Goldman sees ‘bullish concoction’ for global commodities

Yet oil has had a rocky start to 2023, capped by fears over a potential recession in the US and China’s shaky progress in reopening its economy from Covid-related lockdowns. Traders are also tracking the impact of sanctions on Russian oil and product flows. Brent crude futures traded near $84 a barrel in London.

Natural gas prices in Europe dropped to the lowest since September 2021 on Monday, despite the arrival of a cold snap, as liquefied natural gas continued to flood into the continent due to lack of competition from China, where stockpiles of the fuel are full.

This could all change later in the year if a robust recovery in Chinese demand combines with the end interest-rate hikes in major Western economies, Currie said.

“Does anyone remember what happened to oil prices from January of ’07 to July of ’08?” Currie said. “The Fed takes their foot off the brake, China puts the pedal to the metal, Europe starts to grow quickly” and oil prices rose by $100 a barrel, he said.