Oil
- OPEC+ has agreed to increase crude oil production by nearly 550,000 barrels per day (bpd) in September, fully restoring output from prior voluntary cuts. It is important to note, that OPEC+ production is still theoretically constrained due to the demand slump caused by the Covid-19 pandemic.
- Bloomberg Intelligence suggests that with the current production increases from OPEC+, a global supply surplus could reach as high as 1 million bpd by the end of the year.
- Concurrently, concerns have emerged regarding a potential reduction in available supply from Russia. Donald Trump has threatened India with higher tariffs if it continues to buy Russian crude.
- Donald Trump stated that if a ceasefire between Russia and Ukraine is not agreed upon by Friday, tariffs will be imposed on countries that purchase Russian crude oil. Trump had previously threatened that such tariffs could be as high as 100%. However, it is unclear whether this would apply to entire countries or directly to companies involved in importing Russian oil. Currently, the main importers of Russian oil are China, India, and Turkey.
- In the absence of disruptions related to Russia or Iran, a surplus in the crude oil market could cause further downward pressure on prices, especially with a potential slowdown in demand growth due to trade restrictions.
- If supply is disrupted by significant tariffs or sanctions, a return of prices above $70 per barrel cannot be ruled out.
OPEC+ production volumes during periods of cuts. OPEC+ has restored production from voluntary cuts a year ahead of schedule. It’s also worth remembering that the current Covid-related cuts of 1.6-2.0 million bpd are also scheduled to expire in September 2026. Source: Bloomberg Finance LP
In the first half of the year, the oil market balance was not as unfavorable for prices as Bloomberg Intelligence initially expected. The firm now indicates, however, that the surplus could exceed 1 million bpd in the second half of the year. Source: Bloomberg Intelligence
OPEC production is rising, but not as quickly as implied by the assumptions for restoring production from voluntary cuts. Spare production capacity in OPEC remains high. Source: Bloomberg Finance LP
Short- and medium-term seasonality indicates consolidation in the crude oil market in the coming weeks. Source: Bloomberg Finance LP, XTB
Marine deliveries from Russian ports to Asian countries are approximately 3 million bpd. Source: Bloomberg Finance LP
In recent weeks, there has been a significant increase in speculative short positions in WTI crude oil. Source: Bloomberg Finance LP, XTB
Gold
- Following the release of US labor market data, which increased uncertainty about the American economy, the price of gold rose by more than 3%, returning above $3,300 per ounce.
- Expectations for interest rate cuts have increased significantly, with a greater than 90% probability now priced in for a rate cut at the September meeting.
- Amid uncertainty regarding US economic growth, inflation, and the independence of the Fed, Citi has raised its three-month gold price forecast to $3,500 from $3,300. The forecast for a horizon longer than three months has been raised from a range of $3,100-$3,500 to $3,300-$3,600.
- Gold demand in the second quarter dropped significantly, primarily due to a 14% year-on-year decline in jewelry demand, which totaled 356 tons.
- Total demand, excluding over-the-counter (OTC) transactions, was 1,079 tons, the lowest level since Q2 2024. At the same time, investment demand, as well as demand from ETFs and central banks, remains high, although it is slightly lower than a year ago or the previous quarter. The market is returning from a small deficit to a quarterly surplus of around 170 tons, which has been standard over the past few years.
Speculators have slightly pulled back from building long positions on gold, significantly reducing their holdings. Price consolidation continues and now exceeds the length of the consolidation that occurred at the turn of 2024 and 2025. Source: Bloomberg Finance LP, XTB
Demand, excluding OTC, has fallen sharply compared to the last quarter, but is slightly higher than in Q2 2024. Source: Bloomberg Finance LP, WGC, XTB
The four-quarter rolling sum of demand from central banks, investment demand, and ETFs has reached 2,600 tons, the highest level in history, justifying the high prices. Source: Bloomberg Finance LP, XTB
The amount of gold in ETFs is clearly growing. In terms of value, however, these are significantly higher amounts than in 2020. Source: Bloomberg Finance LP, XTB
Natural Gas
- Natural gas prices remain under pressure, largely due to lower-than-expected consumption during the cooling season.
- In recent days, gas consumption by gas-fired power plants has fallen below the five-year average.
- Inventories are now building again somewhat faster than the five-year average, which means that comparative inventories continue to rise.
- A significant increase in US gas production, along with a rise in the number of active drilling rigs, means that the potential for further surplus buildup in the gas market remains very high.
- On Monday, production reached 108.1 bcfd, up 3.5% year-on-year, while demand was 74.2 bcfd, down 8% year-on-year.
Net speculative positions in gas remain at an elevated level, but the number of short positions has increased slightly after the consolidation of recent weeks. Source: Bloomberg Finance LP, XTB
Comparative inventories continue to grow (inverted axis), which does not justify a price rebound related to seasonality. Source: Bloomberg Finance LP, XTB
Gas consumption by power plants (second chart) temporarily falls below the five-year average. Slightly higher temperatures are expected in the near future, so this is potentially the last chance for prices to rise during the summer. In September, potential price changes will depend on assessments of gas consumption at the beginning of the heating season. Source: Bloomberg Finance LP, XTB
Last week, natural gas production again rose to a record high. The number of active drilling rigs used for gas extraction is clearly increasing. Source: Bloomberg Finance LP, XTB
Natural gas prices are not currently experiencing the seasonal increases that have been visible in recent years and in the long term. Source: Bloomberg Finance LP
Coffee
- Increased expectations for coffee harvests in the upcoming seasons are putting further pressure on global market prices.
- An important factor for coffee will also be the situation regarding tariffs on Brazil, which could lead to a halt in US coffee imports. Trump indicates that if the case against former President Jair Bolsonaro for an attempted coup is dropped, severe tariffs will not be imposed on Brazil.
- It is worth noting that Brazil is one of the few countries with which the United States has a trade surplus.
- Donald Trump has threatened Brazil with tariffs of 50% for political reasons.
- Brazil is currently the largest supplier of coffee to the USA.
- The harvest in Brazil is already 90% complete. The five-year average indicates that at this time, harvests should be 84% complete.
- However, coffee production in Brazil for the 25/26 season is projected to be 63.9 million bags, a 2.1% year-on-year decrease. This is a forecast from the Coffee Trading Academy based on a survey of 622 farmers in Brazil.
- According to a USDA report, coffee production in the 2025/2026 season is expected to be 4.3 million bags higher than in the previous season, mainly due to a rebound in production in Asia and Africa.
Long positions have stopped falling, but speculators are now beginning to build an increasingly large short position. Source: Bloomberg Finance LP, XTB
The price premium in the US over the price in Brazil reached a record of nearly $40 per bag, the highest in over a decade. Higher prices in the US compared to Brazil were caused by fears of American tariffs. At this time, Brazil is threatened with a 50% tariff, which could potentially lead to a collapse in coffee imports from this region of the world. Source: Bloomberg Finance LP
Production in Asian and African countries is expected to increase. The USDA theoretically estimates that the market will be in a surplus for the second consecutive season. Source: Bloomberg Finance LP, XTB
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