The World Is Burning Through Its Oil Safety Net -- Commodities Roundup

MARKET MOVEMENTS:

--Brent crude oil is up 2.5% at $108.33 a barrel.

--European benchmark gas is up 5.3% at 50.17 euros a megawatt-hour.

--Copper futures are down 3.3% at $13,530 a metric ton.

--Gold futures are down 3.1% at $4,541.10 a troy ounce.

TOP STORY:

The World Is Burning Through Its Oil Safety Net

An underappreciated surplus of crude oil, sloshing around storage tanks and aboard ships, cushioned the global economy when the Persian Gulf closed 2½ months ago.

That excess supply is now dwindling at a record pace, with oil executives and analysts predicting that a harsh reckoning is set to upend the relative calm in energy markets. Acute shortages of key fuels and soaring prices could emerge within weeks if the Strait of Hormuz remains shut.

The drawdown in private storage and government strategic reserves along with a fall in demand due to the higher prices, has bought time and prevented oil prices from exploding. But it has left little margin for error in the months ahead.

OTHER STORIES:

Starbucks Cuts Hundreds More Corporate Workers in Turnaround Bid

Starbucks is laying off 300 U.S. workers and closing several regional corporate offices in the latest move by Chief Executive Brian Niccol to turn the coffee chain around.

The company said Friday that chain leaders had been tasked with finding additional reductions beyond thousands of previous layoffs to streamline operations, lower costs and create a more sustainable business.

MARKET TALKS:

Brent Set for Weekly Loss of More Than 7% as Hormuz Impasse Worries Markets -- Market Talk

1406 GMT - Oil prices are little changed, with Brent headed for a weekly loss of more than 7% as hopes for a swift reopening of the Strait of Hormuz have faded. Brent crude is up 2.7% to $108.56 a barrel, while WTI futures rise 2.9% to $99.71 a barrel. At the end of a two-day summit with Chinese leader Xi Jinping, U.S. President Donald Trump said China agreed that the war in Iran should end and ship traffic through the Strait of Hormuz be free. Still, a lack of progress in U.S.-Iran negotiations is making markets nervous. "The longer the Strait of Hormuz remains blocked, the more attention is focused on inventory levels," analysts at Commerzbank say. "If the U.S. Department of Energy's weekly inventory report shows another significant drawdown in U.S. oil stocks, this is likely to support oil prices." ([e-mail])

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Gold, Silver Extend Losses as Markets Reprice Fed Outlook -- Market Talk

1354 GMT - Precious metals extend losses as a war-driven surge in oil prices and U.S. inflation fuels expectations for higher interest rates. Gold futures in New York are down 3.1% to $4,543.90 a troy ounce and headed for a weekly loss of more than 4%. Meanwhile, silver slumped 9.7% to $77.08 an ounce. "Traders continue to reprice Fed rate expectations higher following another round of hawkish U.S. data this week," says Fawad Razaqzada from Forex.com. "Consequently, bond yields have continued to march higher." Two-year Treasury yields climbed to multimonth highs, pressuring non-yielding assets, while the DXY dollar index is up 0.4% to 99.23, making dollar-denominated commodities more expensive for overseas buyers. ([e-mail])

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Grains Lower as U.S.-China Summit Ends -- Market Talk

0913 ET - With the U.S.-China summit ending with no specific agreements to increase Chinese purchases of U.S. agriculture, CBOT grain futures are lower premarket. "Ag markets are seeing follow-through selling with speculative buyers caught on the wrong side of the market as they were aggressive buyers ahead of the Trump/Xi summit and the market was disappointed with the results that didn't really show any new meaningful demand," says Doug Bergman of RCM Alternatives in a note. Bergman adds that weakness in prices is typically seen at this time of the crop season, when planting is over halfway complete. Corn falls 1.2%, soybeans are down 1%, and wheat slides 1.4%. ([e-mail])

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Oil Gains As Middle East Conflict Remains Unresolved -- Market Talk

0908 ET - Oil futures look set to end the week with gains as the Strait of Hormuz remains closed and little progress is seen toward an agreement between the U.S. and Iran to end the conflict, despite Presidents Trump and Xi agreeing the strait should remain a free, open waterway. Prices are gaining "on what we believe is the realization that, while the Chinese leader agreed that Iran must not obtain a nuclear weapon and is likely to buy American oil, the broader geopolitical situation remains unresolved," Peter Cardillo of Spartan Capital says in a note. WTI is up 3.1% at $104.34 a barrel and Brent gains 2.4% at $108.29 a barrel. ([e-mail])

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U.S. Natural Gas Futures Gain As Weather Warms

1536 ET - U.S. natural gas futures settle higher with a warmer weather outlook for the latter half of May seen lifting power-sector demand and a weekly inventory build landing in line with the norm. The EIA reported an 85 Bcf increase in underground storage for last week to 2,290 Bcf, which was 140 Bcf or 6.5% above the five-year average. If forecasts for above normal temperatures pan out, "look for natural gas to rally towards the $3 level," Robert Yawger of Mizuho says in a note. Nymex natural gas settles up 1% at $2.894/mmBtu. ([e-mail])

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U.S. Natural Gas Inventory Build in Line With Average

1054 ET - The U.S. saw a near-normal net injection into U.S. natural gas storage facilities last week, leaving the inventory surplus over the five-year average practically unchanged at 140 Bcf, the EIA reports. Natural gas inventories increased by 85 billion cubic feet to 2,290 Bcf for the week ended May 8, compared with an 84 Bcf average build for the week over the 2021-2025 period. The increase was slightly below the 87 Bcf estimate in a WSJ survey of analysts. Nymex natural gas futures are little changed in the wake of the report, trading down 0.3% at $2.855/mmBtu.([e-mail])

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U.S. Natural Gas Futures Steady Ahead of Storage Report

0840 ET - U.S. natural gas futures trade sideways with the market watching for the EIA's weekly storage report due at 10:30 a.m. ET. Natural gas is trapped between support at $2.82 and resistance at $2.88, "but look for a break out of the range if storage surprises later this morning," Gary Cunningham of Tradition Energy says in a note. "A storage number in the low 80s could give the bulls a reason to push back towards $3, but without some help from the weather maps or a quick return to service from all trains in the LNG fleet we aren't likely to go that high." Analysts in a WSJ survey predict a storage injection of 87 Bcf. Nymex natural gas is off 0.7% at $2.843/mmBtu.([e-mail])

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Crude Palm Oil Ends Higher on Stronger Crude Oil -- Market Talk

1023 GMT - Crude palm oil ended higher, driven by stronger crude oil and soybean oil prices, according to David Ng, a trader at Kuala Lumpur-based Iceberg X. Ng sees support for palm oil at 4,300 ringgit a ton and resistance at 4,500 ringgit a ton. The U.S. stock market's solid performance is also supporting sentiment, he says. The Bursa Malaysia Derivatives contract for July delivery rose 24 ringgit to 4,417 ringgit a ton.([e-mail])

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Precious Metals Fall on Higher U.S. Inflation, Rising Treasury Yields -- Market Talk

0755 GMT - Gold prices drop below $4,600 a troy ounce, pressured by a stronger dollar and rising Treasury yields as a surge in U.S. inflation fuels fears of higher interest rates. In early trading, gold futures in New York fall 2.2% to $4,580.80 a troy ounce, while silver plunges 7% to $79.33 an ounce. "The stronger-than-expected rise in consumer and producer prices raised concerns that the Fed may need to increase interest rates in the short term," analysts at ANZ say. Meanwhile, U.S. two-year and 10-year Treasury yields climbed to their highest levels since February and July 2025, respectively, reducing demand for non-yielding assets like gold and silver. ([e-mail])

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London's Miners Slide as Precious Metal Prices Fall -- Market Talk

0732 GMT - London's miners slide in opening trade as silver and gold prices fall. The share slide is most pronounced among the precious metal miners, with Fresnillo and Hochschild Mining both trading down around 5.6%. Peer Endeavour Mining falls 3.4%. Silver futures are down nearly 8% to $78.66 an ounce while gold falls 2.3% to $4,573.8 a troy ounce. This comes as traders bet U.S. interest rates will stay higher for longer after strong U.S. inflation data. Higher rates typically hurt non-yielding assets like silver and gold. Diversified miner Anglo American slides 3.9%. Commodities major Glencore is down 2.4%. ([e-mail])

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Iron Ore Falls; Slowing Destocking Pace Signals Weakening Demand -- Market Talk

0320 GMT - Iron ore falls in Asian trading, with the most-traded iron-ore contract on the Dalian Commodity Exchange down 0.55% at 811.5 yuan a ton. The downside risks of chasing iron ore's rally has risen, say Nanhua Futures analysts say in a research note. Meanwhile, despite shipping costs staying elevated and providing some support for iron ore prices, the destocking pace of port inventories has slowed, signaling weakness in the demand outlook, Nanhua Futures adds. ([e-mail])

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Copper Falls as High Prices Deter Buying in China -- Market Talk

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05-15-26 1031ET