Oil market remains oversupplied despite robust demand
The price of crude oil (Brent) continued its downward trend, which has persisted since the beginning of the year, in the final months of the year. Although demand remained robust, particularly from China, and further US sanctions against Russian oil companies were announced, concerns about rising oversupply due to the ongoing reduction of production cuts by OPEC+ prevailed on the oil market. Although the cartel has no plans to increase production in the first three months of the new year, it is likely to continue striving to gain further market share. However, the significant increase in seaborne oil stocks as a result of US sanctions is likely to make it difficult for OPEC+ to regain market share quickly. Nevertheless, the continuing negative expectations of some market participants and stronger than expected demand could open the door for some positive surprises.
Seaborne oil stocks rise significantly due to US sanctions
This year’s global seaborne oil stocks (in million barrels) as well as the five-year average and its first standard deviation
Gold still an important portfolio component in the medium term
After the gold price initially continued its exceptionally strong performance in the fourth quarter, the precious metal witnessed a brief sell-off at the end of October due to technically overheated indicators and a resulting positioning flush out. Recently, however, the gold price has stabilised above the USD4,000/ounce mark despite a stronger USD. Looking ahead to the coming year, the precious metal is likely to remain an important component of portfolios in an environment of ongoing geopolitical uncertainty, increased inflation volatility, fiscal dominance and continued central bank purchases, even though the biggest price increases are likely to be behind us. Smaller than expected interest rate cuts and already positive sentiment could at least raise the bar for further, significant, price increases next year.
Share of foreign gold reserves rises significantly
Officially reported foreign gold and treasury holdings as a percentage of total reserves
A tight supply is likely to continue to support industrial metals
Industrial metal prices have developed positively overall in recent months, but under the hood, they have shown some idiosyncrasies. While increasing production losses have led to a shortage in copper supply and rising prices, the nickel price has suffered from an oversupply. While copper demand was boosted this year from China’s solar industry, it is likely going to be significantly lower next year. Incremental purchases from Europe and a recovery in demand from the US are nevertheless likely to lead to a growing supply deficit for copper in 2026. The same applies to aluminium, where Chinese production capacity has already been maxed out for some time.
Mixed picture on industrial metals since the start of the year
Development of zinc, nickel, aluminium, copper, tin and lead indexed to 100 on 1 January 2025
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