Geopolitical risks and freight pressures are weighing on commodity markets, highlight analysts at RBC Capital Markets, with early compliance to incoming US sanctions on Russian oil producers already disrupting operations in Iraq.
Analysts at the Canadian bank reckon companies are “complying in advance” of a 21 November start date for US sanctions, with Lukoil facing funding blocks and cargo allocation withdrawals at the West Qurna-2 field. RBC warned that a forced withdrawal could halt output.
In oil markets, elevated freight rates continue to pressure physical differentials, RBC noted. Analysts point to dated Brent barrels falling to an 18-month low, with the Brent-Dubai EFS spread slipping to around $0.25 per barrel.
RBC said some participants still expect firmer conditions in December if freight begins to ease.
Natural gas has meanwhile risen above $4.50 per MMBtu since late October, but RBC says it expects near-term consolidation as heating degree days trend below normal. Gas storage remains ample, the bank noted, whilst pointing to an estimated 3.95 trillion cubic feet of gas being held. The broker does, however, see potential for stronger prices in 2026.
Elsewhere in commodity markets, Gold was seen by RBC as regaining ground towards $4,200 per ounce.
RBC said risks “skew both ways” into year-end but maintains its view that the yellow metal price could reach $4,500 to $5,000 per ounce next year.
Source: Proactiveinvestors
