Uncertainty – The Name Of The Game

The looming risk of an economic downturn, geopolitical risk and inconsistent government policy are feeding commodity markets with volatility, additional to the market specific uncertainty-generating factors. Amidst heightened event-based uncertainty and a possible general economic deterioration, investors will pay more attention and react to events, increasing overall uncertainty levels, which in turn will further fuel commodity price volatility. Commodity producers will be disincentivized from making future supply investments against heightened price volatility and policy uncertainty.