**Market Outlook**
Oil prices crashed over 3% on Monday while gold continuously hit new historical highs and copper surged after volatile trading, creating a tale of two markets in the commodities space. Oil extended Friday's nighttime session losses, with crude rapidly falling over $3 after an initial spike, giving back most of last week's rebound gains. The efficient cooling of geopolitically-driven price increases reflects the high flexibility maintained by market participants.
On the geopolitical front, Trump announced a 20-point plan to end the Israel-Hamas conflict, which Israel has reportedly accepted. Multiple Arab and Islamic countries, including Saudi Arabia, issued joint statements welcoming Trump's announcement to end the Gaza war. They expressed readiness to actively cooperate with the US and relevant parties to finalize the agreement and ensure its implementation. Qatar and Egypt have submitted the Gaza peace plan to Hamas negotiating teams, with Hamas promising to "responsibly" review the plan and respond accordingly.
Additionally, the US government shutdown remains in limbo between both houses of Congress. While historically such situations have been avoided multiple times, markets remain uneasy about this uncertainty.
**Supply and Demand Fundamentals**
Supply and demand factors represent the core driver behind oil's retreat. The spot market continues cooling, with Middle East crude benchmarks Oman and Dubai spot premiums plunging below $1 per barrel on Monday, hitting near five-month lows. Traders indicate that the pause in purchasing activity following completed procurement rounds contributed to the decline.
Markets are also focusing on increased supply prospects, following reports that OPEC+ plans to raise production again in November. Current oil tanker freight rates remain at yearly highs while substantial crude supplies are in transit, making inventory accumulation a potential bearish factor going forward.
During the National Day holiday, relevant OPEC+ member countries will convene on October 5 to decide November production plans. Reports suggest Saudi Arabia may slightly raise official prices. On supply and demand fundamentals, focus remains on Middle East physical market trends and petroleum inventory changes.
Geopolitical factors may continue causing disruptions, with oil prices adjusting constantly based on various news flows. Different weighting of factors creates varying viewpoints among market participants, requiring attention to mainstream capital flow shifts. Today marks the final trading day before the domestic holiday, emphasizing the importance of proper risk management.
**Daily Market Data**
【1】WTI crude futures closed down $2.27 (-3.45%) at $63.45/barrel; Brent crude futures fell $2.13 (-3.08%) to $67.09/barrel; INE crude futures dropped 2.87% to 480.3 yuan.
【2】US Dollar Index fell 0.26% to 97.94; Hong Kong Exchange USD/CNY declined 0.29% to 7.0869; US 10-year Treasury bonds rose 0.21% to 112.53; Dow Jones Industrial Average gained 0.15% to 46,316.07.
**Recent Key Developments**
【1】**Middle East Crude Spot Premiums Fall to Near Five-Month Lows** - Middle East crude benchmarks Oman and Dubai spot premiums crashed below $1/barrel on Monday, hitting near five-month lows - Traders cited paused purchasing activity following completed procurement as a contributing factor - Markets focus on increased supply prospects amid reports of OPEC+ November production increases - OPEC+ may approve production increases of at least 137,000 bpd at Sunday's meeting, encouraged by higher oil prices to seek greater market share
【2】**Russia's Finance Ministry to Resume 2% Annual Indexation Once Oil Hits $55/Barrel** According to sources, Russia's Finance Ministry plans to resume its 2% annual indexation after gradually reducing oil price forecasts in fiscal rules to $55/barrel by 2030. Finance Minister Siluanov previously stated his department is reducing forecast prices by $1 annually from current $60/barrel to $55 by 2030, applicable to the 2026 federal budget draft and 2027-2028 planning period. The ministry expects price declines and indexation resumption in 2031 will enhance budget resilience without requiring significant spending cuts.
【3】**Saudi Arabia Expected to Raise November Asia Crude Official Prices** - The world's largest oil exporter is expected to raise November official selling prices to Asian buyers, tracking Middle East benchmark gains - Six refining industry sources indicate November flagship Arab Light crude official prices may rise 20-40 cents/barrel to $2.40-2.60/barrel range - Other grades including Arab Extra Light, Medium, and Heavy may see November official price increases of 30-60 cents/barrel versus October - Dubai swap premiums have risen 52 cents/barrel month-to-date in September, consistent with forecasts - The premium touched a six-month high of $3.63/barrel on September 15 due to rising supply risks from potential additional restrictions on Russian and Iranian oil - Market momentum lost steam last week as news of resumed crude exports from Iraq's Kurdistan region intensified oversupply concerns - One respondent noted Saudi Arabia may avoid sharp price increases given ongoing 2026 term supply negotiations with customers, while rising freight costs limit refineries' ability to pay higher oil prices - OPEC+ may approve production increases of at least 137,000 bpd at Sunday's meeting, encouraged by higher prices to seek greater market share - Saudi crude official prices are typically released around the 5th of each month, setting trends for Iranian, Kuwaiti, and Iraqi oil prices, affecting approximately 9 million bpd of crude shipped to Asia - Saudi Aramco sets crude prices based on customer recommendations and past month's crude value changes calculated from yields and product prices - Saudi Aramco officials decline to comment on monthly official prices per policy