Commodity markets opened Thursday with a cautious tone as investors shifted their focus from yesterday’s inflation report to today’s Producer Price Index (PPI) release for additional clues on the Federal Reserve’s path for interest rates. While geopolitical tensions in the Middle East continue to influence commodity markets, weaker demand forecasts and evolving supply expectations have created a more balanced outlook across both energy and metals.
Oil & Gas
Energy markets traded lower this morning as investors weighed softer global demand expectations against persistent geopolitical supply risks. West Texas Intermediate (WTI) crude fell approximately 2.0% to $81.56 per barrel, while Brent crude declined 1.8% to $87.36 following yesterday’s sizeable U.S. crude inventory build—the largest weekly increase since January 2023. Both OPEC and the U.S. Energy Information Administration recently lowered their 2026 oil demand forecasts, reflecting concerns over slowing global consumption and the ongoing disruption of shipping through the Strait of Hormuz. Despite weaker demand projections, supply risks remain elevated as the Strait remains largely blocked, Russian refinery disruptions continue, and Saudi Arabia redirects exports through alternative routes to avoid regional shipping threats. Natural gas also traded lower, with investors awaiting the latest EIA storage report and monitoring warmer U.S. weather forecasts that could support late-summer demand.
Energy-related ETFs reflected the mixed outlook, with exploration and production funds continuing to outperform broader energy indices over the past week despite today’s softer commodity prices. Crude oil funds remain well ahead over the past month, highlighting how geopolitical disruptions have supported oil prices even as demand forecasts have moderated. Natural gas funds also continue to experience elevated volatility as weather forecasts and storage expectations remain the primary drivers of price action.
Metals & Mining
Metals markets softened modestly as investors took profits following recent gains and awaited today’s inflation data. Gold declined 0.6% to approximately $4,441 per ounce, while silver fell nearly 1.0% and copper slipped 0.4%. A stronger U.S. dollar and easing concerns surrounding Middle East tensions contributed to pressure on precious metals, while aluminum prices moved lower after Emirates Global Aluminium announced plans to restore full production at its Al Taweelah smelter by early 2027 following earlier disruptions. Corporate news remained active across the sector, with several mining companies reporting quarterly earnings, updating production guidance, and highlighting ongoing development projects across gold, copper, lithium, and uranium operations.
Despite today’s pullback in commodity prices, mining-related ETFs continue to show strong momentum over the past month, particularly among gold and silver miners. Precious metals funds have benefited from sustained investor interest during recent market uncertainty, while diversified mining funds remain supported by longer-term expectations for infrastructure spending and electrification-related demand for industrial metals.
Markets remain focused on the balance between slowing global demand and persistent geopolitical supply risks. Today’s Producer Price Index (PPI) report will provide another important data point for investors assessing the outlook for inflation and interest rates, while developments in the Middle East continue to influence both energy and precious metals. Although commodity markets have become more volatile in recent weeks, supply constraints and resilient long-term demand continue to provide underlying support for many areas of the commodity complex.
