Where are oil markets going, and how will metals fare in 2026?

Reid I'Anson, economist at Kpler, joins BNN Bloomberg to discuss the 2026 outlook for commodities.

It’s been a volatile commodity market this year between trade disputes and global conflicts.

While industrial and precious metals like gold and copper soared, an oversupply of oil pushed prices down.

And if there is one commodity making waves heading into the new year, it is oil, which risks a price drop, Reid I’Anson, an economist at Kpler, told BNN Bloomberg.

“The big story is, where are the oil markets going?” said I’Anson.

Too much oil

Supply is expected to exceed demand by a surplus of 3.84 million barrels in 2026, according to the International Energy Agency (IEA).

The surplus represents nearly four per cent of the world’s demand and is attributed to increased production from OPEC+, the U.S. and other producers. In response, OPEC+ has paused output increases for the first quarter of 2026.

“The big question moving forward is, do we see more downward price movement into next year given the oversupply situation, or do we see the Chinese continuing to try and push builds into their Strategic Petroleum Reserve (SPR), which provides a bit of additional demand to the market?” said I’Anson.

U.S. trying to keep oil prices down: I’Anson

Policy shifts are also influencing the oil outlook said I’Anson.

He said U.S. President Donald Trump’s administration is actively trying to push oil prices down to counteract the inflationary affects of its other key policies, mainly tariffs and immigration restrictions.

“Trying to keep that oil price somewhat depressed is helpful for his administration,” said I’Anson.

In Canada, the federal government is pushing to grow the energy industry.

“It’s been really interesting to watch the shift in Canada,” said I’Anson.

The Building Canada Act was introduced by the federal government in the summer, with a goal to fast track projects of national interest in energy, defence and infrastructure.

The $34 billion Trans Mountain Pipeline Expansion was completed last year, tripling the pipeline’s capacity.

Copper demand will continue to grow

Beyond oil, copper remains one of the key commodities to watch heading into 2026, said I’Anson.

The need for copper is growing as the world’s energy needs grow with the use of AI data centres, and general electrification.

“Of course, that’s compounded by issues on the supply side as well,” said I’Anson.

“I think the bullish scenario is absolutely on the table through the end of the decade.”

I’Anson said tariffs have also affected the copper markets.

“It has been interesting to watch how the Trump administration has used the threat of tariffs to try and build us copper inventories,” said I’Anson.

“I think that you could see attempts to do that some more next year.”

Natural gas and LNG projects

Natural gas is very much a bullish play said I’Anson.

“I mean, again, this is very much on the AI build out story, not only in the U.S, but globally,” said I’Anson.

He added that additional liquefied natural gas supply is also a bullish market for next year when there will be more LNG projects on the way.

The Canadian government is prioritizing LNG Canada Phase 2 and the Indigenous-led Ksi Lisims LNG project as key clean energy exports.

Uranium volatility and long timelines

I’Anson warns about the volatility of uranium, despite the world’s growing interest in nuclear power.

“It’s hard to trade uranium. It’s not a very liquid market,” said I’Anson.

Uranium demand is tied into long-term reactor fleets, and a nuclear plant can only run on uranium.

“You have to have a five plus year time horizon, because the time that this takes to even just get government policy makers on board is going to take a while here,” said I’Anson.

China remains central to commodities demand

China’s economic strategy continues to play a major role in global commodity markets.

“This year, they have gone right back to the same playbook that they’ve relied upon, which is this investment led growth model,” said I’Anson.

China has achieved global dominance in key clean energy sectors, particularly electric vehicles (EVs), solar panels, and wind turbines.

It also dominates critical mineral supply chains that support these industries, such as the processing of rare earths and lithium-ion batteries.

“I think they’ll probably double down again next year,” said I’Anson.