Jeremy Weir, head of leading global metal trader Trafigura, warned that commodity prices could go “parabolic” in the next months.
“We have got a critical situation,” Weir told the FT Global Boardroom conference on June 7. “I really think we have a problem for the next six months ... once it gets to these parabolic states, markets can move and they can spike quite a lot.”
Trafigura is the #1 world trader in metals and # 2 in oil. The FT explains: “A parabolic move in markets is generally defined as when a price that has been rising suddenly surges to hitherto unseen levels, mimicking the right side of a parabolic curve.” Weir said that oil prices were highly likely to hit $150 a barrel or more in coming months indicating, as a cause of the increase, strains on supply chains as Russia “diverts oil exports away” from Europe. In other words, the result of sanctions.
“If we see very high energy prices for a period of time, we will eventually see demand destruction,” Weir said. “It will be problematic to sustain these levels and continue global growth.” (https://www.ft.com/content/a6e7fdb3-be01-4473-9eee-2e496a3dda82)
