The Commodities Feed: Focus Shifting Back to Tariffs
Energy markets are currently seeing stable oil prices, benefiting from a de-escalation in Middle Eastern tensions, particularly the ongoing ceasefire between Israel and Iran. Nuclear discussions between the US and Iran are also anticipated to continue next week, as indicated by President Trump. However, skepticism remains regarding the effectiveness of these negotiations.
If the ceasefire remains intact, market attention is likely to shift towards other critical factors, such as global trade relations. US Secretary of Commerce Howard Lutnick announced that a trade agreement between the US and China has been finalized, following discussions in Geneva last month. He is optimistic about reaching additional agreements with ten major trading partners soon, a positive development ahead of the upcoming reciprocal tariff deadline on July 9.
Attention will also turn to OPEC’s decisions on production levels for August during their meeting on July 6. Predictions suggest that the group will continue to unwind previous supply cuts and announce a production hike of 411,000 barrels per day. If this occurs without renewed disruptions in the Middle East, it could lead to an oversupply in the oil market by year-end.
Meanwhile, in Europe, refined product inventories in the Amsterdam-Rotterdam-Antwerp (ARA) region have declined, highlighting a tightening market despite a calm political landscape. European natural gas prices are experiencing a downturn, influenced by the steady buildup of EU supplies, which are running at levels similar to last year. Turning to metals, copper markets have witnessed renewed activity, with significant spikes in spreads on the London Metal Exchange (LME) amid dwindling stockpiles.
The increase in cash contracts above three-month futures indicates a tightening market ahead of potential US tariffs on copper imports, which could significantly impact future pricing dynamics. In agricultural news, Ghana’s Cocoa Board has revised its cocoa production forecasts downward due to adverse weather conditions and disease, signaling challenges in this critical commodity sector. Despite the decrease, production is still expected to rise year-on-year.