2020 will be remembered not just for the pandemic, but also as the year oil prices went negative. As families left urban areas to relocate during the pandemic, demand for lumber drove up prices. With the global economy gradually reopening in 2021, oil demand rose and prompted a rally in prices to multi-year highs.
With OPEC increasing production only slowly, energy marketstightened massively, as global inventories drained and boosted prices further.
Still, spikes in oil prices were moderate in comparison to those elsewhere across the energy complex. A barrel of Brent crude cost nearly $87 at its peak this year, its highest in three years. But its gains of around 45% so far this year pale in comparison to those of other energy sources.
In contrast, natural gas and coal rose far more rapidly than anyone expected when rising demand for power generation from countries including China and India met as shortfall in available supply head-on.
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At the start of 2021, Asia's buoyant gas demand in particular led to a huge shortage of liquefied natural gas, partly because of production outages. This marked a huge turnaround from a year earlier, when the LNG market was buckling under excess supply.
Then as the year progressed, the tightening then shifted over towards the European market. This was exacerbated by political tensions with Russia, which is Europe's most important gas supplier.
European natural gas prices are currently on track to regain their early-October record highs, seven times higher than they were when the year began. This had a knock-on effect on the coal market, as power generators switched away from pricier natural gas.
Precious metals were undoubtedly the underperformers this year, partly due to market participants opting for assets that perform well in an environment of rising interest rates and that bear yield.
These were the top 10 best-performing commodities of 2021 year-to-date, according to data from Trading Economics:
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