Oil Gains, Metals Pressure, and Fertilizer Optimism Define Commodity Landscape

Global commodities are experiencing sharp and varied movements this May, shaped by geopolitical tensions, evolving trade dynamics, and shifting supply-demand patterns. From energy and metals to agricultural products, markets are navigating a highly dynamic environment that is keeping investors and traders alert.

Oil Rebounds and Natural Gas Outlook Brightens

Oil prices have staged a notable rebound, with Brent crude climbing roughly 3% to $62.84 per barrel. This recovery comes amid optimism over upcoming U.S.-China trade talks and recent progress on the U.S.-U.K. trade agreement. Despite the positive momentum, the International Energy Agency has lowered its global oil demand forecast for 2025 by 730,000 barrels per day, reflecting concerns over lingering trade tensions and the risk of oversupply. Saudi Arabia’s strategic move to increase oil production after years of cutbacks has added complexity to the market. This has created a so-called “smile” pattern in the futures market—indicating near-term scarcity followed by expectations of oversupply later in the year.

Natural gas markets are also heating up. In the U.S., natural gas prices are expected to surge by 51% in 2025, largely due to soaring demand for liquefied natural gas (LNG). Meanwhile, European gas markets are projected to rise a modest 6% this year before retreating in 2026. For an in-depth look at these projections, check out Ecofin Agency.

Metals Face Declines as Agriculture Splits Into Winners and Losers

In the metals sector, the outlook is less rosy. Prices are projected to decline by 10% in 2025 and an additional 3% in 2026 due to overcapacity, softening demand, and global monetary uncertainties. However, tin has emerged as an outlier, with prices expected to rise thanks to tight supply conditions.

The agricultural space is witnessing a split. Fertilizer markets have remained resilient despite mixed earnings. Canadian giant Nutrien, for example, remains bullish on the fertilizer outlook, pointing to strong demand and supply bottlenecks as drivers of potential price increases. Conversely, the grain sector is under pressure. Archer Daniels Midland (ADM) reported a sharp drop in profits from its commodity trading and processing operations, blaming trade frictions and weaker export flows. For live updates, visit Reuters.

Precious Metals and Rare Earths React to Global Shifts

Gold has shown volatility, falling over 1% following news of the U.S.-U.K. trade deal. The agreement has fueled hopes for similar global deals, dampening the safe-haven demand for gold. Meanwhile, rare earth minerals—critical for AI technologies, semiconductors, and renewable energy—are drawing heightened attention. With China controlling a dominant share of global refined rare earths, the market remains highly vulnerable to supply shocks.