Commodity wrap - Oil, Natgas, Silver, Cocoa (23.09.2025)

Crude Oil

• Crude oil remains under pressure from an expected supply glut through the end of this year and into next.

• There appears to be no immediate threat to supply, given the lack of signals from the US or Europe regarding the imposition of strict sanctions on Russia.

• Iraq has agreed with the Kurdistan Regional Government to resume oil exports to Turkey via the pipeline running through Kurdistan.

• At the same time, price declines are limited by the strong performance of the US stock market, where new historical highs are being set almost daily, maintaining a positive sentiment about the future of the American economy.

• Turkish oil imports in August fell by nearly 3% year-on-year, which may indicate weakening demand or a reduced willingness to buy Russian oil due to additional tariffs. Conversely, India already faces high tariffs, so it has no reason to reduce its purchases from Russia.

The supply surplus this year is very large, although we have not seen a corresponding significant increase in inventories. Source: Bloomberg Finance LP, XTB

US crude oil inventories remain near last year's levels and close to their five-year minimum. Source: Bloomberg Finance LP, XTB

Natural Gas 

• Natural gas prices have returned to a sharp downtrend amid stronger-than-expected inventory builds in recent weeks.

• On the other hand, we are seeing a renewed significant increase in demand, to levels above the five-year average.

• The number of cooling degree days is clearly falling, suggesting that there is no longer significant demand for gas for cooling purposes. Conversely, the number of heating degree days is markedly lower than the five-year average.

• The current weather forecast suggests that the start of the heating season could be delayed.

• US natural gas prices have recently fallen sharply, bringing them in line with the trend set by TTF gas.

• Although production has dropped slightly in recent weeks, it remains extremely high by historical standards.

Consumption data is surprising, as consumption is slightly above the five-year range, especially in the use of gas by power plants (second chart). However, high production means that the inventory build should still be quite significant. Source: Bloomberg Finance LP, XTB

Demand has indeed jumped, but inventory builds are still expected to be quite strong. Source: Bloomberg Finance LP, XTB

Silver

• Silver is having its best year since 2011 in terms of both nominal prices and growth. It has gained over 50% since the beginning of the year.

• The price increase is driven by rising demand for safe-haven assets, with gold's gains exceeding 40% this year.

• The rally in precious metals was primarily fueled by growing expectations for US interest rate cuts this year, following the Fed's first cut last week.

• The Fed is now expected to cut rates two more times this year.

• Additionally, this is the third consecutive year of very strong demand from the photovoltaic sector, although there are some concerns about whether the coming years will be as robust.

• On the other hand, long-term forecasts indicate a continued increase in demand from the photovoltaic sector and its growing importance in total silver demand. Silver's share of demand from the electric vehicle sector is also rising.

• According to Metal Focus, a firm that collects data on metal market fundamentals, silver has a chance to reach $45 per ounce in the near term, which would act as a psychological barrier. At the same time, $50 per ounce is not ruled out in the coming months.

• Metal Focus also points to a $3,800 level for gold, followed by a period of consolidation, given that Fed rate cuts are now fully priced in.

Cocoa

• Cocoa prices have fallen to their lowest level since November 2024, linked to weather reports from West Africa and rising supply from South America.

• Côte d'Ivoire has recorded significant rainfall, which may improve the outlook for the upcoming harvest.

• Additionally, Mondelez has indicated that the number of cocoa pods is currently 7% above the five-year average, suggesting a potentially good harvest in the coming months. Moreover, farmers remain optimistic about the quality of the pods.

• There are also concerns that high tariffs on Switzerland and Europe could cause a drop in demand for chocolate products in the United States.

• Information has also emerged that in the 2026/27 season, there could be a change in the classification of the second-largest producer. A harvest of 650,000 tons is expected from Ecuador, while Ghana currently produces about 600,000 tons. However, it is worth remembering that Ghana's production capacity is significantly higher, at around 800,000 tons.

The price of cocoa is in a clear downtrend. Seasonality suggests that a price rebound usually occurs around the 200th trading day of the year, which is related to the start of the harvest season. However, recent data indicate that the season may be better than at least the previous two. Source: Bloomberg Finance LP, XTB

Cocoa inventories have continued to decline recently, but the period when larger deliveries from African countries begin will be key. If inventories continue to fall from October, it will signal persistent supply problems. Source: Bloomberg Finance LP, XTB