The starting point for this was the limited production of oil products (in particular, by cartels like OPEC). In our opinion, even in the long term, investments in the extraction of oil products and energy production will remain at an insufficient level. And this is one of the facts that indicates the prospects of investing in raw materials (commodities) in the first half of 2024.

What should an investor in commodities take into account? Let's take a closer look at the situation in the main categories of raw materials.

Oil and oil products

Oil will be an attractive investment asset in the coming months given such trends. As early as the second half of 2023, crude oil prices reached a local minimum (about $63 per barrel). According to our forecasts, this market will continue to have an imbalance between supply and demand this year. The global oil market could face a shortfall of around 600,000 barrels per day. However, there is a high probability that crude oil inventories in the Organization for Economic Co-operation and Development (OECD) countries will continue to remain low in 2024.

As for the price of Brent oil, we expect it to average $90 per barrel this year. However, if the export of Iranian oil falls by approximately 500,000 barrels per day, the price may rise to $100-110 per barrel. In this context, we should not forget the factor of the armed conflict in the Red Sea, due to which ships are forced to change the delivery route to a longer one. It is possible that the expansion of the conflict to the entire region with the participation of other oil producers could lead to the fact that prices will rise even more and probably exceed $120 per barrel.

Therefore, taking into account the existing trends, both oil (American and European), as well as large energy holdings BP, Exxon Mobil, Royal Dutch Shell, which have increased cash flows and can provide investors with a high dividend yield of more than 4%, will remain attractive for investment in the coming months.


Gold has shown positive results in 2023, with gains of 14%, a significant advance given that the commodity market average is down 7%. Gold's performance was particularly impressive given rising real interest rates and a strong US dollar. Historically, these two macroeconomic factors have put pressure on the price of gold.

However, this time gold rose in price due to global institutional demand and demand from global central banks. The latter increased the purchase of precious metals, in particular, due to concerns about the growth rate of global debt and the consequences of the simultaneous increase in interest rates.

The yield on 10-year Treasury bonds increased from 3.9% to 4.5%, as inflation dropped from 6.5% to 3.7%, which effectively means an increase in real interest rates from -2.6% to +0.8%. For example, China's central bank is actively buying up physical gold, which has driven up local prices relative to the global market. To some extent, this echoes the dynamics of demand for gold from the central banks of the South Asian region.

Since central bank interest rate cuts are generally favorable for gold, strategically we see price growth potential for both the physical metal and individual mining companies such as Newmont, Barrick Gold, Agnico Eagle Mines, etc.

Copper and industrial metals

Due to the slower growth rates of the world economy, copper and industrial metals showed a decline last year. China's increased investments in the energy system and the production of cars (including electric cars) helped to support these assets. However, PRC can reduce costs for environmental projects. At the same time, the number of mines will gradually decrease. As a result, the supply of copper in the market will decrease and it is likely that by 2025 copper will show its first annual deficit.

The fact that only one of the ten largest copper producers increased their production forecast last year is also indicative. Such a decline is caused by the problems of operational processes of mining enterprises, the growth of production costs and the deterioration of ore quality. Essentially, the lower copper content of the ore means that more material needs to be processed to produce one ton of copper, which is an additional cost.

However, there is a positive here: higher costs mean that the lower limit of copper prices has shifted upwards. If we take the top level of production costs as a basis, it will be difficult for copper prices to fall below $5,500 per ton. For comparison, the lowest price during the COVID-19 pandemic was $4,371 per ton. From a project point of view, something else is also important: according to surveys of the mining business, approximately 20% of all global projects (mines) that are currently being developed will not pay off. Thus, we assess the outlook for industrial metals, and copper in particular, as positive for most of 2024.

And in conclusion: what share of your investment portfolio should be allocated to the commodity group? In the first and second quarter of 2024, we recommend from 10% to 20% with the prospect of growth, especially in case of correction of stock indices.