Oil Above $100, Gold Regains Shine as Markets Brace for Energy Shock

Global financial and commodity markets are entering a new phase of heightened uncertainty as crude oil remains above $100 a barrel, LNG prices surge towards winter, gold rebounds strongly and equity markets struggle to digest renewed inflation and interest-rate risks.

The latest market moves suggest that the energy shock is no longer confined to oil. Gas, refined fuels and precious metals are all being reshaped by geopolitical tensions, while stocks are being forced to price in the prospect of higher-for-longer interest rates.

For Bangladesh, an energy-importing economy already grappling with high production costs and fragile investor confidence, the developments carry particularly heavy implications.

Brent crude was trading at about $104.57 a barrel on Thursday, while US West Texas Intermediate stood at around $101.50. Both benchmarks eased as concerns over immediate supply disruptions moderated following reports that Saudi Arabia could arrange additional crude cargoes through Oman.

But the retreat has done little to remove the underlying threat. S&P Global says Brent has returned above $100, while its latest base case puts dated Brent at $89 a barrel at end-2026 and $86 at end-2027. The consultancy warns, however, that the latest energy-price increases have already exceeded assumptions in its forecasts.

A Reuters poll of 31 economists and analysts in August put the average 2026 Brent forecast at $85.08 a barrel, substantially below current spot prices, underscoring how dramatically the market has shifted since earlier forecasts were made.

TD Securities is more cautious. Its commodity strategists say persistent supply risks are keeping the oil outlook bullish and expect the market to remain abnormal until at least December. The firm also warns that another sharp oil-price spike could reignite inflation and expectations of further interest-rate increases.

The gas market presents an even more immediate winter threat.

Asian spot LNG prices have climbed to almost $30 per million British thermal units, nearly three times their pre-war level. Europe is entering the winter season with storage facilities only about 67% full, well below its 80% target for December. The disruption has also removed an estimated 36 million tonnes of LNG supply from Qatar and the UAE because of restrictions around the Strait of Hormuz.

Market Watchdog Wood Mackenzie's Simon Flowers warns that a colder-than-normal winter could push Asian LNG prices towards $40/MMBtu. He says such prices could trigger demand destruction, but the warning nevertheless highlights the extraordinary pressure facing energy consumers.

For Bangladesh, this is more than a global commodity story. Gas shortages have already disrupted industrial production, while the country's energy-intensive manufacturers remain vulnerable to imported fuel costs. Bangladesh Petroleum Corporation Chairman Rafiqul Islam has said the country does not expect a fuel-supply crisis before December, although procurement remains a major challenge.

Gold, meanwhile, is staging a powerful counter-move.
Spot gold rose around 1.2% to $4,314 an ounce on Thursday after touching a near six-week low the previous day. The rebound came despite the Federal Reserve's latest rate increase and warning that further tightening may be necessary.

OANDA senior market analyst Kelvin Wong says a continued decline in oil prices could support gold in the medium term, although he expects bullion to remain rangebound until that happens. Independent analyst Ross Norman attributed the latest rise partly to investors unwinding positions built around expectations of the Fed rate decision.

The longer-term gold outlook remains elevated. The London Bullion Market Association's 2026 survey records average forecasts of $4,586 from HSBC and $4,820 from Bloomberg Intelligence, while Bloomberg Intelligence sees the possibility of gold moving above $5,000 later in the year. Goldman Sachs has separately projected $4,900 by December 2026.

Equity markets are caught between these competing forces. The Fed's renewed tightening has increased pressure on risk assets, while expensive energy threatens corporate margins and consumer spending. Reuters reported that investors were already reassessing stock positions following the Fed decision, with rate-sensitive assets facing renewed uncertainty.

Dhaka's stock market has nevertheless mounted a tentative recovery. The benchmark index of the Dhaka Stock Exchange (DSE) extended its recovery for the third consecutive session last week ending Thursday driven by broad-based buying interest as investors remained active despite concerns over geopolitical tensions in the Gulf region.

The improving gas supply situation in industrial areas also provided some relief to investor sentiment, supporting the upward momentum in the market. The DSEX, the broad index of the DSE, gained 38.1 points to settle at 5,532, compared with 5,494 points in the previous trading session.

Market momentum remained positive throughout most of the session despite mild selling pressure during the first hour. Sustained buying across a wide range of sectors subsequently strengthened the recovery trend. Yet cautious selling returned towards the close, reflecting continuing doubts about the durability of the rebound.

The market's immediate challenge is therefore not simply the direction of the index but whether corporate earnings can withstand energy costs, high borrowing rates and weak consumer-demand. However, there is a more optimistic medium-term scenario. Capital Alliance Bangladesh has projected that the DSEX could reach 10,000 by end-2027, citing stronger corporate earnings, improving macroeconomic stability, monetary easing and a possible market re-rating. 

That is an external forecast, not a certainty, and its assumptions will be tested by the continuing energy and financial-market shocks. Other commodities are sending mixed signals. Copper recently touched a record $14,779 a tonne, with analysts saying it could test $15,000, although profit-taking risks remain. Morgan Stanley's fourth-quarter forecast is $14,250, while the bank remains positive on copper for the remainder of 2026 but more cautious about 2027.

The message from the commodity complex is unmistakable: energy remains the principal source of inflationary risk, gold remains the preferred hedge against uncertainty, industrial metals are caught between supply constraints and growth concerns, and equities are struggling to price an increasingly unpredictable interest-rate environment.

For Bangladesh, the next few months could prove decisive. A sustained easing in oil and LNG prices would provide relief to inflation, industry and the balance of payments. A renewed energy-price surge, by contrast, could squeeze manufacturers, raise production costs and place fresh pressure on the stock market.

The global market is therefore balancing on three variables �" war, energy and interest rates. Until those forces begin moving in the same direction, volatility is likely to remain the defining feature of both commodity and equity markets.