FXStreet (Córdoba) - Commodity prices look set to tread water next week. While the current oversupply on the oil market argues against a price recovery, next year’s prospective lower supply does not argue for a further slump in prices either, said Barbara Lambrecht analyst at Commerzbank. She added that base metals are unlikely to benefit from the fact that there is no major gap between supply and demand on most markets at present. The gold market appears to have priced in the first Fed rate hike after almost ten years. Key Quotes “OPEC’s inability to find a consensus has temporarily sent the price of Brent below USD 40 per barrel. With no cuts in OPEC supply, the market will remain oversupplied for now. This argues against a near-term price recovery, implying that energy sources will probably end the year with the largest price losses of all commodities. However, another major slump in prices also appears unlikely with a significant drop in US oil production on the cards in 2016. Instead, we believe oil prices will recover once lower supply is evident from hard data next year. “ “At -25% . year-to-date, base metal prices have so far performed only slightly better than energy commodities. But massive excess supply only exists in the case of aluminium. The price declines are primarily the result of concern over weaker metal demand in China, the largest importing country by far. So far, Chinese demand has proven fairly robust, which should be confirmed by new market balance data from the International Study Groups and the World Bureau of Metal Statistics, and should thus support prices. With the low level of prices forcing many producers to cut their output, supply looks set to tighten markedly next year and thus also drive a price recovery. Compared to cyclical commodities, precious metals are still fairly well off at year-end.” “But the gold price, too, has lost just under 10% since the start of the year and is trading close to its six year low. It was above all the strong dollar that proved a burden in the current year. Moreover, most speculative investors have switched to the bear camp . However, even with next week’s likely US lift-off, the dollar should increase in 2016 at a much lower pace than this year, implying that a major drag on the gold price will become less relevant. Consequently, we expect Chinese and Indian demand to be sufficient to boost the gold price in 2016.” For more information, read our latest forex news.