Global Commodities: A sense of déjà vu

Global commodities markets face significant volatility driven by geopolitical tensions and policy uncertainty. Ukrainian drone strikes on Russian energy infrastructure have curtailed refinery run rates to 3.6 million barrels per day, tightening international diesel and fuel oil supplies. Simultaneously, European natural gas storage levels remain historically low at 50% as persistent price premiums continue to divert liquefied natural gas cargoes toward Asian markets. Otar Dgebuadze, lead of European natural gas research at J.P. Morgan, notes that these physical energy constraints contrast with the copper market, where price formation hinges on policy rather than fundamental balances. Current copper valuations reflect an embedded uncertainty regarding U.S. Section 232 tariff reviews, creating a competitive tug-of-war for supply between the U.S. and China. Escalatory tariff announcements in the coming weeks could further drive copper prices toward $15,000 per metric ton by late 2026.