Global commodity prices rebound in November on higher energy prices

Global commodity prices rose 1.9% over the previous month in November, contrasting October’s 1.7% decrease and marking the third month-on-month increase in the last five months.

November’s increase in prices was driven by a rebound in energy prices owing to rising optimism related to both an extension to the oil cut deal and a preliminary trade deal between China and the U.S. That said, the resurgence in market optimism over a trade deal between the world’s two largest economies also dented prices for precious metals, via reduced safe-haven demand, while the frail global economic backdrop continued to weigh on prices for base metals. Meanwhile, oversupply worries weighed on agricultural prices in November.

FocusEconomics Consensus Forecast panelists expect global commodity prices to tick up 0.7% in Q4 2020 over the same period in 2019 (previous edition: +0.3% year-on-year). Solid increases in prices for base metals and agricultural products will spearhead the uptick. Meanwhile, prices for energy and precious metals are seen rising only marginally next year. All in all, the outlook for global commodity prices remains volatile, with uncertainty over the OPEC+ oil cap deal, fragile global growth and a possible escalation of the trade war representing major risks to the forecast. Global commodity prices are expected to firm up in 2021, with panelists forecasting a 5.1% year-on-year gain in Q4 2021. 


 


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