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The global commodities outlook in nine charts

John Baffes's picture
Prices for most industrial commodities, notably energy and metals, continued on a strengthening trajectory in the first quarter of 2017 while agriculture prices remained on a steady path. Those trends – rising energy and metals prices, stable ag prices – are expected to continue through 2017. 
 
Commodity Price Indices, Monthly


Closely watched oil prices are projected to average $55 per barrel in 2017 after averaging $43 per barrel last year. World oil demand continues to grow at a relatively robust annual rate, although that pace has slowed since spiking in 2015.
 
Crude Oil Price, Average


An agreement by the Organization of the Petroleum Exporting Countries (OPEC) and other producers to limit production has exerted upward pressure on oil prices. Prices could spike higher if participants in the accord agree to cut production even more sharply and if non-OPEC members comply with the terms of the deal as rigorously as OPEC members have.  
 
OPEC Crude Oil Production

At the same time, rising U.S. shale production has exerted downward pressure on oil prices. Similarly, if U.S. production is more robust than expected, downward pressure on prices would be greater.
 
U.S. Oil Production
 
U.S. Oil Rig Count


Metals prices are projected to rise 16 percent in 2017, sustaining an upward trend that began at the end of 2015. The outlook is based on strong demand from China combined with supply constraints that include strikes and contract disputes at certain major mines and government policies restricting exports.
 
Metal and Mineral Prices


China’s efforts to boost its commodity-intensive infrastructure and construction sectors have been a key driver of metal demand. China’s share of world metal consumption surpassed 50 percent in 2015.
 
World Refined Metal Consumption


Agriculture prices were broadly stable in the first quarter and are expected to follow that trend throughout the year. The end of the El Niño/La Niña cycle means there is less chance of a sudden spike in agricultural prices.
 
Agriculture Price Indexes


Globally, most food supplies are currently adequate. Stock-to-use ratios for grains – a measure of supply relative to demand – are at 15-year highs.
 
Stock-to-use-ratios

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