Oil Steadies, Metals Diverge, and Food Prices Fall as Global Commodities Shift

As of May 8, 2025, commodity markets are navigating a landscape shaped by geopolitical tension, shifting production decisions, and softening global demand. Recent developments have created ripple effects across energy, metals, and agricultural sectors, offering both opportunities and risks for investors and businesses alike.

The World Bank now forecasts a 12% overall decline in commodity prices this year, with further moderation expected into 2026. This reflects not only improved supply dynamics but also the chilling effects of global economic uncertainty and trade disruptions.

Oil Prices Stabilize Amid OPEC+ Strategy

Oil prices have steadied after months of volatility, with Brent crude trading near $62.59 per barrel and West Texas Intermediate (WTI) around $59.59. The shift follows OPEC+’s recent decision to boost production by nearly one million barrels per day through June, aimed at addressing tight supplies ahead of the summer demand peak. Saudi Arabia’s timely output shift appears to have calmed market nerves, at least in the near term (Reuters).

However, analysts warn that oversupply risks loom later in the year as non-OPEC producers like Brazil and Guyana ramp up output. On the demand side, uncertainty tied to U.S. trade policies and broader economic concerns continues to cloud the outlook. For now, the balance between supply and demand seems tenuous, keeping traders on alert.

Divergent Trends in Metals and Agriculture

In the metals sector, price movements are mixed. Gold has slipped over 1% this week, pressured by a stronger U.S. dollar and reduced safe-haven demand as trade tensions ease. Conversely, silver and platinum are projected to rally, with 2025 gains forecasted at 16.7% and 9% respectively (Ecofin Agency).

Agricultural commodities are facing clear downward pressure. Global food prices are expected to drop by around 7% this year, thanks to improved harvests and waning demand. Notably, corn and soybean prices are forecasted to fall by 2% and 3%, providing some relief to food-importing nations. This downturn may ease some inflationary pressures but also signals weaker economic activity in key markets.

Looking beyond 2025, the World Bank projects continued softness, with an additional 5% decline in commodity prices by 2026—bringing them back to pre-pandemic levels. Energy prices, in particular, are expected to fall 17% this year, while coal prices could plunge by 27%, underscoring the impact of the energy transition and cooling global growth.