RT Charlie Bilello (@charliebilello)Price increases since the start of the Iran war...European Natural Gas: +85%Heating Oil: +80%Brent Crude Oil: +54%Urea: +48%WTI Crude Oil: +46%Gasoline: +44%Diesel: +42%Sulfur: +25%Coal: +24%Fertilizer: +23%Palm Oil: +13%US Natural Gas: +8%Iron Ore: +7%Rice: +7% ...

Oil extended gains to more than 10% following attacks on some of the Middle East’s most important energy facilities, raising concerns of an escalating impact from the almost three-week-old conflict that has no end in sight. Brent spiked past $118 a barrel, while the region’s diesel benchmark was trading north of $180 a barrel at the highest level in almost four years. European natural gas rose as much as 35%. Most Read from Bloomberg Iran attacked a major LNG site in Qatar, one of several energy asset ...

Economic Indicators - The dollar index rose by +0.97% on Monday, reaching a 5-week high, driven by a surge in oil prices to an 8.25-month high, which boosted inflation expectations and reduced the likelihood of additional Fed rate cuts [1] - The US February ISM manufacturing index fell by -0.2 to 52.4, which was stronger than the expected 51.5, while the ISM prices paid sub-index increased by +11.5 to a 3.5-year high of 70.5, exceeding expectations of 60.0 [2] Currency Movements - The EUR/USD fell by -1.08% on Monday, marking a 5-week low, as the dollar's strength negatively impacted the euro, compounded by a significant decline in German retail sales and a surge in European natural gas prices [4] - German retail sales in January fell by -0.9% month-over-month, the largest decline in 19 months, which was weaker than expectations of no change [5] - The USD/JPY rose by +0.89% on Monday, with the yen dropping to a 3-week low against the dollar due to rising crude oil prices and higher T-note yields [5] Market Expectations - Swaps markets are pricing in a 2% chance of a -25 basis point rate cut by the Fed at the upcoming policy meeting on March 17-18, while the FOMC is expected to cut rates by about -50 basis points in 2026 [3] - The ECB is anticipated to leave rates unchanged in 2026, with only a 1% chance of a -25 basis point cut at its next meeting on March 19 [5]

Stocks slid, while gold and crude oil soared, after the US and Israel launched widespread strikes on Iran. The US dollar spiked, while Treasuries sold off modestly. To get more articles and chart analysis from MoneyShow, subscribe to our Top Pros’ Top Picks newsletter here.) Over the weekend, President Trump ordered missile, fighter, and bomber strikes on a wide range of Iranian targets. Israel joined the attacks, which killed Iran’s Supreme Leader Ayatollah Ali Khamenei and several other military and po ...

Core Insights - European natural gas prices are experiencing their largest monthly increase in at least two years, driven by a cold wave and rapid depletion of fuel inventories [1] - The benchmark futures saw a slight increase on Friday, leading to an approximate 38% rise for the month, marking the largest monthly gain since summer 2023 [1] - If the upward trend continues, prices could reach new highs not seen since the energy crisis four years ago [1] Supply and Demand Dynamics - Despite a rebound in U.S. exports alleviating some supply concerns, parts of Europe are expected to face severe cold weather and increased demand in early February [1] - Analysts from Energy Aspects, led by James Waddell, indicate that with inventories at seasonally low levels, price risks remain skewed to the upside [1] Market Volatility Factors - Recent instability in weather forecasting models has contributed to increased volatility in gas prices [1] - Traders are closely monitoring the situation in Iran, as escalating threats from U.S. President Trump are creating tension across the energy market [1]

Key Insights - European natural gas inventories have fallen below the five-year average, with current levels over 20% lower than this benchmark, equating to a shortfall of approximately 17 billion cubic meters [1]

Summary of Key Points from the Conference Call Industry Overview - **Industry**: Global Commodities - **Key Focus**: Oil and Natural Gas Markets, Commodities Price Forecasts Core Insights and Arguments 1. **Oil Demand Growth**: Global oil demand expanded by 520 thousand barrels per day (kbd) year-over-year in September, with visible global liquids stocks rising by 72 million barrels (mb) [2] 2. **Ukraine's Strategic Shift**: Ukraine has intensified attacks on Russian energy infrastructure, indicating a strategic shift that could impact global energy markets [1] 3. **Fed's Rate-Cutting Cycle**: The Federal Reserve's cutting cycle began, historically leading to positive returns in commodities. Commodities averaged +15% returns nine months after similar cycles in 1995 and 2024 [5] 4. **Recession Risks**: Recession risks are elevated at 40%, with potential negative impacts on commodities if offsetting Chinese stimulus is not present [5] 5. **Inflation Concerns**: The risk of renewed inflation is high at 45%, particularly in the US, which may affect commodity prices [5] 6. **Natural Gas Storage Trends**: Weekly storage injections for natural gas are expected to be in the range of 70-90 Bcf through mid-October, with a preliminary estimate of a 73 Bcf injection for the upcoming report [9] 7. **Base vs. Precious Metals Performance**: There is a notable divergence in performance between base and precious metals following the first rate cut, with precious metals generally performing better [9] 8. **US Crude Output Resilience**: US crude output has remained resilient, averaging close to 300 kbd year-over-year from January to August 2025, with no significant pullback in operator activity [12] 9. **Permian Basin Activity**: Permitting data shows no signs of a slowdown in activity in the Permian Basin, with permit volumes 6% higher than the previous year [12] Additional Important Insights 1. **Global Commodity Open Interest**: The estimated value of global commodity market open interest surged to a 2025 year-to-date high, increasing by 4.1% week-over-week to $1.59 trillion [11] 2. **Natural Gas Market Dynamics**: Solar energy generation is significantly impacting realized and forecast gas-fired power generation, especially during the shoulder season [9] 3. **Metals Market Trends**: Industrial metals are lagging behind precious metals, with base metals like aluminum, zinc, and nickel consistently underperforming compared to copper [9] 4. **Price Forecasts**: Forecasts for WTI crude and Brent crude prices are projected to decline to $57 and $61 per barrel respectively by Q4 2025 [13] This summary encapsulates the critical insights and trends discussed in the conference call, providing a comprehensive overview of the current state and future outlook of the global commodities market.

Investment Rating - The report does not explicitly provide an investment rating for the industry discussed Core Insights - The report highlights the potential for energy prices to rise again due to geopolitical risks in the Middle East, particularly if Iranian oil supply declines or if there are disruptions in the Strait of Hormuz [1][2] - It discusses the implications of soft data on the US economy, indicating that higher tariffs may lead to a slight increase in unemployment and below-potential GDP growth, with inflation rebounding to the mid-3% range [9] - The report emphasizes the outlook for the Chinese Yuan (CNY), predicting further appreciation due to the strength of China's export sector and the currency's undervaluation against the Dollar [10][12] - It notes the expected increase in defense spending in the Euro area and the UK, projecting spending to rise to 2.7% and 2.5% of GDP respectively by 2027 [14] - The potential disruption of profit pools due to AI technology is also highlighted, with past technology transitions serving as a precedent for significant market changes [14] Summary by Sections Middle East Risks - The report indicates that while the initial market reaction to the Iran-Israel ceasefire has reversed, the situation remains uncertain, with potential for energy prices to rise significantly if Iranian oil supply is disrupted [1][2] - It estimates Brent crude oil prices could peak at around $90/bbl under certain scenarios, with extreme cases exceeding $110/bbl [1][6] Soft Data Insights - Company commentary suggests a reduction in job openings and capital spending expectations, indicating a cautious outlook due to policy uncertainty [9] - The report anticipates a slight increase in unemployment and a one-time inflation rebound, with the Federal Reserve expected to implement rate cuts [9] CNY Outlook - The report lowers USD/CNY forecasts to 7.10/7.00/6.90 for the next 3, 6, and 12 months, citing the potential for CNY appreciation [10][12] European Defense Spending - The report expresses optimism regarding the European defense renaissance, with expected increases in defense spending by 2027 [14] AI Disruption - The report discusses the potential for AI to disrupt existing profit pools, drawing parallels to previous technology transitions [14]

Investment Rating - The report maintains a firm floor for Brent crude prices in the range of $55-60 and WTI prices in the range of $50-55 [5] Core Insights - Global oil demand increased by 400 thousand barrels per day (kbd) in May, averaging 103.6 million barrels per day (mbd), although this was 250 kbd below expectations [5] - Total liquid inventories globally built by 10 million barrels (mb) in May, with crude oil stocks rising by 3 mb and oil product inventories increasing by 7 mb [5] - The report anticipates a 2.6 mbd surplus in crude oil by the fourth quarter of 2025, driven by rising OECD inventories and a flattening crude curve [5] Oil Market Analysis - Front-month crude prices remain resilient despite accelerated OPEC supply hikes [5] - Five conditions are identified for crude prices to reflect year-end weakness, with expectations that only two will occur: a surge in OECD inventories and a flattening crude curve [5] - Limited potential for run increases due to refinery closures in the US and Europe, capacity constraints in Russia, and export restrictions in China [5] Agricultural Market Insights - The USDA's June 12 WASDE report is viewed as a major bullish event risk for CBOT Corn prices, with a significant increase in US corn export targets [6] - US wheat export sales remain competitive, prompting an increase in old crop US wheat exports [6] - A tighter US cotton balance is expected due to rising export demand [6] Natural Gas Market Dynamics - The European natural gas market is influenced by supply factors following the decline in Russian pipeline flows, with a focus on demand dynamics [7] - The report introduces a European natural gas demand and storage tracker to monitor weekly demand and storage dynamics in key regions [7] LNG Trade Forecast - Global LNG trade in May 2025 reached 47.4 billion cubic meters (Bcm), with a year-to-date volume of 244.8 Bcm, reflecting a 3.4% year-over-year increase [8] - The forecast anticipates a growth of around 5% in global LNG trade for the full year 2025, reaching 589 Bcm [8] Commodity Market Positioning - The estimated value of global commodity market open interest declined by 3% week-over-week, driven by outflows in the gold market and weakness in energy prices [9] - Cumulative flows for 2025 have returned to 10-year average levels [9] Rig Activity Trends - The downward trend in US rig activity continues, with a decrease of nine oil rigs this week, particularly in the Permian and Eagle Ford basins [10] - The pace of rig attrition in the Permian is surpassing earlier projections, leading to a downward revision of 2025 Permian crude and condensate output [10] Price Forecasts - The report provides quarterly and annual price forecasts for various commodities, including WTI and Brent crude, natural gas, base metals, and precious metals [13]