Commodities for Tuesday, Dec. 23, 2025

Key Concepts

• Commodity Market Volatility (2025): Significant price fluctuations across various commodities, including record highs in metals, oil sell-offs, and shifts in natural gas and agricultural markets.
• OPEC+ Production Cuts: The impact of OPEC+ decisions on oil supply and prices, including the unwinding of production cuts and the resulting market dynamics.
• Canada’s LNG Expansion: The emergence of Canada as a global LNG exporter, with new terminal projects and access to Asian markets.
• Copper & Silver Demand: The surge in demand for copper and silver driven by AI infrastructure, green technologies, and supply constraints.
• Gold as a Safe Haven: The role of gold as a safe haven asset amidst geopolitical uncertainty and concerns about currency devaluation.
• Agricultural Trade Disruptions: The impact of trade tensions (US-China) and geopolitical events (Ukraine war) on agricultural commodity markets.
• M&A Activity in Mining: Increased merger and acquisition activity in the mining sector, particularly in gold and copper.
• US Shale Production & Oil Outlook: The limitations of US shale production growth and its implications for the future oil supply and price.
• Canada’s Energy & Resource Potential: The potential for Canada to become a global energy and resource superpower, contingent on policy reforms and infrastructure development.

Commodity Market Review: 2025 & Outlook for 2026

The year 2025 was characterized by significant volatility across commodity markets, marked by record highs in metals, a substantial decline in oil prices, a resurgence in Canada’s LNG prospects, and mounting trade pressures on agriculture. This review examines the key events and trends of the year, alongside expert analysis on the outlook for 2026.

Oil Market Dynamics

Oil prices experienced a challenging year, despite geopolitical risks in Ukraine and Gaza providing some support. OPEC’s decision to unwind production cuts to maintain market share contributed to increased supply, and a rise in oil-at-sea volumes was observed. However, the market remained sensitive to global economic conditions and supply dynamics.

Natural Gas – Canada’s LNG Entry

Globally, the natural gas sector experienced a slowdown in 2025, but Canada made a significant entry into the global LNG market after years of delays. The approval and progress on a second LNG terminal open the door to Asian markets, potentially narrowing the discount on Canadian gas exports to approximately $1.10 USD. Eric Nuttall of Nine Point Partners highlighted the increasing demand for natural gas, particularly in power generation, and its evolving role from a “transition fuel” to a “foundational fuel.”

Metals – Copper, Silver & Gold Surge

Metals experienced a particularly strong performance. Copper prices reached record highs due to tight supply resulting from issues at mines worldwide and surging demand driven by AI infrastructure development and the need for electrical equipment. Anglo American’s takeover of Teck Resources created one of the world’s largest copper producers. Silver prices more than doubled, reaching $70 an ounce, fueled by supply deficits and consistent demand from green technologies. Gold also hit record highs, driven by its role as a safe haven asset amid political instability and concerns about potential currency devaluation, with central banks increasing their gold holdings. Pierre Lassonde, Chair Emeritus at Franco-Nevada, noted that current gold market dynamics resemble the late 1970s, characterized by high inflation and stagflation. He predicts further price increases in 2026, potentially exceeding $4,200 per ounce, if central bank demand continues.

Agricultural Trade & Uncertainty

The agricultural sector faced challenges, particularly for US farmers due to China’s initial restrictions on American soybeans. A subsequent trade truce with President Trump led to increased soybean purchases. The potential end of the Ukraine war could increase global grain supply, although Russian agricultural exports remain largely unsanctioned. Canadian farmers face uncertainty due to a COSMO review scheduled for 2026.

Market Performance – Winners & Losers

TSX Energy Index: Uranium stocks performed exceptionally well, with Cameco up 70%. Oil and gas stocks, such as Vermilion and Paramount Resources, were among the losers.

Materials Sector: Precious metals stocks soared, with Discovery Silver up over tenfold and Harris Mining up over fourfold. Methanex struggled, and lumber faced headwinds due to US tariffs, impacting West Fraser Timber.

TSX 60: Kinross trebled in value, while First Quantum rebounded on hopes of reopening its Panamanian mine. Pembina Pipeline underperformed, and Tourmaline was affected by weak gas prices.

Expert Analysis & Perspectives

Pierre Lassonde (Franco-Nevada): Lassonde emphasized the parallels between the current gold market and the late 1970s, citing high inflation, stagflation, and concerns about the US dollar’s stability as key drivers. He believes the weaponization of the US dollar is prompting central banks to diversify into gold, potentially driving prices significantly higher. He also anticipates a surge in M&A activity in the gold space, with producers leveraging strong cash flows for acquisitions, but cautioned against overpaying for assets. He expressed skepticism about the long-term presence of corporate headquarters in Canada following acquisitions, citing past instances where promised investments did not materialize.

Eric Nuttall (Nine Point Partners): Nuttall highlighted the temporary oversupply in the oil market due to OPEC’s production increases, but predicted a more favorable outlook for 2026. He emphasized the growing demand for oil, the limitations of US shale production, and the potential for a structural mismatch between supply and demand. He also pointed to the positive impact of Canadian LNG exports on narrowing the discount for Canadian gas. He noted the importance of Canadian energy stocks and the potential for US investment in the sector.

Heather Exner Piro (MacDonald-Laurier Institute): Exner Piro discussed six key steps for Canada to become an energy and resource superpower, including pipeline reform, nuclear energy development, Indigenous consent, critical minerals production, and addressing labour disruptions. She noted progress on pipeline projects and the passage of legislation to expedite project approvals, but emphasized the need to address labour disruptions at ports and railways to ensure reliable export capacity.

Key Takeaways & Synthesis

The year 2025 underscored the inherent volatility of commodity markets and the complex interplay of geopolitical factors, economic conditions, and supply-demand dynamics. While oil faced headwinds, metals, particularly copper, silver, and gold, experienced significant gains. Canada is poised to become a more prominent player in the global LNG market, but faces challenges related to infrastructure development and labour relations. The outlook for 2026 is cautiously optimistic, with experts predicting continued strength in gold prices, a potential rebound in oil prices, and further growth in the Canadian energy sector, contingent on policy reforms and infrastructure investments. The need for diversification, strategic acquisitions, and a focus on long-term sustainability were recurring themes throughout the analysis.