used. One bright spot was solar, where production grew, but it did not fully make up for the decline in wind/hydro generation.

From a market reform standpoint, European power markets are adapting to global trends. For example, ICE exchange will extend EU gas/power trading hours (to match U.S. Henry Hub) starting February 2026, reflecting the growing interdependence of gas, power and LNG markets.

Metals

Copper this week hit fresh record highs ($13,000/ton). Supply fears have intensified, with strikes, accidents (e.g. Grasberg in Indonesia) and years of mines running at capacity pushing prices higher. With limited new mine investment, and continued strong demand for its role in EVs and data centres, prices show no sign of slowing down just yet.

Precious metals are also breaking records. Spot gold is around $4,500/oz (nearly 65% above year-earlier levels). It rose this week driven by U.S. dollar softening, Fed rate-cut expectations and geopolitical risk. The U.S. raid of Venezuela and Iranian unrest have boosted safe-haven buying. Silver hit a one-week high at $80.68 and is up 10% over the past week.

Biofuels

In the U.S., the big story is the Renewable Fuel Standard (RFS). The EPA now expects to finalise 2026-27 biofuel blending quotas in Q1 2026, after delays. This prolonged uncertainty is frustrating refiners, bio producers and farmers, since it delays contract-making and investment decisions.

The proposed rule (from 2025) would significantly raise targets for cellulosic and advanced biofuels (like biodiesel) while tightening rules on imports. Oil refiners lobby for lower mandates and easier access to imports, whereas biofuel advocates press for higher domestic blending volumes. The final balance of 2026 quotas will directly affect ethanol and biodiesel supply/demand and RIN credit prices, once finally announced.

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