Commodities on a Wild Rollercoaster: Oil Plunges, Gold Soars, Coffee & Copper Hit Highs!

Oil prices dip as Iraq’s Kurdistan resumes pipeline exports (~180–230k bpd) and OPEC+ readies another +137k bpd hike ^[1]. Brent (~$69.7) and WTI (~$65.2) fell ~0.6% Monday, though both are up >4% in the past week on fears that supply disruptions (e.g. Ukrainian drone strikes) will tighten markets ^[2] ^[3].
OPEC+ and geopolitics: Sources say OPEC+ will likely add ~137,000 bpd in November ^[4]. At the same time, analysts warn that drawing down spare OPEC capacity raises geopolitical risk – “the risk of an October geopolitical surprise continues to rise,” note RBC analysts ^[5].
Gold & silver hit new peaks. Gold climbed ~1.5% to a record $3,814/oz on Monday (Fed rate-cut bets and a weaker dollar) ^[6]; silver jumped ~2.3% to ~$47/oz (about a 14-year high) ^[7]. Platinum spiked ~3.6% (~$1,623), palladium ~2% ^[8]. Fed futures now imply a ~90% chance of an Oct rate cut ^[9], fueling bullish sentiment: “markets [see] further Fed cuts… Sentiment is very bullish,” says Capital.com’s Kyle Rodda ^[10].
Copper surges on supply worries. Freeport’s Grassberg mine in Indonesia (world’s 2nd-largest copper mine) suffered a massive collapse, slashing output by ~600k tons through 2026 ^[11]. LME copper jumped to ~$10,485/ton (a 15-month high) ^[12]. Goldman Sachs now sees upside risk to its $9,700 price forecast (noting prices may settle $10,200–10,500 by year-end) ^[13]; Citi predicts a rally to ~$12,000/ton over 6–12 months (and up to $14,000 in a bull case) ^[14].
Oil & gas fundamentals: Crude’s fall from $80+ to the mid-$60s–$70s since April has pressured markets ^[15]. Meanwhile, U.S. fuel stocks (diesel, gasoline) have been resilient. Natural gas in Europe saw a ~1.3% jump after French LNG-terminal strikes triggered force majeure, tightening flows ^[16]. The Dutch TTF gas benchmark rose on the news despite offsetting Norwegian flows ^[17].
U.S. grain harvests and trade: USDA projects a record U.S. corn crop (~16.8 bn bushels) on near-92-year high acreage ^[18], swelling stocks by ~59% (7-year high) ^[19]. Corn futures eased modestly on this glut. Soybeans slid on harvest pressure and stalled Chinese buying ^[20]. China has booked almost no new U.S. soy this season (citing “unreasonable tariffs”), instead locking in South American cargoes that cover ~95% of China’s Oct needs ^[21] ^[22]. ECB trading data show large spec funds shorting soy and corn.
Soft commodities: Coffee: NY Arabica futures neared an all-time high (~$4.24/lb on Sep 16) under a 50% U.S. tariff on Brazilian coffee ^[23] ^[24]. (U.S. roaster shortages and dry Brazilian weather are cited as factors ^[25].) Palm oil: Malaysian stockpiles are projected to fall to ~1.7 m tons by year-end as output slows and exports pick up for festive demand ^[26]. This should support palm oil prices despite cheap soy oil and Indonesian biodiesel policy changes ^[27]. Rubber: Analysts (ANRPC) warn of a 5th straight year of global deficit in 2025, with Indonesia’s output down ~10% ^[28], likely keeping rubber prices firm.
Market sentiment & forecasts: Safe-haven demand is strong: equity markets began Tuesday cautiously on US government shutdown fears, while investors pile into gold/silver ^[29]. The US dollar index has eased (~0.2%) ^[30], further boosting dollar-priced commodities. Traders now price in high odds of Fed easing (90% for Oct) ^[31]. Expert take: Capital.com’s Kyle Rodda says “sentiment is very bullish” for gold ^[32]. RBC notes that ongoing Middle East and Iran conflicts magnify the risk of supply “wake-up” shocks ^[33]. Citi’s analysts view the copper market as structurally tight after Grasberg, forecasting big rallies ^[34].

Energy Commodities: Oil & Gas

Oil prices have eased recently but remain relatively high. On Monday, Brent crude slid about $0.43 to ~$69.70/bbl and U.S. WTI fell ~$0.49 to ~$65.23/bbl. The drop came as Iraq’s Kurdistan region resumed exports through the Kirkuk-Ceyhan pipeline (~180k bpd initially, potentially up to 230k). This revived flow, backed by U.S. diplomatic pressure, adds to global supply just as OPEC+ meets. According to industry sources, OPEC+ is expected to approve another production increase of ~137k bpd in November ^[35], continuing a strategy to boost market share after some months of cuts. (Remember, the group has already unwound most of its voluntary cuts since April ^[36].)

Meanwhile, geopolitics is injecting uncertainty. Last week’s Ukrainian drone strikes on Russian refineries cut off fuel exports, helping push Brent/WTI up ~4% over the week ^[37]. But analysts at RBC caution that as OPEC draws down its spare capacity, “the risk of an October geopolitical surprise continues to rise.” They note that market-watchers are now adding back in the “wake-up risk” of Middle East or Russia–Iran tensions ^[38]. In short, supply is ample in the near term (thanks to higher OPEC production and Iraqi exports), but a supply disruption risk premium is re-emerging.

Natural gas in Europe has also been affected by local factors. French workers have blockaded three of four LNG import terminals, forcing one operator (Elengy) to declare force majeure through early Oct ^[39]. That cut gas outflows from France and lifted the Dutch TTF benchmark about 1.3% on Thursday ^[40]. (Some of the pinch was offset Friday by extra Norwegian flows as maintenance ended.) Thus European prices ticked up despite falling after the summer peak. This squeeze – and looming biodiesel mandates in Indonesia – kept palm oil firm too, since palm oil and gasoil are industrial substitutes.

Overall, the short-term oil outlook is mixed. Prices have retreated from spring highs (Brent spent much of the summer in the $60–$70 band ^[41]), but remain underpinned by both conflict-driven spikes and tight stockpiles. OPEC+ is on track to loosen production further, but analysts warn this leaves little margin for error. As Michael McCarthy of Moomoo notes, “ongoing fears of production increase [are] limiting gains,” and any surprise (e.g. a flare-up in Iran or Iraq) could suddenly tighten the market again.

Precious Metals: Gold, Silver & More

Gold jewelry on display in Mumbai (Reuters) – Precious metals extended their bull run on Monday. Supported by safe-haven buying and lower real rates expectations, spot gold shot to ~$3,814/oz (a fresh all-time high) ^[42]. U.S. gold futures (Dec) also rallied to ~$3,844. Silver climbed ~2.3% to ~$47.04/oz (a 14-year peak) ^[43], platinum jumped ~3.6% (~$1,624/oz), and palladium rose ~2% (~$1,295). Investors cite a weaker dollar (U.S. DXY index down ~0.2% ^[44]) and rising confidence in Fed rate cuts. August’s mild inflation readings (PCE +0.3% m/m, as expected ^[45]) led traders to price in ~90% odds of an October rate cut ^[46], boosting bullion’s appeal.

Capital.com analyst Kyle Rodda sums it up: “That benign inflation print … has given the markets reason to believe further Fed cuts are coming in October and December,” and “sentiment is very bullish” for gold ^[47]. Many funds have been pouring into gold ETFs (SPDR Gold Trust holdings ticked up ~0.9% last week ^[48]). Goldman Sachs noted that with yields so low and uncertainty so high, “safe-haven bullion thrives in a low interest rate environment and times of… uncertainty” ^[49]. Indeed, several managers now bet on gold above $4,000 if Fed easing is sustained.

Silver’s rally is similarly fueled by low rates and industrial tightness. Platinum’s 12-year high (~$1,624) reflects continued demand from green-tech industries, and palladium’s rise echoes auto-catalyst demand. In short, the safe-haven/precious corner is red-hot. Market reactions – with gold and silver surging after other assets stall – confirm traders’ risk-off tilt. (Asian stocks opened cautiously Tuesday amid U.S. government shutdown worries ^[50], another factor sending money into precious metals.)

Industrial Metals: Copper & Other Base Metals

Trucks haul ore at Freeport’s Grasberg copper mine, Indonesia (Reuters) – Industrial metals saw a shake-up, led by copper. Freeport-McMoRan’s Grasberg mine in Papua was hit by a catastrophic cave-in Sept. 8, halting block-cave mining and causing a massive output loss ^[51]. Freeport now says Grasberg may not fully ramp up until 2027, with Q4 copper production “insignificant” and 2024–26 output cut by ~600k tons ^[52]. This sent LME copper above $10,485/ton (15-month high) last week ^[53]. With other big mines (Congo’s Kakula, Chile’s Codelco) also facing hiccups, analysts now see copper in a structural deficit. BMI Analytics widened its 2026 deficit forecast by 400k tons, and Citi projects a ~350k ton shortfall in 2027 ^[54] ^[55].

Accordingly, price forecasts have risen. Goldman Sachs cut its 2025–26 supply outlook and now sees its Dec-2025 copper forecast (~$9,700/ton) as conservative – “upside risks” could lift prices into the $10,200–$10,500/ton range ^[56]. Citi bumped its short-term target to $10,500/ton and predicts a rally to ~$12,000/ton within a year (potentially $14,000 in a bull market) ^[57]. Even longer term, Citi’s bull-case is sky-high: they argue that a prolonged shortage (unless new mines come online) could see copper traded well above $12k by 2026. Other base metals are firmer too: nickel and zinc have steadied near multi-month highs (buoyed by demand for EV batteries and mine cutbacks in Europe).

In sum, traders are recalibrating. Copper is suddenly the new high-flying story after years in the doldrums. Funds have rotated money into copper as gold, expecting tight fundamentals ^[58]. The market is now factoring in not only the USA-China trade chill (which has limited metals demand) but a genuine supply crunch. RBC and others warn that even the expectation of rising output (OPEC+ hikes or Trump tariffs) is “limiting gains” for energy metals – it’s tight fundamentals that are driving prices up.

Agricultural & Soft Commodities

Workers move sacks of coffee beans in Brazil (Reuters) – Agricultural commodities had mixed fortunes. Coffee leads the pack: New York Arabica futures reached ~$4.24/lb in mid-Sep ^[59] (a near-record), driven by a 50% U.S. tariff on Brazilian imports and a very dry Brazilian season ^[60] ^[61]. The U.S. lost access to a third of its coffee (previously from Brazil), causing roasters to scramble for stock ^[62]. “I attribute most of this recent price rally to tariffs and … supply chain disruption,” says StoneX broker Tomas Araujo ^[63]. (He also notes worries about Brazil’s weather.) Robust rally momentum was seen as funds covered short positions, bidding up prices. In short, coffee prices are nearing past peaks – roast coffee price index in U.S. hit 21% year-on-year growth in August. Cocoa eased ~2–3% on speculative selling, and sugar prices remain near 4-year lows as global supplies from Brazil are ample ^[64].

Grains & oilseeds: U.S. harvest pressure is pushing corn and soy crops to record volumes. As noted above, USDA forecasts a record corn crop (16.8 bn bu) ^[65]. Corn futures held near multi-month lows ($4.20s) on Wednesday as traders await updated crop estimates. Soybeans have been less glutted but are under pressure: CBOT soy (Nov) fell to ~$10.13/bu on Monday ^[66] on heavy harvest, and traders note that China has almost entirely sidelined U.S. soy purchases this fall. Argentine farmers have booked dozens of cargoes for November/December delivery after Argentina briefly cut its export tax ^[67], directly undercutting U.S. supplies. In fact, Reuters reports Chinese buyers have locked in ~7.4m tons of South American soybeans for October (95% of their needs) ^[68]. The upshot: U.S. export sales figures are disappointingly low. The USDA raised U.S. soybean production slightly (to 4.301 bn bu) but also cut its export forecast to the lowest level since the last China trade war ^[69]. Traders say spec funds have grown net short in wheat and soy, reflecting the ample supply picture.

Oil palm fruits at a plantation in Malaysia (Reuters) – Palm oil: Malaysian authorities now expect year-end palm stockpiles to shrink to about 1.7 m tonnes (from ~2.2 m in Aug) as seasonal output slows and festive-season exports rise ^[70]. This looming drawdown has underpinned palm futures even though cheap soy oil (now ~$970/ton) has pressured prices. The Malaysian Palm Oil Board notes that despite recent price weakness, palm oil should stay firm into year-end due to uncertainties over Indonesian output (biodiesel programme, plantation reforms) ^[71]. Demand remains steady (India is still sourcing palm amid a global edible oil surplus).

Other farm products: Cotton has been weak on global demand slowdown, and world sugar supplies are plentiful (Indian mills are missing export quotas as cheap Brazilian sugar undercuts them ^[72]). Livestock feed costs are low thanks to big grain crops. Meanwhile, rubber markets look tight; the Association of Natural Rubber Producers says 2025 will be the 5th consecutive deficit year (production up ~0.3% vs demand +1.8%) ^[73]. Top producers Indonesia and Vietnam are actually cutting output, keeping rubber prices near late-2024 highs ^[74] ^[75].

Market Sentiment & Expert Views

Investor sentiment is decidedly bullish on metals and cautious on energy. Bullion remains a favourite: Reuters notes stock markets were subdued Tuesday as U.S. debt-ceiling fears grew, even as gold climbed ^[76]. Fed policy expectations play a big role: traders now give high odds to Fed easing, which has lifted all rate-sensitive commodities. On the other hand, some traders worry about a commodity overhang if stimulus fades: RBC warns that adding supply (like more OPEC oil or easing tariffs) could quickly reverse recent rallies. Indeed, RBC analysts say markets “had been focused on a 2025 oversupply story, [but] are starting to factor in the accelerating wake-up risk” from geopolitical conflicts ^[77].

Looking ahead, forecasts vary by sector. Oil: OPEC+ seems set on another small hike in Nov (likely +137k bpd) ^[78], which might cap prices in the $60–$70 range, unless geopolitics intervene. Goldman Sachs thinks Brent will average around current levels into 2026, given ample OPEC output. Metals: Strategists like Citi/Goldman expect copper’s lows are behind us. Citi has raised its 12- and 18-month targets for LME copper into the $12,000+ range ^[79], while many expect any dip to be bought aggressively. Similarly, analysts see silver/PGMs catching up if gold holds its highs. Agriculture: USDA will update stocks data soon, but for now the outlook is for record supplies in corn and soy. Profits in farming are squeezed (input costs are up and prices down), so some suggest government aid to farmers might be on the table (per USDA secretariat comments ^[80]). For softs, much depends on weather: Brazil’s rains (needed soon) and India’s monsoons will steer next year’s crops.

In summary, late Sept. markets show a contrarian split: oil and gas are softer on supply boosts, while metals and foodstuffs rally on demand/safe-haven themes. Key near-term drivers will be OPEC+ decisions, U.S. fiscal politics, and weather in major farm regions. As one analyst put it, “We’re in a very bullish cycle for metals – but equally on the edge if something snaps short” (paraphrasing RBC and market pros). Traders and hedgers alike will be watching Fed signals and geopolitical headlines closely in the days ahead.

Sources: Latest market reports and analysis from Reuters and industry sources ^[81] ^[82] ^[83] ^[84] ^[85] ^[86] ^[87]. (Prices are approximate and for September 28–29, 2025.)