The Commodities Feed: Oil gains on uncertainty around Russian oil

Oil prices moved higher today, with both ICE Brent and NYMEX WTI trading just shy of a 2% gain on the day. The rise comes after reports that the European Union is exploring new sanctions on Russian banks and energy companies as part of its latest measures to end the war in Ukraine. Meanwhile, OPEC+ agreed to increase output by 137k b/d in October, much lower than the hikes implemented over the previous months. The group raised output by around 550k b/d in both August and September 2025. The slowdown in incremental volume from the group should help trim the expected market surplus.

Trade data released this morning from China for August showed a rebound in crude oil imports. Crude oil flows increased by 4.9% month-on-month and 0.8% year-on-year to 49.5mt (about 11.65m b/d) last month, as both state-owned refineries and independent refineries continued to operate at high rates. This leaves cumulative imports so far this year 2.5% higher YoY. Imports have been stronger as the maintenance season is finally over and refiners took even more cargoes in August.

The US oil rig count expanded for the second straight week, increasing by two to 414 active rigs last week, according to Baker Hughes data. Rig activity increased despite crude prices heading for a weekly fall amid speculation about a further output increase by several oil-producing nations.

The latest positioning data shows that speculators bought 44,511 lots of ICE Brent for a second straight week over the last reporting week, leaving them with a net long position of 251,054 lots, a move predominantly driven by fresh buying. Similarly, for NYMEX WTI, speculators increased net longs by 3,062 lots to 27,287 lots. The rise comes after four consecutive weeks of decline, taking net positions to the lowest since January 2007 in the preceding week. Money managers boosted bullish bets on crude oil amid tightness in the US market and geopolitical risks.

China’s central bank continued to add gold to its reserves for a tenth straight month in August. The People’s Bank of China added 60,000 troy ounces (about 1.9 tonnes) of gold to its reserves, taking the total to 74.02 million troy ounces (around 2,302.3 tonnes). China has purchased a total of 1.22m troy ounces (about 38 tonnes) since restarting its purchases in November 2024, as the People's Bank of China continues to boost its gold reserves amid geopolitical uncertainties. Global central banks have slowed their gold purchases as prices have hit record highs, but ongoing geopolitical tensions are expected to sustain demand, according to the World Gold Council. Gold has rallied to fresh record highs in recent days, climbing above $3,600/oz amid bets on US rate cuts and concerns over the Federal Reserve's independence.

Meanwhile, China released its preliminary trade data for metals this morning, showing strong domestic demand for industrial metals. Imports of unwrought copper rose 1.2% YoY to 425.1kt in August. However, cumulative copper imports are still down 2.2% YoY to 3.5mt in the first eight months of the year. Uncertainty over US tariffs on copper imports shifted supply from China to the US in the first half of the year. This trend may reverse in the second half, as Trump has delayed plans for a 50% tariff on refined copper for now. Meanwhile, copper concentrate imports increased by 7.4% YoY (+7.8% MoM) to 2.8mt as strong domestic refined output boosted demand for raw materials. On a year-to-date basis, imports of copper concentrate rose 7.9% YoY to 20.1mt. In ferrous metals, iron ore imports rose 3.8% YoY (+0.7% YoY) to 105.1mt in August. However, cumulative iron ore imports are still down 1.6% YoY to 801.6mt in the first eight months of the year, due to China’s continued efforts to eliminate industrial overcapacity.

On the export side, China’s unwrought aluminium and aluminium products shipments fell over 9.6% YoY (-1.2% MoM) to 533.5kt, while exports of steel products rose marginally annually to 9.5mt last month.

Meanwhile, the latest positioning data from the CFTC shows that speculators increased their longs of COMEX copper by 7,014 lots for a fourth consecutive week to 34,651 lots as of 2 September. The move was largely driven by rising gross longs by 6,436 lots to 46,443 lots over the reporting week. In precious metals, managed money net longs in COMEX gold increased by 20,740 lots for a second straight week to 168,862 lots over the reporting week. Similarly, speculators increased the net longs of silver by 6,817 lots for a third consecutive week to 41,022 lots as of Tuesday, following an increase in gross longs by 3,816 lots to 53,117 lots. Money managers have been raising their net long exposure to precious metals recently, following changes in expectations for Federal Reserve interest rate cuts this month.

Recent trade numbers from China Customs show that China’s soybean imports rose 1.1% YoY (+5.2% MoM) to 12.3mt in August. The rise in imports was largely driven by an increase in shipments from South America (Brazil & Argentina), to diversify the supply source and reduce reliance on US farm products.

The latest CFTC data shows that money managers increased their net short position in CBOT wheat by 356 lots to 81,943 lots as of 2 September. In contrast, speculators decreased their bearish bets in corn by 19,199 lots for a third consecutive week to 91,487 lots. The move was dominated by rising long positions with gross longs increasing by 10,288 lots to 248,214 lots. For soybeans, the net speculative long position fell by 8,854 lots to 11,964 lots, following an increase in gross shorts by 6,993 lots to 89,947 lots.