Malaysian palm oil futures surged to their highest level in 15 weeks on Friday, extending gains for a third consecutive week as rising crude oil prices and a fresh Indonesian biodiesel mandate bolstered demand expectations for the edible oil. Main Developments The benchmark palm oil contract for October delivery on the Bursa Malaysia Derivatives Exchange closed at 4,723 ringgit ($1,155.33) per metric ton, up 13 ringgit or 0.28% for the day. Over the week, the contract posted a 2.74% gain. Dalian's most-active soyoil contract rose 1.33%, while its palm oil contract climbed 1.66%. In contrast, Chicago Board of Trade soyoil prices fell 0.99%. Read also: Why Pakistan is pressing the SCO to act on Afghan Taliban Background Anilkumar Bagani, commodity research head at Sunvin Group, attributed the rally to a combination of factors: persistent bullishness in energy prices, a rebound in Dalian's palm olein futures, and potential supply tightness from Indonesia following the launch of its B50 biodiesel mandate. Fresh demand from China also contributed. Oil futures retreated slightly on Friday but remained on track for hefty weekly gains due to concerns over disrupted energy flows in the Red Sea and fears of further escalation in the U.S.-Israeli conflict with Iran. Stronger crude oil prices make palm a more attractive feedstock for biodiesel. Why It Matters Palm oil tracks the price movements of rival edible oils, as it competes for a share of the global vegetable oils market. The rally signals that energy market volatility and biofuel policies are reshaping demand dynamics for agricultural commodities. Brazil could more than triple its palm oil planted area over the next decade by expanding on already deforested Amazon land, said Victor Almeida, president of industry association Abrapalma. Meanwhile, Brazil's 2026/27 soybean crop is expected to fall 2% to 178 million tons, Rabobank said, which could further tighten global vegetable oil supplies. What's Next Market participants will watch for further clarity on Indonesia's B50 mandate implementation and its impact on export volumes. The trajectory of crude oil prices, particularly amid Red Sea disruptions and geopolitical tensions, will remain a key driver for palm oil's near-term direction.