Oil prices are likely to remain buffeted by supply fears as long as the conflict in the Middle East continues. However, we think there will be support on the demand side later in the year as monetary policy in most major economies is loosened. By contrast, we expect further falls in the prices of European natural gas and Asia LNG amid ample supply and high stocks. Meanwhile, policy stimulus in China should at least stabilise the property sector and bolster demand for industrial metals this year. Precious metals demand should also hold up, although we think most of the good news on interest rate cuts is factored in. Finally, we think the big declines in grains prices are now behind us, but the prices of soft agriculturals should ease back as the negative impact of El Niño fades.
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