Vegetable oil markets moved higher alongside Brent crude before retreating as energy prices abruptly reversed.
Brent crude climbed to nearly $99 per barrel early in the week amid escalating tension in the Middle East. The rally lifted prices across palm, soybean, rapeseed and sunflower oils. However, the market quickly cooled after signals that the conflict could de-escalate and discussions emerged about releasing oil from reserves.
Palm oil followed the same pattern. Benchmark BMD crude palm oil reached $1,123 per tonne before easing back toward $1,096. Malaysian stock data added pressure after inventories fell only slightly to 2.7 million tonnes, remaining higher than many market participants expected.
Trading activity in physical markets remains cautious. Buyers are waiting for clearer direction in energy prices, freight rates and vegetable oil markets, while sellers are holding out for stronger values. The result is a wide gap between bids and offers and relatively limited trading volumes.
Soybean oil and rapeseed oil also tracked movements in Brent. However, softer energy prices and ongoing harvest progress in South America could limit further gains in the near term.
Sunflower oil prices strengthened as well, supported by the broader vegetable oil complex, though logistical challenges and limited vessel availability are slowing trade.
Energy markets remain the dominant influence. With uncertainty surrounding the Middle East conflict and the potential closure of the Strait of Hormuz, vegetable oil prices are likely to remain volatile in the weeks ahead.
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