Plenty of oil on water; revising down our gold forecast
While the fallout from US sanctions on Russian oil majors has yet to manifest in the data, Russian seaborne oil exports are strong, and a wider deluge of oil in transit is still set to come ashore. OPEC+’s decision to halt further increases to its output quotas probably reflects the impending oil glut. We think that downward pressure on oil prices will prevail, supporting our below-consensus forecast of $60pb by end-25 and $50pb by end-26.
The unwinding of FOMO-driven investment into gold has led to a downward correction in the price, and we think that weakening structural tailwinds will further dampen the outlook for the yellow metal. Elsewhere, copper and aluminium have rallied year-to-date, but weak demand from China’s construction sector supports our view that both industrial metals prices will edge down from here.
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