Highlights

  • Crude oil falls over 3% as IEA warns of 2026 supply surplus.
  • Gold and silver tumble on profit booking after strong U.S. jobs report.
  • Robust U.S. labor market dampens expectations of near-term Fed rate cuts.

Crude oil, gold, and silver all tumbled on Thursday as investors grappled with a perfect storm of oversupply concerns, geopolitical instability, and unexpectedly strong U.S. economic data. WTI Crude Oil for March delivery fell $1.97, or 3.05%, to $62.66 per barrel, after the International Energy Agency (IEA) projected that global oil supply will exceed demand by 3.73 million barrels per day in 2026. This forecast, nearly identical to its previous outlook, signaled that markets may face a persistent supply glut, prompting traders to sell.

The IEA also trimmed its global oil demand growth estimate to 850,000 barrels per day, down 80,000 bpd from earlier projections, citing extreme cold in North America, delayed output from Kazakhstan, and rising geopolitical tensions. Yesterday, OPEC+ had similarly revised second-quarter 2026 crude demand to 42.20 million bpd, down from 42.60 million bpd in the first quarter, while production hikes for Q1 remain paused. Saudi Arabia plans to boost crude exports to China to a multi-year high in March, following price cuts by Aramco aimed at stimulating demand.

Precious metals were not spared, as profit booking dominated trading after yesterday’s gold and silver rally. Front-month Comex Gold for February delivery dropped $147.90, or 2.92%, to $4,923.70 per troy ounce, while Silver plummeted $8.21, or 9.80%, to $75.55 per troy ounce. Investors weighed yesterday’s unexpectedly strong U.S. nonfarm payrolls report, which revealed that 130,000 jobs were added in January, surpassing the 70,000 jobs economists had anticipated. The unemployment rate ticked down to 4.3% from 4.4% in December, while private payrolls rose by 172,000, underscoring the labor market’s resilience.

Recent U.S. jobless claims data offered further support to the robust labor story, with initial claims falling 5,000 to 227,000 for the week ending February 7. Continuing claims increased slightly to 1,862,000. Analysts suggest that these data points make a near-term Federal Reserve interest rate cut less likely, with markets now expecting policy easing only after Chair Jerome Powell’s successor takes office.

Geopolitical risks added another layer of uncertainty. U.S.-Iran talks over the nuclear program in Muscat ended inconclusively last weekend, with threats of additional military deployments to the Persian Gulf and potential tanker seizures contributing to market unease. Meanwhile, the Russia-Ukraine war continues, with peace talks stalled over territorial disputes, keeping energy and commodities markets on edge.

Investors are now turning their attention to Friday’s U.S. Consumer Price Index (CPI) release, which could provide critical clues on the Fed’s next moves. Between supply concerns, geopolitical flashpoints, and a resilient U.S. economy, commodities markets are navigating a volatile landscape that could set the tone for the first half of 2026.