September through to early October became a wait-and-see period as geopolitical events continue to unfold. The war in Ukraine shows few signs of progress although several episodes of hybrid warfare involving drones have been reported by NATO countries, especially around the Baltic Sea.
The Gaza conflict ended with an agreement based on President Trump’s peace proposal signed on 13 October, although several details still lack clarity. Political turmoil with the US government shutdown, political jitters in France and public protests in the UK are all contributing to markets slowdown, particularly in Europe and Japan.
However, the Volatility Index (VIX) currently stands at 17 and a score below 20 usually means the markets are not worried. In the USA the Federal Reserve (FED) cut interests rate by 0.25 per cent and the European Central Bank (ECB) was unchanged. Further cuts are not expected to exceed 0.25-0.5 per cent for the FED and 0.25 from the ECB.
The US dollar rose slightly in the broad US$ index and towards the euro at US$1.17, still in the range of US$1.15-1.20. Brannvoll ApS forecasts a range of US$1.05-1.20 in 2025, with an average of US$1.12. The next issue of ICR will include forecasts for 2026.
| PRICES AT A GLANCE - 7 October 2025 | ||
| Brent crude oil – bbl | US$65.50 | |
| Coal API 2 | 4Q25 | US$93.00 |
| Cal 2026 | US$100.00 | |
| Coal API 4 | 4Q25 | US$84.00 |
| Cal 2026 | US$93.00 | |
| Petcoke USGC 4.5 per cent S 40HGI | FOB | US$74.50 |
| CFR ARA | US$105.00 | |
| Petcoke USGC 6.5 per cent S 40HGI | FOB | US$67.50 |
| CFR ARA | US$98.00 | |
Oil
Oil stayed in the US$65-69 range, driven by geopolitics and lower production increases from OPEC+ at its 5 October meeting, to support the price after the IEA warned that the market could see a supply glut during 2026 due to extra US production.
Ukrainian attacks on Russian refineries added some short-term support to the market and analysts are predicting a possible move to the low US$50s in the 1H26 if OPEC+ continues to increase production. Conversely the gas market had a few upticks based on Russian attacks on Ukrainian gas installations, giving rise to fears of the need for more imports to the region, which spilled over to higher EUA prices.
Brent oil is trading one per cent lower at US$65.50. TTF (Cal26) gas prices rose to EUR33.00 and EU gas storage increased from 79 to 83 per cent, still below the previous two years. For Brent oil, Brannvoll ApS forecasts a trading range of US$65-90 and an average of US$75 for 2025.
Coal
The coal market accelerated its decline in September and October following a drop in the energy complex, lower demand and good supply. Colombian and Russian sellers are still offering good discounts and South African shipments have increased. Russian coal producers are suffering and about 25 per cent of producers have been shut down, while more could follow if the low prices persist. Several cement makers are switching to coal due to higher petcoke prices.
The API2 4Q25/front-quarter (FQ) contract dropped four per cent MoM to US$93, putting the expected range down to US$85-100. The Cal26 contract fell three per cent to US$100. Brannvoll forecasts a range of US$100-130 and averaging at US$125 for the FQ contract. This is likely to be US$15 lower.
API4 4Q25/FQ contracts dropped by nine per cent to US$84, lowering the short-term range to US$80-95. Brannvoll ApS forecasts a range of US$100-125 in 2025 for API4.
Petcoke
The petcoke market again went against the flow and saw higher prices due to increased demand but also a tight output in the short term as the hurricane season is beginning, which always brings with it the risk of shutdowns and reduced production.
Higher freight rates to key markets, in combination with lower coal prices, should have kept a solid lid on the FOB prices, but based on reduced supply, these still managed to increase. Türkiye cancelled retaliatory import duties on US materials and India decreased tax from 28 to 18 per cent on petcoke, creating impetus for demand.
Venezuela is currently out of the market, reflected in the increase of the spread between medium- and high-sulphur types to US$7. In combination with US Gulf refiners increasing imports of heavier crude oil, production of the 6.5 per cent sulphur (S) grade will rise, while output of medium-sulphur grades will decline.
The USGC FOB 6.5 per cent contract increased five per cent MoM to US$67.50 and the discount to API4 fell from 43 to 36 per cent. The USGC ARA 6.5 per cent contract increased six per cent MoM at US$98.00, the discount sharply down 16 per cent based on high freight and low coal.
The USGC FOB 4.5 per cent S contract increased MoM to US$74.50, with the FOB discount to API4 at 29 per cent. The CFR ARA 4.5 per cent contract was up eight per cent at US$105, with the discount down at 16 per cent, well below the normal 20 per cent.
by Frank O. Brannvoll, Brannvoll ApS, Denmark
