Natasha Kaneva from JPMorgan, speaking on “Bloomberg The Close,” emphasizes that the International Energy Agency (IEA) has reduced its global oil demand forecast for 2025 by nearly one third, warning of an oversupply that could extend into 2026. She explains that her baseline view for over a year has been that significant oversupply would affect the market in both 2025 and 2026, making supply-side factors more influential than recession fears in shaping oil price trajectories.
She points to a change in the reaction function of Bakken producers, who have decided to increase output even as oil prices decline—a shift that suggests traditional market signals have altered and raises new questions about OPEC’s approach to supply management. Historical data shows that a one million barrel per day cut from OPEC used to boost oil prices by about ten dollars, though this increase diminished to eight dollars last year and has dropped to four dollars this year. This indicates that sustaining lower production no longer generates the same price benefit.
Kaneva contends that raising supply to maximize revenue becomes more logical in this environment, particularly if oil prices gravitate around sixty dollars. She adds that the market has already hit that level about eight months earlier than her initial 2025 forecast, partly because an 80% probability of a mild recession is being priced in, along with the prospect of OPEC adding another one million barrels per day to the market.
She addresses the influence of the US dollar by stating that a weaker greenback usually supports oil prices, yet current price behavior is more closely linked to oversupply than currency fluctuations. She notes that the perceived price floor of about seventy dollars per barrel, once reinforced by OPEC interventions and the Biden administration’s readiness to refill the Strategic Petroleum Reserve near sixty-nine dollars, seems less assured under the Trump administration, which has signaled openness to significantly lower oil prices. Kaneva believes there will be no market intervention unless West Texas Intermediate hits fifty dollars, a threshold that might come sooner if supply continues to outstrip demand.
In examining the broader commodity space, she highlights that copper appears too expensive at current levels—around eighty-three hundred dollars per metric ton—given a projected 60% probability of a recession, which historically suppresses industrial metals. Although a potential fourth-quarter stimulus in China could prop up copper demand, near-term pressure remains high, especially with ongoing discussions of tariffs and trade restrictions. She clarifies that copper is not currently designated as a critical mineral, a status that would expedite permitting and incentivize domestic production, and she emphasizes that the US does not fast-track copper mining the way it does oil and gas. Major copper producers are calling for export restrictions on ore and scrap rather than tariffs on imports, but Kaneva favors adding copper to the critical mineral list and expanding supply to stabilize the market.
Turning to precious metals, she references her earlier forecast of four thousand dollars for gold by 2027 but acknowledges that accelerating market shifts could bring gold closer to that target much sooner. She cites historical patterns to illustrate how the time needed to reach successive price milestones has decreased sharply, pointing out how it took thirty-eight years to surpass one thousand dollars, twelve years to exceed two thousand, and then less than five years to advance beyond three thousand. She argues that the same compressed timeline suggests a faster climb toward four thousand, which indicates robust investor demand for gold as a hard asset in an environment shaped by persistent supply factors, fluctuating political signals, and evolving economic expectations.
The IEA’s recent actions show how dramatically expectations have changed. The agency’s decision to reduce its global oil demand forecast for 2023 by nearly one-third signals not merely a temporary correction but rather the crystallization of a long-term structural imbalance in the global oil market—one increasingly defined by chronic oversupply. While earlier market jitters centered on looming recessionary conditions, the core disruption appears rooted in evolving producer behavior, particularly among U.S. shale producers such as those in the Bakken.
Kaneva notes that OPEC’s traditional method of propping up prices through production cuts is losing its potency. A cut of one million barrels per day that once produced a $10 price bump now yields only about $4. With oil trading near $60 per barrel—levels JPMorgan had initially projected for 2025—Kaneva argues that increasing supply to maximize revenue under low-price conditions may make more sense for OPEC and its allies. This shift has implications for both global price stability and the internal cohesion of OPEC+, whose members may find it more profitable to sustain or boost output rather than coordinating supply reductions.
These dynamics intersect with an 80% probability of a mild global recession (according to market pricing), the prospect of OPEC adding another one million barrels per day, and a weaker U.S. dollar that historically supports commodity prices. However, the physical oversupply appears to be the more dominant factor, overpowering what might otherwise be a tailwind from currency weakness. Analysts point out that while many fund managers expect the dollar to decline over the next year, the abundant global supply of crude has kept oil prices in check.
Political considerations loom large. Under the Biden administration, there was an explicit pledge to refill the Strategic Petroleum Reserve near $69 per barrel, establishing a perceived price floor. Yet with the possibility of a Trump administration that has historically favored significantly lower oil prices, intervention may not occur until WTI sinks to $50 per barrel. Should supply continue to overwhelm demand, this political shift could exacerbate any downward momentum in crude prices, potentially pushing Brent into the mid-$50s and WTI into the high $40s.
Meanwhile, copper prices have garnered attention for what many analysts see as inflated valuations. Despite trading at more than $9,000 per metric ton at one point, global recessionary risks—estimated at 60% for North America by JPMorgan economists—pose a strong headwind. While Chinese stimulus in the fourth quarter could provide temporary relief, trade policies remain a wild card. The Trump administration’s contemplation of tariffs on copper imports has spurred calls from major producers to reorient policy toward export restrictions on ore and scrap, rather than higher tariffs on imports.
Beyond energy, copper has experienced heightened volatility due to multiple factors: an uneasy balance between expectations of Chinese stimulus, weaker physical demand and manufacturing activity, and the Trump administration’s ongoing discussion of tariffs on Chinese imports. Though copper prices saw temporary boosts—rising in part because of exempted tariffs and the hope of a fourth-quarter demand uptick—Citi has cut its three-month copper price forecast to $8,800 per tonne, reflecting the market’s increasingly cautious stance.
Precious metals, particularly gold, continue to exhibit remarkable resilience. Kaneva reaffirms an earlier forecast that sees gold reaching $4,000 per ounce by 2027, but the market’s accelerated momentum may vault prices toward that milestone far sooner. The pattern of compressed time intervals between gold’s major price breakouts—decades for the first thousand-dollar climb, then just a few years to move beyond the next major thresholds—suggests investors are increasingly treating gold as a hedge against both currency volatility and broader financial instability.
By April 2025, the IEA once again significantly revised its global oil demand growth forecast for the year, reducing it by nearly one-third to 730,000 barrels per day. This cut reflects ongoing concerns over a persistent oversupply, now expected to extend at least through 2026. According to the IEA, the surplus largely stems from rising production in non-OPEC+ countries and a slowdown in demand growth exacerbated by trade tensions and a cooling global economy.
At the same time, OPEC and its allies decided to increase oil production by 411,000 barrels per day, further pressing down on prices. Brent crude briefly dipped below $60 per barrel—its first move into sub-$60 territory since the pandemic—underscoring the cartel’s apparent preference for defending market share rather than supporting prices.
Kaneva continues to emphasize that the historical correlation between OPEC’s supply cuts and price appreciation is weakening. Recent supply reductions have yielded diminishing price gains, reinforcing the notion that revenue maximization in a low-price environment might favor higher output. She also observes that current oil prices have essentially converged with JPMorgan’s 2025 forecasts two years ahead of schedule, signifying how swiftly the market is recalibrating.
Meanwhile, the U.S. administration under President Trump has influenced market dynamics through a series of trade tariffs that, while not directly targeting oil, have sown economic uncertainties and contributed to downward revisions of global oil demand growth. The IEA notes that such policies create ripple effects in global consumption patterns, intensifying the oversupply problem.
Moreover, Trump’s approach to the Strategic Petroleum Reserve suggests a higher tolerance for lower prices, with some analysts believing that no government-led market intervention would occur unless WTI prices fell to $50 per barrel. Should that scenario materialize, it would further erode the concept of a “price floor” that had been guided by prior SPR refill commitments.
Amid these shifting landscapes, gold has emerged as a clear beneficiary, reaching record highs in 2025. The underlying drivers remain consistent: mounting economic uncertainty, intensifying trade tensions, and persistent demand for safe-haven assets. Projections of $3,400 per ounce by late 2025—and even $4,000 by 2027—align closely with Kaneva’s earlier estimates, though accelerating timelines suggest these targets could be met well ahead of schedule.
Taken together, the global oil and commodities markets appear to be entering a new era in which traditional assumptions about supply, demand, and policy intervention are repeatedly challenged. As surplus output collides with political uncertainties, trade tensions, and evolving producer strategies, price signals have become increasingly difficult to interpret. Copper’s status remains in limbo despite its strategic importance, and gold continues its rapid climb, signifying broader concerns over inflation, currency stability, and recession risks.
MarketWatch, along with other financial outlets, has noted that these complex interdependencies—ranging from OPEC’s revenue strategies and U.S. tariff policies to the decoupling of copper supply from streamlined permitting—point to heightened volatility in the coming years. In this environment, producers, investors, and policymakers alike must adjust their strategies, anticipating that structural oversupply, shifting alliances, and growing geopolitical frictions will dictate the contours of the commodities landscape for the foreseeable future.
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