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Commodities Chart Pack (Nov. 2024)

OPEC+ and China, not Trump, will drive prices in 2025

Trump’s election victory won’t have a big impact on commodity markets in the short term. US oil and gas production is near record highs and prices, not policy, will be the key driver of drilling next year. US natural gas prices will rise as new LNG export facilities come online but oil prices will fall if, as we expect, OPEC+ finally begin to increase output. Admittedly, OPEC+ production policy is uncertain and there’s a good chance members extend their output curbs deeper into 2025. But this approach is not sustainable forever as members will need to exploit oil reserves at some point. OPEC+’s hopes are probably pinned on demand in China. However, although China’s fiscal stimulus package will lift economic activity and in turn commodity demand this will only prove temporary due to poor demographics and slowing urbanisation.

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