Commodity Market Trends – OPEC April 2025
Energy Price Volatility Amid Shifting Global Dynamics
In March 2025, commodity markets continued to reflect the volatility and complexity of global economic conditions. Energy prices declined for the second consecutive month, while non-energy commodities—particularly base and precious metals—saw gains. This divergence was driven by weakening industrial demand, geopolitical uncertainty, and frontloading behavior tied to expected U.S. trade tariffs.
Energy Sector Overview
The global energy price index fell 4.1% month-on-month (m-o-m) in March, driven by broad-based declines across major commodities. On a year-over-year (y-o-y) basis, the index dropped 8.8%, largely due to persistent weakness in coal and crude oil prices. These declines were only partially offset by earlier gains in natural gas markets.
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Crude Oil: Prices fell 4.2% m-o-m and 15.4% y-o-y, pressured by soft demand outlooks and concerns over U.S. trade policy. Despite tight supply in some regions, macroeconomic sentiment and geopolitical noise dominated fundamentals.
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Natural Gas (TTF - EU): Prices declined 13.7% m-o-m and 54.7% y-o-y. The easing of geopolitical risk premiums, combined with high EU storage levels (33.8% as of March 31, per Gas Infrastructure Europe), contributed to the decline. Expectations of increased U.S. LNG exports further pressured prices.
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Natural Gas (Henry Hub - U.S.): After three months of increases, prices dropped 2.2% m-o-m due to weaker LNG exports during terminal maintenance. Nevertheless, prices remained over 100% higher y-o-y, supported by strong winter heating demand.
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Thermal Coal: Australian thermal coal prices declined 2.8% m-o-m and 20.9% y-o-y, reflecting lower demand from Asia and increased renewable generation in Europe. High inventories further weighed on the market.
Broader Market Dynamics
Uncertainty around U.S. trade policy significantly elevated price volatility across commodities. Investor behavior reflected this, with a notable rise in short positions and an overall decline in net length. Meanwhile, the weakening U.S. dollar encouraged buyer frontloading in select markets.
While the non-energy commodity index dipped slightly (–2.1% m-o-m), base metals rose 3.0%, highlighting divergent demand trends. Industrial metals gained despite weakening global manufacturing data, pointing to tightening supply conditions and strategic stockpiling.
Precious Metals continued their upward trajectory, with gold reaching a record $3,000/oz, driven by safe-haven demand, central bank buying, and macroeconomic uncertainty.
Outlook
Looking ahead, commodity markets will remain sensitive to global trade policy, macroeconomic signals, and supply-side developments—especially in the energy sector. Stakeholders should monitor LNG flows, inventory trends, and tariff developments closely, as these will play a critical role in shaping pricing and investment decisions over the coming months.