Commodities Trader Trafigura Warns of Tipping Point in Energy Markets -- Commodities Roundup

MARKET MOVEMENTS:

--Brent crude oil is down 2.9% to $95.05 a barrel.

--European benchmark gas is up 0.2% to 48.84 euros a megawatt-hour.

--Copper futures are up 1% to $13,929.50 a metric ton.

--Gold futures are up 0.7% to $4,500.20 a troy ounce.

TOP STORY:

Commodities Trader Trafigura Warns of Tipping Point in Energy Markets

Trafigura said the Middle East conflict has thrown global commodity markets into turmoil, warning that while energy prices remain relatively contained for now, markets are at an "inflection point" that could see prices move higher as supply tightens further.

The Singapore-headquartered commodities trader said a key reason for the relatively muted oil price response to curtailed production and halt to shipping volumes through the Strait of Hormuz has been the elevated global inventories that markets entered the year with. This created a buffer, while significant reductions in demand across Asia, Australia and Africa have helped ease supply in the west.

However, inventories are starting to draw rapidly and a peace deal is yet to be signed.

OTHER STORIES:

Self-Driving Car Company Waymo is Repurposing its Old EV Batteries

Alphabet's Waymo is set to repurpose its old electric-vehicle batteries as storage for solar power.

The self-driving car company told WSJ Pro Sustainable Business it is partnering with B2U Storage Solutions in an effort to reuse thousands of its EV batteries, finding a new use for the old batteries as large-scale energy-storage systems that can stash power to shore up the electric grid.

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The Hormuz Squeeze Is Redrawing the Oil Map for Good

For decades, the Persian Gulf's energy map converged on a single chokepoint: the Strait of Hormuz. Now, spurred by the Iran war, the region's petrostates are rushing to draw new lines to circumvent it.

Across the Gulf, governments are pouring billions into new oil pipelines, rail corridors and energy storage hubs to bypass the waterway in what is set to become one of the most durable outcomes of the conflict. The new energy links are part of a broader redrawing of the region's logistics map, shifting trade toward trucking, rail and new ports.

MARKET TALKS:

Weather Stays Center Focus for Grain Traders -- Market Talk

1115 ET - The weather outlook for U.S. crop-growing areas remains the chief focus for grain traders - which is why corn and soybeans are down in morning trade Thursday. "A warm and wet pattern will dominate through the middle of this month to get the 2026 U.S. crop off to a strong start," says Matt Zeller of StoneX in a note. Today's map from the U.S. Drought Monitor shows that extreme drought conditions have eased in the western plains, but dryness has popped up in states that have been well-watered so far this year - states including Iowa, Illinois, and Wisconsin. Most-active CBOT corn is down 1.9%, soybeans fall 2%, and wheat is down 0.5%. ([e-mail])

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U.S. Natural Gas Inventories Rise Less Than Expected -- Market Talk

1055 ET - U.S. natural gas inventories increased by less than usual and less than expected last week, according to data released by the EIA. Natural gas in underground storage was up by 95 billion cubic feet at 2,578 Bcf, reducing the surplus over the five-year average to 138 Bcf from 144 Bcf the week before. The net injection was smaller than the 2021-2025 average for the week of 101 Bcf, and below the 105 Bcf estimate in a WSJ survey of analysts. The build put stocks 3 Bcf below their year-earlier level. Nymex natural gas futures are up 3.4% at $3.324/mmBtu. ([e-mail])

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Battery Storage Curbs California's Natural Gas Demand -- Market Talk

1038 ET - California's high utility-scale battery storage capacity is limiting the state's call on natural-gas fired electricity to meet demand when solar generation falls off, East Daley Analytics says in a note. "California's battery component is proving particularly effective at displacing gas load," the energy intelligence firm says. "Early trends in the 2026 summer suggest the transition to solar and batteries continues to eat away at gas use." Although battery storage initially manages the evening rise in electricity demand, gas-fired generation remains critical to maintain reliability after battery discharge tapers later in the night, East Daley adds. ([e-mail])

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U.S. Natural Gas Futures Rise on Weather Outlook

0910 ET - U.S. natural gas futures gain in early trading with warmer weather forecasts lifting demand expectations for coming weeks. "The first test could come tomorrow and into the weekend where the northeast will see the mercury climb through 90 again," Tradition Energy's Gary Cunningham says in a note. The coming heat is expected to add to power-sector gas demand "and firm up the fundamentals for the remainder of summer," he adds. Storage data for last week due at 10:30 a.m. ET are expected to show an injection of 105 Bcf, slightly larger than the five-year average, according to a WSJ survey of analysts. Nymex natural gas is up 1.8% at $3.273/mmBtu. ([e-mail])

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Coffee Prices Slide as Brazil Harvest Creates Surplus Expectation -- Market Talk

1508 GMT - Coffee prices slide largely because of ongoing expectations for a large Brazilian harvest, Rabobank's Carlos Mera says. Brazil is on track for its best harvest in six seasons, while output from Vietnam also jumped. Coffee prices continue to trade well above historic averages and the cost of production, the analyst notes. Though an El Nino looks almost certain this year, it's too early to predict the weather system's impact on coffee supply, Mera says. Arabica trades at $3,381 a metric ton, close to a two-year low and down 10% from May's high. New York Robusta coffee contracts are down over 18% from last month's high at $2.49 a pound. ([e-mail])

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Cattle Higher After Screwworm Found in Texas -- Market Talk

1007 ET - The USDA confirmed overnight that a case of New World Screwworm was found in a calf in southern Texas, after cases in previous days were reported close to the U.S.-Mexico border. Live cattle futures are up, with traders seemingly opting to buy the dip seen in recent days instead of selling on the news of NWS confirmation. "Traders bought the lower open after the knee-jerk response," says Brian Grete of Commstock Investments. "Some long liquidation had already occurred ahead of the screwworm confirmation." While investors were prepared for this, Grete adds that what happens with futures in the coming days will shape the storyline around the struggle against NWS. Live cattle is up 1.6%, and lean hogs fall 0.7%. ([e-mail])

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Oil Futures Pull Back on Israel-Lebanon Ceasefire Hopes -- Market Talk

0930 ET - Crude futures return yesterday's gains as a ceasefire agreement between Israel and Lebanon is seen possibly removing an obstacle in U.S.-Iran talks, although the agreement still needs Iran-backed Hezbollah to sign on. "We have seen many rounds of calm in the past that ended with a return to escalation," Samer Hasn of XS.com says in a note. Meanwhile, Iran continues to contradict U.S. assertions of progress toward a deal, he says. "Unless we receive a signed, written, and binding agreement, we should expect ongoing escalation that will maintain the strait's closure and drive oil prices higher. "WTI is down 3.1% at $93.01 a barrel and Brent is off 2.6% at $95.26. ([e-mail])

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Chevron, ExxonMobil Eyeing the Eastern Mediterranean as Next Frontier -- Market Talk

0854 ET -- Chevron is quietly and deliberately expanding its presence in the Eastern Mediterranean, Melius Research analysts James West and Sanskriti Reddy say in a research note. Greece, where the company recently made an acquisition and been awarded rights, marks its next frontier, they write. "With the conflict in the Middle East continuing to expose the fragility of the modern global energy system, Chevron's de-risked Eastern Mediterranean asset base and its frontier potential are differentiated and increasingly valuable." Chevron isn't alone, though. ExxonMobil is also expanding its presence in the region. "The entrance of two supermajors into the area at roughly the same time suggests these companies like what they see, and we expect others to follow," the analysts write. ([e-mail])

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Gold Rises After Israel-Lebanon Ceasefire But Remains Rangebound -- Market Talk

0750 GMT - Gold prices tick higher as traders reassess expectations for a U.S.-Iran peace deal after Israel and Lebanon agreed to a conditional ceasefire. In early trading, New York futures are up 0.5% to $4,488.40 a troy ounce, aided by a softer dollar and falling crude prices. "Overall, gold remains rangebound, with steady central bank demand being offset by ETF outflows and short-term momentum traders positioning for a deeper correction," analysts at Saxo Bank say. "Key focus remains on support around $4,425, developments in the Middle East and oil market, as well as incoming U.S. data following the recent hawkish shift in Fed rate expectations." ([e-mail])

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Rio Tinto Could Secure Up to $1.8 Billion by Selling Silver Rights at Mongolia Mine -- Market Talk

0731 GMT - Rio Tinto has a great opportunity to pocket a large cash payout by selling off a portion of its future royalty rights from its 66% stake in Mongolia's Oyu Tolgoi mine, Berenberg analysts Richard Hatch and Jasper Mainwaring say. Selling the silver production rights could generate $1.1 billion to $1.8 billion in cash proceeds as it capitalizes on the elevated price of silver, the analysts say in a note. It would also unlock some noncore value from the mine at a price the analysts say isn't fully appreciated by the market. "If Rio were to execute the conceptual stream for an upfront cash consideration of around $1.4 billion... it would crystallize around 9% of the asset's net asset value," Berenberg says. Shares are down 2.2% at 7,894 pence. ([e-mail])

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06-04-26 1153ET