Skip to main content

Still a bumpy road ahead for commodity prices

The seemingly unstoppable rise in commodity prices gave way to sharp corrections this week, though the big picture is that prices remain extremely elevated. We suspect commodity prices will continue to whipsaw around in the weeks ahead, as markets move quickly to discount the war in Ukraine and its consequences into commodity prices. On balance, though, the risks to prices are still very much skewed to the upside, not least as the West could further tighten restrictions on Russia’s commodity exports. In fact, in a scenario where there is a complete ban by the West on imports of Russian energy, we think the price of crude oil (Brent) could quickly reach $160 per barrel (from a little over $110 currently). Events surrounding the war in Ukraine will continue to drive commodity prices next week. We will also be keeping a close eye on the January and February activity data out of China, which will be released on Tuesday. We think these data will come in weaker than the consensus expects, which would support our view that China’s demand for commodities is set to remain soft this year.

Become a client to read more

This is premium content that requires an active Capital Economics subscription to view.

Already have an account?

You may already have access to this premium content as part of a paid subscription.

Sign in to read the content in full or get details of how you can access it

Register for free

Sign up for a free account to gain:

  • Unlock additional content
  • Register for Capital Economics events
  • Receive email updates and economist-curated newsletters
  • Request a free trial of our services


Get access