Record heat in 2024 to roil commodity markets and spike prices

Summer 2024 set to roil commodity markets amid record heat

As 2024 gears up to be the hottest year on record, traders brace for a volatile summer in the commodities market. Rising global temperatures are driving up prices for natural gas, power, and staple crops, while droughts and wildfires threaten to further disrupt supply chains and shipping routes.

Summer 2024 set to roil commodity markets amid record heat

Traders are bracing for a tumultuous summer as global temperatures soar, potentially making 2024 the hottest year on record. This extreme heat is driving up prices for crucial commodities like natural gas, power, wheat, and soy. Shipping routes, already disrupted, face further chaos due to droughts, and the risk of wildfires is increasing.

The relentless impact of climate change is exacerbating inflation, raising costs for energy, food, and fuel. In 2023, extreme weather caused global losses of $250 billion. Predictions indicate a 50% rise in US natural gas prices, with wheat and coffee markets also expected to surge.

2024’s first four months were the warmest in 175 years. The National Centers for Environmental Information reports a 61% chance of this year surpassing 2023 as the hottest. Record ocean temperatures are likely to fuel severe tropical cyclones, and the upcoming La Niña event could intensify hurricanes in the Atlantic and cause dry conditions in the US West and South.


Learn how to trade oil and gas with Top Forex brokers 


The most significant risk to the global economy and oil markets this summer is the hurricane season in the Gulf of Mexico, overshadowing geopolitical concerns.

Commodity outlook:

  • Gas prices: US natural gas futures might reach $4 per million BTUs due to increased air-conditioning demand. Europe and Asia face a potential 50%-60% price hike due to a “perfect storm” of heat, hurricanes, and droughts.
  • Power markets: Texas is experiencing surging electricity prices, with potential blackouts. Europe might face power shortages if French nuclear plants shut down due to high river temperatures.
  • Inflation: High commodity prices are likely to keep inflation elevated, complicating the Federal Reserve’s efforts and impacting the US presidential election.
  • Agriculture: Wheat, coffee, and other crops face supply shocks from extreme weather, with significant price increases expected.
  • Oil and shipping: Intense heat threatens oil production, refining, and shipping operations. An active hurricane season poses additional risks.

In summary, the coming summer is expected to bring significant volatility to global commodity markets due to record-breaking heat and extreme weather events.


Subscribe for our newsletter

Get Forex brokers reviews, market insights, expert analytics and education material right into your inbox for free!

You can unsubscribe any time by clicking the link in our letters.