What about the forward price? If you look a year forward, has that made any serious adjustment? Is the market concerned about anything drawn out? Do we still see this just tremendous back variation in the forward curve?

It is very backwardated, just simply from the fact that when the spot price is trading 20 above the November Brent future, which is the one everyone is watching, then it continues to fall further out.

But as long as it drags on, the back end will probably receive a small boost.

At the same time, the longer this drags on, the more the demand destruction we're going to see.

And the question is really how much of that demand destruction will return when we eventually have a reopening.

We're seeing that in China right now where the push towards electrification has increased dramatically.

Unfortunately, you can say, well, that power is great from an energy transition perspective.

Are we already seeing some weather impacts?

But apparently, is it only from this Kyoto – is it a news agency of some kind out of Japan?

Yeah, well, we've just seen the market breaking news, basically Kyoto, which is – It's a reputable news agency in Japan.

They basically got the news out that Iran has informed the Trump administration that they will reopen the blocked Strait of Hormuz within seven days if it accepts demands such as lifting the U.S. military blockade of Iranian ports.

So that's really just sent the market a bit of a tailspin.

We got Brent crude at this point in time just briefly below $99.

We were trading close to one or two earlier, so...

We'll see.

I don't know, what are the US terms that are going to get them to say yes to this?

How do you see it?

Well, first of all, we talk about El Niño, as I've just mentioned, with the milder weather potentially in Europe.

It just highlights that El Niño hits in different ways across the world.

In some places, it's milder weather, perhaps in Europe.

It's also in the US, but it could be very wet.

other places and very hot in third places.

So basically it leads to more volatile production outlook.

What makes gold different from the rest of the commodity complex and what are the most important drivers for gold and what should investors be looking out for?

How close are we to something triggering even bigger concerns here?

Well, we are getting closer.

But what we are seeing, and once again, is that how much is, or the big question is really, how much is getting through the Strait of Hormuz? And I think the numbers that keep coming out are actually relatively high.

So you would imagine as well that Saudi Arabia will double down on the effort to get oil now back out through the Strait of Hormuz with the pipeline being potentially shut down for a number of weeks.

So we're not at a crisis point, but But every day the global market continues to tighten.

The SPR releases from the US has been the main contributor to the OECD release.

Well, actually the sole, because some of the others are starting to slowly restock.

What's up next here?

But what's your next focus here for copper? Yeah.

Well, if the trajectory continues where we have suppliers reporting lower than expected production and demand remains as firm as it is, and copper is continued to be shipped towards the US because you want to have it onshore if there is any terrorist announcement, then the global market will remain tight, and that will add support.

We've probably not reached anywhere near levels where there's demand destruction, but it's just almost a perfect storm right now where producers in Congo and South America, the two biggest production hubs, are both reporting lower production than anticipated, and as long as demand remains strong.

And also China this time of year is heading into their peak stage, demand season we just saw some stimulus or some was it some grants being handed out earlier in the week the Chinese government to stimulate the economy and into banks and potentially if that feeds through to more lending that could obviously underpin underpin growth and demand so China's heading into its seasonal strong period and that will also underpin prices but I think the ultimate is simply is the US because 70% of visible exchange-monitored stockpiles are currently in the U.S. That is a record level.

It's a country that probably consumes, what, 7% max of global annual copper demand.

That may

So perspectives on gold at the moment.

Yeah, you're right, John.

Or what's your take on what, what the market is focused on here?

Well, we've definitely reached a stage where it, it's, uh, fairly safe to say that the market is not only looking at interest rates because, uh, the, the move high in yields recently should have been negative.

It was positive.

And as you said, John, that is the fiscal debt worries that, that, that kicks in.

And so, so at this point in time, um, actually this week where we saw yields, uh, drift low a little bit, gold was actually struggling a bit.

So, um, it does indicate that that is, uh, one of the major inputs, uh, right now, and that is the, the deep basement trade, the fiscal debt concerns.

And I think with that in mind, does not really, it does- does not, doesn't really matter whether the market is, uh, is pricing in another rate hike, uh, if it's, if, if that's gonna materialize, uh, at, at all.

Yeah.

Now, Ole Hansen at Saxo on Tuesday on where the pressure is really coming from.

It's a, it's a debt-financed, increasingly debt-financed area of the, uh, the economy, and that, that's what makes you, uh, a little bit worried.

And, and that debt is also, I would say, the segue over to something like gold.

Uh, uh, we have AI hyperscalers competing for, uh, uh, just to, to borrow money, and they're now competing with governments, and that's driving up yields, and, uh, and that's what we, that's another part of the equation.

We are now waking up to, uh, to this, this debt clock in the US, which, uh, was at $40 trillion it hit yesterday, and it's just, uh, rising at an alarming rate, and that's really broadening the, the, the, the attention because I think if you ask the, a lot of traders in the market, um, what, what their views on yields, they didn't really pay any attention because they had, they just have been low for a long time.

We now have, you just mentioned, I'm just looking on the screen, this, uh, 430 in the, in the, in the 30-year.

I mean, that was probably, uh, 14, 15%, uh, if you go back to when I was a, when I was a, a kid coming out of school.

Wow.

What, what, what's your read of the situation and, and, uh, uh, of crude oil prices?

Well, first of all, that the, uh, global, uh, supply and demand system is tr- is, um, somewhat managing to cope with the disruption, which, uh, remains obviously very elevated.

And in the last, uh, week, we have seen the, uh, the flow of ships, uh, grind almost to a halt.

There's a lot- obviously a lot-- some stuff going on, uh, behind the scenes, uh, transponders being turned off.

So oil is coming out, uh, oil is being offered outside the Strait of Hormuz.

Saudi Arabia is the latest one to do that.

Um, demand destruction, uh, uh, IEA looking for a slowdown in demand this year by 1.6 million barrels.

Wow.

So how much of this squeeze is that and nothing else?

else?For, uh, it, it most certainly is a squeeze because, uh, once we, we get, uh, we get more clarity about what's, uh, gonna happen with, uh, with tariffs, there is obviously a, a potential situation where, where prices outside the US will get to levels, uh, because that's really where the demand is, is, remains very strong, especially in Asia.

That price outside the US will get to levels where the, the arbitrage could work in the opposite direction, that the, that copper could leave, uh, leave the US once again.

But, but so far we, we, we would have thought that that would, uh, that should have happened last year when we had the big pile up of, uh, copper coming into the US ahead of the announcement, which was then postponed.

In the months that followed, um, p- frankly, none of the copper that had, had come into the US left the US, so there is a risk that the, that all this copper that has moved stateside, uh, is becoming, uh, almost a stranded metal, and that will continue to keep the market, keep the rest of the world, uh, tight.

We obviously have to mention as well that, that, that what we, the visible stocks is only part of the equation.

There's obviously a lot of copper also held by, uh, by, by the trading houses and so on.

So which of those two markets has it kind of wrong?

[laughs]

No, but, but I think it's, uh, it's, it's most certainly very important because, um, I, I'm, I'm actually traveling to Asia, uh, later this year and, um, it's, it's something they are focusing on a lot, uh, out there already.

Um, and what we also have to remember is that the impact around the world is, uh, differs, and, um, that basically means it can actually be good for production in some areas.

Some pla- place like the US, um, can be, can experience milder weather, so less consumption of, of gas, uh, but at the same time also better crop conditions in South America.

Some parts can be benefiting, others c- other- others not.

Um, and then we have the whole Asia area where, and, and specific areas where, where in different, where, where especially co- commodities which are sourced from specific areas.

Uh, we have, uh, some like, uh, cocoa is West Africa, that's, that's always exposed.

Yeah.

What does that signal?

Well, hello, Morgan.

Uh, it signals definitely for, uh, that the market, uh, doesn't really believe that this will, uh, will translate into a- another major escalation, uh, completely shutting, uh, transportation through the Strait of Hormuz.

So the market is, is fairly relaxed at this point, uh, about it simply because we have, uh, had so many different, uh, sound bites coming from either side now for months that the, the, the market's starting to trying to, to just, just trying to, to filter all the, all the noise you can say the- coming from, from either side and, uh, watching the, the, the traffic.

At the same time, we're now trading crude oil into, uh, the autumn months.

Uh, we're trading for September in one and then August in the other, so we are past the, the peak period in terms of demand, and that was really hit during the Jun- June, July, August period where, where demand was going to peak due to the summer, summer travel season.

So we are now already trading into the autumn, and that potentially also just reducing some of the risk.

Uh, how does what we're seeing in Russia factor into the global energy market here too, when they've got, you know, bans on diesel exports?

Let's go into that and as well as, uh, what the heck is gonna happen next for gold and silver, we're-- which are under existential pressure almost for the technicians at least.

That's true, John, and, uh, we-we're having a, we're having a rough month, uh, so far for, uh, for the commodity space as a whole.

All sectors, uh, trading down.

Um, we all know the main reasons, um, the, the peace deal, uh, sending energy prices sharply lower.

That's having an impact on secondary, um, secondary impacts, uh, on other commodities.

The, the hawkish Fed last week, the strong dollar, so all just, uh, weighing on prices, and that basically is, uh, driving some speculative long liquidation.

Uh, we s- we saw that yesterday in some like copper, which, uh, took out a, a key level around six fifteen, um, which has been, um, been a proper anchor for quite a while now, and, uh, and then the slump was v- quite a-- most, most likely speculative driven than just long liquidation.

Yeah

So what are we looking at in terms of specific commodities? Let's start with agriculture, where obviously weather is so, uh, uh, critical.

Yeah, I think we highlight, first of all, that the, uh, that the, the impact is varies from around the world, so it's not all negative.

When obviously we say negative, we talk about lower production, higher prices.

Um, that is primarily a, a risk, I would say, that we see in Asia, where, where this, uh, formation tends to dry- creates drier and hotter weather, so the monsoon can be impacted.

Uh, that is, uh, sort of one that's, uh, very, uh, many countries re- rely on, uh, extensively for, uh, for some of the big, big food groups, especially something like rice.

So, um, so hot and dry in, in Asia, and then if we move, uh, over towards, uh, Africa, it tends to be, uh, ag- against similar s- scenario, but then, but then also just more volatile, uh, volatile weather.

The, the one that stands out of the world where we see really a difference is the, between North and South America, where actually in, in Nor- and even in, within the US, where we, uh, where northern parts can, uh, can be, uh, can, where we see weather condition- wetter condition, which, uh, can actually improve the, the crop production outlook.

Call it panic

Yeah.

Because how are they going to address, um, these higher prices? Will they see this as tempor-temporary and, and try to, uh, add a positive spin on it or what's gonna happen? So, um, that really will be the next major, uh, focus for the, uh, for the metals.

If I may just, uh, finish off on the metals side, John, one market that has done extremely well this past month is copper.

If you look at the chart, the, the six fifteen level in high-grade copper, which was the level that needed to hold, um, has held quite, uh, firmly.

We s- we, I think we s- we bounced from, uh, six seventeen yesterday, and we're trading higher today.

And just highlight this underlying demand that is, uh, in the copper market, where it's not only a question about demand, but also supply side potentially being, being, uh, being challenged.

This was also, also the week where the El Niño was confirmed by, uh, by the Jap- the, the Japanese authorities, basically creating some, some risk not only to, uh, agriculture, but also to mining to, uh, to, uh, to demand for heating.

Mm.

What, uh, to what degree those US exports you're talking about, uh, are those, uh, you know, facilitated by, uh, maybe tank farms on s- sort of onshore storage? And to what degree is it sort of SPR, so the Strategic Petroleum Reserve, uh, to your understanding at least? I mean, how, how is the US able to suddenly open up this, this export valve to such a, to such a degree? And what are you looking for in today's, uh, weekly, uh, um, you know, supplies of both crude oil and, and products from the US?

Well, we're seeing a continate-- We're looking for continuation of the, uh, of the, the, um, the, the, the big drops we've, we've seen, uh, recently in, um, in both not only crude stocks but also especially, I would say, uh, uh, cr- uh, cr- um, uh, fuel stockpiles.

The-- There was a survey yesterday for the API, which is a local, the private institute in, uh, in, in, uh, the US.

They basically, uh, reported two point two million barrel decline in crude, uh, last week.

And, uh, they're also seeing a, uh, see basically a little bit of a normalization in the, in the fuel products.

But, uh, but the, the SPR, uh, has been-- SPR strategic reserve has been released at a, at a recently rapid pace.

And, uh, and, uh, most certainly some of the, the export s-surge we've seen is coming from, coming out of the SPR.

Uh, take us through the linkage there, uh, both to the Iran war and, and shortage maybe of fertilizer or plans to plant and, and just what's, what's going on with, with wheat here?

We're just all waiting.

Yeah, and the longer we keep waiting, the more dire the whole situation becomes.

And that basically means if there's no very day that goes without any solution or any idea about a solution, prices will unfortunately probably continue to track higher.

Simply because we are reaching this increasingly stage where with supply being curtailed, we need to see demand response.

So basically demand has to be lowered.

That can either be done through digging into reserves.

Or you can price reach levels where it simply becomes too expensive.

We don't want to contemplate these things, but we just have to recognize that these are risks.

Tell us your perspective on the big picture of what's going on with energy, how long this is likely to last, and what we can expect for energy markets out of this conflict.

Well, hello, Eric, uh, and thank you very much for, for having me back.

Um, I think there's no doubt that even though the, the market is behaving relatively benignly, especially if you're just watching front month, uh, futures price in the, in the crude oil market, you would kind of be saying, "What, what's the whole fuss about?" But th-this disruption we're seeing right now is just so profound because it's not only the energy space that we are seeing being impacted, and one thing is crude oil, but another thing is the older refined products where we're really seeing the, the tightness right now, diesel, jet fuel, petrochemicals, and so on.

But it's also the associated impacts, uh, because I think many were probably not aware how the importance of the Middle East besides energy production, that in, in recent years, the Middle East has obviously expanded its production base.

Uh, and why just sell oil out of the ground, um, and send it on the ship when you can actually make some money on, on the, the process of refining these into other areas? And that's why we're suddenly left with a market where besides gas, obviously, which is Qatar and, and a major supplier to the global market, we have all the associated productions, uh, of commodities that, that takes place in the Persian Gulf simply because they have an abundance of cheap energy available.

So the energy intensive, uh, commodities, uh, that's anything from aluminum to especially fertilizer, which requires a lot of gas, which is the main feedstock.They have become, uh, key issues.

Recently, we just come to know as well that, uh, miners in South America, they need sulfuric acid in order to break down the copper from the, from their mines.

That's huge.

So Take us through what you're seeing here in this market and this whole demand destruction side of things, which has to be why we're sitting here with whatever it is, $90-ish crude rather than a price that is far, far higher.

Yeah, John, that's really the unknown that we've been waiting to get some estimates for because I think everyone's been struggling a little bit to tie the dots with crude futures trading below $100, with jet fuel trading close to $200, diesel trading around $160.

that we still got the crude oil trading below these levels.

Obviously, some of that is speculative.

Mark is trying to price in a solution, not really believing it can escalate further.

But what we saw yesterday was basically some of the major oil traders in the world, Mercurial, Vital, two of them, basically at a FT conference in Switzerland, coming out saying, well, they were at least by now seeing 5 million barrels of daily demand destruction.

And that basically means that the 20 million that initially was the number then came down to around 10 because of pipeline availability from Saudi Arabia and the UAE and strategic release of strategic reserves around the world.

So what's your take on the copper drivers here, the outlook, and then we can go over to the precious metals.