Commodities Feed: Risk off mood

Oil prices opened lower this morning with ICE Brent extending its declines from last week, hovering around $73.5/bbl. This weakness comes after Trump said he would consider “secondary tariffs” on Russian oil and those who buy it if a ceasefire with Ukraine can’t be reached.

Drilling activity in the US slowed over the last week. The latest rig data from Baker Hughes shows that the number of active US oil rigs fell by two over the week to 484 as of 28 March 2025. This is the lowest level since the week ending on 14 February 2025, with the oil rig count down by 22 compared to this time last year. The total rig count (oil and gas combined) stood at 592 over the reporting week, slightly down from 593 a week earlier and 4.7% lower compared to the same time last year. Primary Vision’s frac spread count, which gives an idea of completion activity, also decreased by six over the week to 209.

In gas, natural gas prices in Europe extended declines for a second straight session in the early trading session today, after falling around 4.7% week-on-week as of last Friday. Prices came under pressure as the heating season came to an end, and the market focus shifted towards the inventory refill for next winter. Along with that, warmer weather forecasts and strong flows of liquefied natural gas are further weighing on prices. Meanwhile, the new storage season kicks off on 1 April, while concerns over the pace of storage injections still persist, given the lower level of inventories. The latest GIE data shows that storage is 33.7% full as of 29 March, below the five-year average of 45% and lower than the 58.7% levels seen at the same stage last year.

China has issued its second batch of export quota for clean products, with 12.8mt of exports allocated to refiners. The export quota is down 8.6% compared to last year. In its first quota, China allowed refiners to export around 19mt of clean products, similar to the first quota for 2024.