Energy – Kazakh oil disruptions

While ICE Brent edged lower yesterday, settling 0.3% lower on the day, it held up relatively well amid the broader risk-off move in markets. This follows the re-emergence of trade tensions between the US and Europe over President Trump's Greenland demands. A weaker US dollar provided some support to oil and the broader commodities complex. Continued firmness in ICE Brent timespreads will also help buoy the market, as it suggests a tighter spot physical market.

In Kazakhstan, Tengizchevroil temporarily stopped production at its Tengiz and Korolev fields after two fires broke out at power generators. The producer pumped around 890k b/d over the first three quarters of 2025. Kazakhstan has faced several supply disruptions in recent months, including exports from the CPC terminal in Russia, which were impacted by drone strikes.

The ICE gasoil crack has seen renewed strength in recent days, edging back towards US$25/bbl. The strength in the European middle distillate market coincides with the EU's ban on refined product imports produced from Russian oil. The ban comes into effect on 21 January. While trade flows have had time to adjust to the ban, it may still lead to some disruption. The ban will largely affect middle distillate flows from India to Europe. Some Indian refiners are reportedly adjusting their crude purchases to continue selling into the EU.

Metals - Gold and silver hit fresh records, copper rebounds

Gold and silver surged to fresh record highs as escalating geopolitical tensions boosted demand for safe-haven assets. The latest catalyst is renewed friction between the US and Europe, with Trump's intensifying push to take control of Greenland stoking concerns over a potential transatlantic trade conflict.

Both gold and silver have extended their strong year-to-date gains. Gold is up around 8%, while silver has climbed 30%, building on an already robust performance in 2025. The move has been driven by a series of geopolitical shocks, including the US arrest of Venezuela's leader and the continued uncertainty surrounding Washington's stance on Greenland.

Adding to the volatility, the Trump administration's repeated attacks on the Federal Reserve intensified investor concerns about central bank independence. This has reinforced the debasement trade. Investors are favouring gold and silver over currencies and government bonds amid rising US debt levels and heightened policy unpredictability.

In industrial metals, copper climbed toward $13,000/t, rebounding after last week's volatility. The move was driven largely by macro and dollar dynamics. Trump's threat of new tariffs on several European countries pushed the dollar lower, sparking broad-based metals buying. Sentiment was further supported by China's GDP meeting the government's target. This helped stabilise demand expectations following weeks of mixed data.

Meanwhile, copper inventories in US warehouses tracked by the LME rose for the first time since September 2025. As of yesterday, they increased by 950 tonnes, climbing from zero. The build follows a notable flip in relative pricing with LME spot now trading above Comex front-month futures, reversing last year's pattern that drew huge volumes of copper into the US and left ex-US markets tight. This suggests the extreme tariff-driven distortions that defined much of 2025 may be beginning to normalise.

Source: ING