The global commodity market encompasses many basic products, including energy resources such as oil and natural gas, precious metals like gold, and important agricultural products such as wheat and coffee.

Oil

Renowned as the "blood of industry", oil plays a pivotal role in modern society. It is omnipresent, powering cars in the form of gasoline and diesel, and serving as a key component in the production of various plastic and numerous other industrial goods. Oil is not only a core component of the global energy supply but also a crucial pillar for the economic development of many countries.

Global oil reserves are unevenly distributed. The Middle East has the richest reserves. Saudi Arabia, a major oil-producing country, ranks second in global reserves. Venezuela in Central and South America has the world's largest reserves. The main oil-producing countries in North America are Canada and the United States, while the Eurasian continent, Africa, and the Asia-Pacific region have relatively fewer reserves. This uneven distribution impacts the international situation. The Middle East has become a global focus due to its oil, resulting in complex geopolitics. The Organization of the Petroleum Exporting Countries (OPEC) wields significant influence in the international oil market. Member states coordinate production policies, affecting global oil prices and the supply pattern. Many countries conduct energy diplomacy to ensure energy security, influencing the direction of international relations.

Factors Affecting Oil Prices

The supply-demand relationship is the direct factor. When the global economy grows robustly, the demand for oil increases, driving up oil prices. During an economic recession, demand decreases and oil prices decline. Production adjustments by major oil-producing countries also impact oil prices. For example, OPEC's production cuts or increases will cause oil prices to rise or fall accordingly.

Geopolitical situations are key factors. Regional conflicts and such can disrupt oil production and transportation, triggering oil price fluctuations. For instance, the Russia - Ukraine conflict in 2022 led to a significant surge in international oil prices.

In addition, the macroeconomic environment, oil inventory levels, the US dollar exchange rate, and the development of new energy technologies also affect oil prices. High inflation, adjustments in interest rate policies, changes in the US dollar exchange rate, and increases or decreases in oil inventories all have an impact on oil prices. In the long run, the development of new energy technologies will put pressure on oil prices.

The 1973 oil crisis marked a significant turning point in the global energy landscape. It revealed the vulnerabilities associated with heavy reliance on oil as a primary energy source. The crisis led to skyrocketing oil prices, with costs nearly quadrupling from 1973 to 1974, which severely impacted economies worldwide, particularly in the United States.

 This event catalyzed nations to diversify their energy portfolios, investing heavily in alternative sources such as solar and wind power, thus fostering the development of green energy technologies.

This event prompted countries to diversify their energy portfolios and invest heavily in alternative energy sources such as solar and wind energy, thus promoting the development of green energy technologies.

Natural Gas

Against the backdrop of global energy transition, natural gas, as a relatively clean fossil fuel, is becoming increasingly important. Compared with coal and oil, it generates fewer pollutants when burned, making it a crucial option for energy decarbonization and addressing climate change.

In the power generation sector, natural - gas-fired power generation is highly efficient, flexible, and clean. It has a high-efficiency rate and can quickly respond to changes in electricity demand, ensuring a stable power supply. Moreover, its pollutant emissions are far lower than those of coal-fired power generation.

Factors Affecting Natural Gas Prices

Seasonal Demand Fluctuations: In winter, the heating demand of residents in northern regions surges, driving up natural gas prices. For example, during extremely cold winters, when Russia increases its exports to Europe, the natural gas prices in Europe tend to fluctuate.

Changes in the Supply Pattern: The global distribution of natural gas resources is uneven, and concentrated in countries like Russia. Its production levels, export policies, and the condition of transportation pipelines all impact international supply. For instance, the Russia - Ukraine conflict strained the natural gas supply between Europe and Russia. As a result, Europe turned to importing LNG, which altered the global LNG market supply-demand relationship and influenced natural gas prices.

Storage Facility Capacity and Inventory Levels: The capacity of natural gas storage facilities and inventory levels also affect prices. When inventories are low, prices usually rise.

Gold

Precious metals, especially gold, play a pivotal role in the global economy and are influenced by diverse investment strategies and consumption habits. Gold is an indispensable part of investors' asset allocation. Its value is relatively stable, and it has a low correlation with other asset classes such as stocks and bonds. This makes gold an effective risk - diversification tool. When the financial market experiences significant volatility, gold often serves as a safe - haven, providing some protection for investors' assets. During the 2008 global financial crisis, the stock market plummeted, severely hitting many investors' assets. However, the price of gold rose contrary to the trend, reducing losses for gold-holding investors.

Over the past decade, the price of gold has increased by more than two - and - a - half times, although this growth doesn't always follow traditional market patterns. Central banks around the world are increasingly buying gold to diversify their cash reserves, while retail investors seek exposure to gold through various investment vehicles.

Factors Affecting Gold Prices

The global economic situation is one of the key influencing factors. When the economy is experiencing robust growth, investors tend to allocate to high-risk, high-return assets. In such cases, the demand for gold decreases, and its price may decline. Conversely, when economic growth slows down or faces uncertainties, investors usually seek safe-haven assets. As a traditional haven, gold sees an increase in buying volume, thus driving up its price.

Monetary policy also significantly impacts the price of gold. During periods of loose monetary policy implemented by central banks, the expectation of currency devaluation strengthens. Gold, with its value-preservation feature, becomes more attractive, and its price rises accordingly. When monetary policy tightens, the value of the currency increases, the demand for gold decreases, and the price goes down.

In addition, geopolitical instability is an important factor driving up the price of gold. Events such as wars and political conflicts can trigger market panic. Driven by the need for risk aversion, investors buy gold. For example, during periods of frequent conflicts in the Middle East, the price of gold usually rises significantly.

Wheat

Wheat is one of the most widely - planted food crops in the world, spanning across all continents. In the Northern Hemisphere, vast wheat fields can be found from the Siberian Plain in Russia to the Ganges Plain in India, and from the Great Plains in the mid-western United States to the North China Plain and the middle and lower reaches of the Yangtze River Plain in China. Russia is a major wheat-exporting country, with its main production areas in the Volga River Basin and the West Siberian Plain. In the United States, wheat cultivation is concentrated in mid-western states such as Kansas and North Dakota.

Factors Affecting Wheat Prices

Wheat prices are significantly influenced by supply-side factors, especially fluctuations in crude oil prices, which are associated with increased variability in crop prices. An increase in oil prices affects the cost of production inputs and the biofuel market, thus influencing the prices of agricultural products as a whole.

Climate conditions are also a key factor. Natural disasters like droughts and floods can reduce wheat yields, leading to price hikes. For instance, in 2010, due to disasters in Russia, global wheat prices rose sharply in the short term.

Policy factors also play a role. Government policies regarding agricultural subsidies, imports and exports, and food reserves can impact the supply-demand balance and prices in the wheat market. Changes in global food demand also affect wheat prices. Population growth, rising living standards, changes in dietary structures, and the development of bioenergy have all increased the demand for wheat, intensifying supply-demand tensions and driving prices up.

Coffee

Coffee is produced across tropical and subtropical regions globally, with each origin boasting unique flavors and qualities.

There are three main coffee varieties: Arabica, Robusta, and Liberica. Arabica, known for its delicate taste and rich aroma, is the top-choice raw material for high-quality coffee. It accounts for about 60% of global coffee production and is mainly produced in countries like Colombia and Brazil. Robusta, with a high caffeine content and strong bitterness, is often used in instant and blended coffees. It makes up around 35% of the global output, and Vietnam is its largest producer. Liberia has a small production volume, and a unique flavor, but is difficult to cultivate, thus having a small market share.

Factors Affecting Coffee Prices

Changes in coffee bean production are a direct factor. Coffee plants are highly sensitive to their growing environment; droughts, floods, and pests, among other climate-related factors, can significantly impact yields. In 2019, Brazil suffered severe droughts and frost, leading to a significant drop in coffee bean production and a subsequent price increase in the international coffee market.

Shifts in the consumer market also have a major impact on coffee prices. With the global spread of coffee culture and the improvement of people's living standards, coffee demand has increased, especially in emerging market countries where the coffee-consuming market is growing rapidly. Consumers are increasingly demanding higher-quality coffee in terms of taste and flavor, so high-grade coffee beans command relatively higher prices. Additionally, the competitive landscape of the coffee market, brand marketing, and changes in consumer preferences all influence the market demand and prices of coffee.

In the context of global economic integration, fluctuations in the commodity market are highly contagious and interconnected. Changes in one region or a particular commodity market often trigger a chain reaction across other commodity markets globally. For instance, a disruption in oil supply in the Middle East can drive up international oil prices, subsequently causing fluctuations in the global energy market and affecting the prices of other energy products such as natural gas and coal. The increase in oil prices can also lead to a rise in the prices of chemical products, impacting raw material markets like plastics and rubber. Moreover, the agricultural product market is not immune to energy price fluctuations, as inputs in agricultural production, such as fertilizers and pesticides, are closely related to energy prices.