Global Commodity Prices Hit Record; Outlook for Oil, Gold and Gas

Global Commodity Prices Hit Record; Outlook for Oil, Gold and Gas at a Glance. Global commodities index: The S&P GSCI spot index is forecast to rise 28% on average in 2026 and reach a new all-time high in the fourth quarter, driven mainly by higher energy prices. Brent crude: Oil prices are expected to remain above $100 per barrel through the end of the second quarter of 2027 […]

Global Commodity Index: The S&P GSCI cash index is expected to grow by an average of 28% in 2026 and reach a new historical record in the fourth quarter; Mainly affected by rising energy prices.

Brent crude oil: Oil prices are expected to remain above $100 per barrel until the end of the second quarter of 2027. A return to the long-term equilibrium level of around $60 is now forecast for 2029.

Gold: Despite pressure from the strengthening dollar and rising bond yields, central bank purchases and investor demand are supporting gold prices. The average predicted price per ounce of gold in 2026, 2027 and 2028 is $4,515, $4,840 and $5,140 respectively.

It is expected that the price of commodities in the world markets will reach its highest historical level in the fourth quarter of 2026; Because the disruption in Middle East energy supply continues to increase prices. Although we expect prices to decline throughout 2027, the market return to normal will not be smooth and there will be significant differences between the energy, metals and agricultural markets.

This report was published by oxfordeconomics and was rewritten and translated by Safir Arjan's team.

Our forecast shows that the S&P GSCI Cash Index will increase by 28% on an annual average basis in 2026 and reach a new all-time high in the fourth quarter. The main factor of this increase is the growth of energy prices; However, its effects gradually spread to other commodity markets as well, because the increase in the cost of fuel, electricity and transportation increases production costs.

The current situation has similarities with the supply shocks after the Corona epidemic and Russia's attack on Ukraine; Periods where disruptions to production, trade, and logistics chains affected multiple markets simultaneously. However, the current shock is more focused on the energy sector and the outlook for each commodity is significantly different from the other.

Our baseline scenario is for commodity prices to decline gradually in aggregate through 2027 as Middle East exports recover and supply constraints ease. However, the pace of price adjustment will depend on how quickly physical supply recovers and whether geopolitical risks subside.

Oil prices will remain above $100 until mid-2027

Oil is still at the center of the current commodity price shock. We now expect Brent crude oil prices to remain above $100 per barrel on average until the end of the second quarter of 2027, following attacks on Red Sea export infrastructure and continued geopolitical risk.

The September attack on Saudi Arabia's East-West pipeline highlighted the vulnerability of alternative oil export routes. This pipeline used to transport about 4 million barrels of oil per day and allowed Saudi Arabia to export without crossing the Strait of Hormuz. Although the pipeline has partially resumed operations, the risk of further disruption continues to support prices.

✔️ Read more: World oil giant's warning: $200 oil is still a serious scenario

The important point is that with the restoration of export capacity, the main obstacle to the return of prices to normal levels will depend on geopolitical risk rather than physical access to crude oil. Even if sufficient supply reaches the market, continued uncertainty about the region's security could keep prices high.

We still expect the price of Brent oil to approach its equilibrium level in the long term, that is, around $60 per barrel; But now we predict that this process will be completed in 2029 instead of 2028.

The effect of these conditions is not limited to crude oil. The lack of supply in the market of refined products has brought the profit margin of diesel refining in Europe to the range of $100 per barrel and intensified the pressure caused by the increase in transportation and production costs. Rising fuel costs affect diesel-dependent mining, agricultural machinery, and trucking activities, thereby transmitting the energy shock to other commodity markets.

On the eve of winter, the natural gas market is facing limited supply; The outlook remains uncertain

The natural gas market is particularly vulnerable to disruptions in the Middle East; Why liquefied natural gas (LNG) exports are more difficult to divert than crude oil.

Before the start of the conflicts, Qatar and the United Arab Emirates had about 20% of the global LNG trade; But since March, the exports of these two countries have been practically trapped inside the Strait of Hormuz. As a result, gas prices in Europe and Asia, which depend on LNG, are now about 130 percent higher than pre-conflict levels; While the price of Brent oil has increased by 45%.

We expect gas prices to remain high through the winter of 2027-2026 and then decline as global LNG supplies increase. However, the outlook for this market is highly dependent on weather conditions, inventory levels, and the possibility of further disruptions in supply.

European gas reserves are at their lowest level compared to this point in more than a decade. Based on our baseline scenario, reserve levels will drop to just 17% of reservoir capacity by April 1, 2027; A situation that makes the market vulnerable to a colder than expected winter.

A severe cold snap, if accompanied by disruptions to US LNG supplies or gas imported via Norwegian pipelines, could push gas prices to around $35 per million British thermal units (MMBtu). Conversely, moderate weather and continued growth in global LNG supply may limit winter peak prices to around $21 per MMBtu.

However, Europe is in a better position compared to the energy crisis of 2021-2022. Gas demand in this region is about one-fifth lower than the level of 2021, and the increase in LNG import capacity has also provided more flexibility to meet the needs.

These different scenarios show that the path of gas prices does not depend only on the Middle East export trend; Moreover, Europe's ability to manage winter demand and provide alternative sources also plays a decisive role.

The price of gold increases with the continuation of investment demand

Contrary to expectations, gold has not benefited as much as it could have from the Middle East shock. Rising oil prices have reignited concerns about inflation and fueled expectations for a more accommodative monetary policy from the US. These conditions have supported bond yields and the value of the dollar and partially offset the demand for gold as a safe asset.

✔️ Read more: Gold price forecast in the fourth quarter of 2026; Two opposing forces in the market

However, gold purchases by central banks and investor demand continue to support prices. We predict that the average price of gold in 2026 will reach about 4,515 dollars per ounce; This figure will increase to $4,840 in 2027 and $5,140 in 2028.

We expect the number of interest rate hikes by the Federal Reserve to be less than what is currently anticipated in the financial markets. This reduces upward pressure on bond yields and the value of the dollar. At the same time, central banks of emerging economies are expected to continue diversifying their foreign exchange reserves, thereby fostering sustained demand for gold.

The outlook for other precious metals is different. The high price of silver encourages the recycling of this metal and its replacement with other materials, especially in solar applications. Conversely, limited mineral supply supports platinum prices. Palladium is also facing weakening structural demand; Because cars equipped with internal combustion engines are gradually losing their share in the market.

The improvement in supply will determine the rate at which prices fall

The overall commodity price cycle is nearing its peak, but the price adjustment process will be significantly different in different markets.

Oil and gas prices are expected to decrease with the recovery of disrupted supply. In contrast, base metals may face a short-term price correction before structural demand and supply constraints provide further support to prices. Gold is expected to continue its upward trend.

The most important uncertain factor is the speed with which the supply will return to normal conditions. A faster recovery in Middle East exports could accelerate the decline in energy prices and lower transportation and production costs in other commodity markets. Conversely, renewed attacks on regional infrastructure may keep prices high and delay the correction process.