Massive Selloff Today: Start Of Something Bigger? | Ole Hansen

Rising energy costs and geopolitical instability are driving significant market volatility, as investors increasingly demand tangible returns on massive AI-related capital expenditures. Brent crude prices remain elevated due to refinery capacity constraints and the high costs associated with navigating the Strait of Hormuz, rather than simple supply shortages. While speculative hedge fund activity has pressured gold and agricultural commodities, long-term fundamentals remain supportive, particularly as China’s economic shifts influence global demand. Ole Hansen, Head of Commodity Strategy at Saxo Bank, notes that despite oil flows returning to pre-war levels, the market remains fragile. Ongoing risks, including potential supply disruptions and the impact of a super El Niño, suggest continued volatility. Copper maintains a bullish long-term outlook, though short-term growth is tempered by uncertainty surrounding data center demand and potential shifts in global trade policies.