There was a lot of movement on the raw materials and energy market in 2024. However, according to experts at US investment bank Wells Fargo, changing macroeconomic conditions could provide a tailwind in 2025. This is what the analysts predict.
• 2024 will be characterized by weak oil prices and a surge in gold
• Wells Fargo provides an outlook on developments in the raw materials market
• The energy sector and precious metals are likely to see particular growth
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The year 2024 was characterized by a lot of movement on the raw materials and energy market. Numerous uncertain factors, such as tensions in the Middle East, the war in Ukraine, but also the long-uncertain outcome of the US presidential election, have led to a rise in the price of gold. This reached a new record high of $2,787.29 in October 2024.
The situation was different on the oil market, which in 2024 was characterized by concerns about demand and falling prices, particularly in the second half of the year. In December last year, the Organization of the Petroleum Exporting Countries (OPEC) lowered its expectations for global demand for black gold for the fifth time in a row. The oil cartel assumed lower growth in daily oil demand as early as 2024 and also lowered its forecast for 2025 to 1.4 million barrels. On the one hand, the weakening economy in China was identified as the cause of the weak demand. On the other hand, strong oil production in the USA may also have contributed to the falling oil prices.
OPEC and IEA with cautious forecasts
However, OPEC was more optimistic for 2025 in its December monthly report. However, the International Energy Agency (IEA) sees it differently, as it expects only a small surplus for 2025 and has slightly lowered its forecast for crude oil demand. For this year, it only expects global demand to increase by an average of 1.05 million barrels (159 liters) per day, as it wrote in its January monthly report.
Wells Fargo optimistic for 2025
The experts around Mason Mendez from the US investment bank Wells Fargo are more optimistic. Last year, raw material prices suffered from high interest rates and economic stressors, especially in the period from January to September, as analysts wrote in a report available to Investing.com. However, the trend would have reversed as early as the fourth quarter of 2024 and so the Wells Fargo experts now assume that the weak demand is likely to improve again in 2025, which in turn could result in higher raw material prices. However, the supply side “should not be forgotten,” it continues. Because if demand recovers faster than raw material producers increase their production growth again, this could become a “particularly acute problem”. Raw material production often lags behind demand “by months, sometimes even years”.
The IEA also predicts stronger growth for 2025 due to generally improved economic prospects in the major industrialized countries, which would also be driven by low oil prices.
Wells Fargo analysts are particularly optimistic about precious metals, including gold, and the energy sector. Experts predict an increase of at least ten percent in both areas in 2025. This would exceed the return Wells Fargo expects at the midpoint of its 250-270 target range for the broader Bloomberg Commodity Total Return Index. Analysts expect a range of 2,700 to 2,800 US dollars per troy ounce for the yellow precious metal in 2025. Gold could benefit from falling interest rates, as it becomes particularly interesting as an investment option when yields on government bonds fall. The experts at Goldman Sachs are even more optimistic: “The precious metal is expected to rise to $3,000 per troy ounce by the end of 2025,” said Lina Thomas, raw materials strategist at Goldman Sachs Research, on the Goldman Sachs website.
When it comes to oil, Wells Fargo experts see the price per barrel for the US WTI variety at 85 to 95 US dollars. The price of the North Sea Brent variety is likely to be between 90 and 100 US dollars per barrel.
Editorial team finanzen.net
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