Oil slid on expectations of looser supply, after Brent fell below $99/bbl and WTI traded near $89/bbl. Brent has dropped for six straight sessions, the longest losing run since August 2025, leaving it down more than 9.5% over that stretch, though still more than 60% higher year-to-date. Saudi Arabia restarted its East‑West pipeline, which bypasses the Strait of Hormuz and can carry around 7m b/d, supporting expectations of resumed exports from Yanbu. In the US, API data showed crude stocks rose 1.7m barrels versus expectations for a 578k-barrel draw, while gasoline and distillate each fell 2.2m barrels; attention turns to the EIA report. US gas firmed too, with Henry Hub above $3/MMBtu on lower Lower 48 output and cooler Northeast forecasts, though storm outages may cap demand.
In metals, China’s gold imports rose 39.3% year-on-year to 141.7 tonnes in August, lifting year-to-date inflows to a record 1,141.2 tonnes, up 72.2%; Chinese gold ETFs added about 44 tonnes through August, an 18% rise, while global ETF holdings were broadly unchanged. Copper extended to a sixth session of gains before a mild pullback, supported by tight China availability as Shanghai cathode inventories fell 14,700 tonnes to 43,900 tonnes. In Indonesia, Morowali Industrial Park output curbs could affect about 100,000 tonnes of nickel pig iron versus annual capacity of roughly 4.2 million tonnes. COTR data showed net bullish copper positions fell 3,981 lots to 42,132, aluminium net longs dropped 11,623 to 77,423, and zinc net longs fell 2,787 to 29,946. In agriculture, Ukraine’s grain and legume harvest reached 33mt as of 22 September, up 10%, with 7m hectares harvested (61%); wheat output rose 11% to 25.3mt, while corn reached 340kt from 68k hectares versus 389kt a year earlier.
Derivative Trading Recommendations: Energy, Metals, and Agriculture
We advise derivative traders to position for further near-term downside in crude oil by utilizing put options on Brent and WTI. With Brent breaking below the $99 mark and the Saudi East-West pipeline restoring up to 7 million barrels per day of bypass capacity, the immediate supply crunch is easing. We should closely watch today’s EIA inventory data to confirm the unexpected 1.7 million barrel build reported by the API, which could solidify this bearish momentum.
In contrast, we see short-term upside in US natural gas and recommend long call options on Henry Hub futures as prices push past $3/MMBtu. Lower production in the Lower 48 states, combined with autumn cooling trends in the US Northeast, is set to drive immediate heating demand. However, we must hedge these positions against potential storm-related power outages that could temporarily cap regional consumption.
For base metals, we suggest taking tactical long positions on nickel derivatives while remaining cautious on copper. The El Niño-induced drought in Indonesia is threatening to cut up to 100,000 tonnes of nickel pig iron production, creating a tight supply narrative. Meanwhile, despite record-low copper inventories in Shanghai of just 43,900 tonnes, net bullish copper positions have fallen for six straight weeks, suggesting we should wait for a clearer momentum signal.
Gold, Grain, and ETF Strategies
We highly recommend maintaining a bullish stance on gold derivatives, targeting long-term call options to capitalize on massive Asian demand. China’s year-to-date gold imports have surged by over 72% to a record 1,141.2 tonnes, proving that physical and ETF demand in the region remains insatiable. Historical data shows that strong physical premiums in Shanghai often precede global price rallies, making current dips highly attractive buying opportunities.
Finally, we recommend shorting wheat futures or buying put options in the agricultural sector over the coming weeks. Ukraine’s bumper harvest, with wheat production rising 11% year-on-year to 25.3 million tonnes, is actively flooding the market and easing global supply anxieties. This supply pressure, combined with seasonally high global harvest completions, will likely keep a heavy lid on grain prices.
