Energy Scarcity Powers Commodity Index Towards Record High

The BCOM Total Return Index is heading towards a record weekly closing high due to energy scarcity and supply constraints. Energy tightness has driven crude oil prices up around 8% with Brent reaching a six-week high above $95 per barrel. Refined products have delivered even more spectacular returns, with European gasoil futures rising 123% in price terms.

The recent US strikes on Iran have increased concerns about further disruptions to Middle Eastern supply. While oil continues to flow through the Strait of Hormuz, volumes remain constrained and the threat of renewed disruption hangs over a waterway that handles around one-fifth of global petroleum liquids consumption.

Gold has rebounded as rate-hike fears ease, with a 2.9% jump on Thursday to above $4,500 an ounce. Federal Reserve Governor Christopher Waller's comments have reduced the probability of a September hike from around 65% to roughly 50%, triggering lower Treasury yields and a weaker dollar.

Industrial metals remain resilient due to supply constraints, particularly across copper and zinc. Tight availability and disruptions have offset concerns about demand and higher funding costs. Supply has struggled to respond quickly enough to the rapid expansion of power-intensive infrastructure.