Due to the ongoing economic slowdown around the world, commodity prices are expected to fall on average in 2025. While oil prices are expected to fall due to slower demand growth and increased production, natural gas prices are likely to rise as countries around the world continue to rely on LNG as a 'transition fuel'. Demand for critical minerals is expected to continue to increase, but this will not be reflected in all commodity prices. The race to expand lithium production has created an oversupply of lithium minerals, which is expected to eventually turn into a shortage as EV adoption increases rapidly in the coming decades. On the other hand, demand for copper is increasing in some countries as the renewable energy industry expands, and overall demand for copper is expected to increase. However, China, which has been driving demand for copper, is likely to play a smaller role in the copper market than expected as its economy continues to slow.
oil
As oil prices fell in 2024, Demand in China has decreased Meanwhile, crude oil production increased worldwide. China is the world's largest oil importer and second largest consumercontributing about 15 percent of global demand. However, consumption contracted in 2024 due to slower economic growth following the COVID-19 pandemic, widespread deployment of renewable energy projects, and increased adoption of electric vehicles (EVs) nationwide. .
International Energy Agency (IEA) November oil market information reportThe IEA predicts global oil demand will increase by nearly 1 million barrels per day in 2023, compared to nearly 2 million barrels per day in 2023. The IEA suggests that this is primarily because “the slowdown in growth since recent years reflects the end of post-oil demand.” Eliminating pent-up demand and substandard global economic conditions due to the pandemic, and introducing clean energy technologies. ”
Experts predict that ongoing economic problems around the world and rising supplies could push Brent's benchmark price below $70 a barrel this year. In 2024, U.S. crude oil production averaged 13.2 million barrels per day through 2024, surpassing the previous record of 12.9 million barrels per day set in 2023. Production is expected to continue increasing under the new Trump administration, likely creating a glut and driving prices down.
gas
Oil prices are expected to fall next year, but gasoline prices are even more uncertain. Gasoline prices have been rising in recent weeks due to increased winter demand and other factors. ukrainian Stop A decline in Russian gas exports to Europe at the beginning of the month made the outlook even more uncertain. The move has increased gas prices, but the situation could change quickly if Ukraine decides to reopen export links.
Gas prices could rise by about 40% this year to $3.4 per million British thermal units (MMbtu) in 2024, compared to an average of $2.4 per million British thermal units (MMbtu), according to recent BMI forecasts. This is expected to be primarily driven by increased demand in the LNG sector. And net pipeline exports will also increase.
Gas is considered a transition fuel in some parts of the world, and demand for fossil fuels remains strong. Europe and Asia are leading demand growth, with the US willing to follow suit, with several new LNG projects scheduled to come online in 2025. U.S. Energy Information Administration (EIA) I'm looking forward to it The country's LNG exports are expected to increase by 15% this year, reaching nearly 14 billion cubic feet per day (Bcf/d).
lithium
Lithium production rose rapidly in 2024, but demand growth for the key mineral slowed as automakers curbed their EV manufacturing ambitions as consumer intake fell short of expectations. The surplus seen last year is expected to decline in 2025 from 84,000 tonnes of lithium carbonate, representing a surplus of 33,000 tonnes. It is likely to continue falling until 2027 as EVs become more popular and global competition to expand lithium production slows down.
Rick Anton, chairman of UK-based Savannah Resources, said he was optimistic about the lithium market's recovery. anton explained“My confidence in this recovery is due to the secure foundations of the lithium market, built on emissions reduction legislation in all major global markets and the established position of lithium-ion batteries as the energy storage technology of choice. Maintained in multiple applications. ”
copper
China, which consumes about half of the world's copper production, experienced an economic slowdown in 2024, leading to a decline in copper demand. However, advanced manufacturing and clean energy activities are increasing around the world and are expected to contribute to demand growth in the coming years. Global copper mine production increased by about 5% in 2024 due to expansions and new projects, as companies around the world brace for increased long-term demand due to the global green transition.
Copper prices expected to average out $9,477 per ton In 2025, it will rise to $9,690 per ton. Faster-than-expected adoption of renewable energy in some countries, accelerating global infrastructure spending and delays in major mining projects could contribute to price volatility in the coming years.
Written by Felicity Bradstock, Oilprice.com
