Global Commodities: El Niño faces a dunkelflaute
J.P. Morgan's Global Research desk frames the winter 2026 narrative as a tug-of-war between two competing weather regimes — El Niño and a European dunkelflaute — with the winner determining natural gas direction, while gold and copper take their cue from post-midterm policy and the ongoing rate re-pricing. Per the full note from J.P. Morgan Global Research, recorded November 13, 2026, European Natural Gas strategist Otar Dgebuadze and Greg Shearer, Head of Base and Precious Metals Strategy, unpack how these drivers interact across commodities. The cross-asset read-through is the key takeaway: a cold, windless European spell would tighten gas and likely spill into inflation expectations and metals positioning, whereas a mild El Niño pattern would do the opposite. Our internal coverage carries no tracked FX consensus for this commentary, so we position it as a thematic commodity-weather piece with indirect FX implications. No high-impact calendar events sit in the next 30 days for the relevant jurisdictions, so the weather regime itself is the near-term catalyst.
What the desk is arguing
The thesis is straightforward: the winter gas outcome hinges on which weather pattern dominates — El Niño's moderating influence versus a European dunkelflaute (a prolonged cold, windless spell that spikes heating and power demand while starving renewables). Per the full note from J.P. Morgan Global Research, the desk treats this as a genuine coin-flip rather than a one-sided seasonal call.
The supporting evidence is process-based rather than a single data print: the desk leans on the competing meteorological signals and how they cascade into gas balances, then extends the logic to gold and copper, which it says are reacting to the midterms and the ongoing interest-rate re-pricing. The note explicitly names both Dgebuadze (European Natural Gas) and Shearer (Base and Precious Metals Strategy) as the voices driving the cross-commodity framing.
The alternative read the desk is implicitly rejecting is a simple directional weather bet — that El Niño alone caps gas upside. By elevating the dunkelflaute as a credible counterweight, J.P. Morgan is arguing the tail risk is two-sided, which matters for anyone hedging winter energy exposure.
How other firms see it
The aligned camp is essentially the weather-driven commodity community that treats European gas as the swing factor for winter metals and inflation-linked positioning; the contrary camp would be macro desks leaning purely on rate re-pricing as the dominant driver of gold and copper, sidelining the weather variable. The note does not name rival houses, so we flag this as a framing divergence rather than a target-level disagreement.
Watch the EUR/USD trajectory as the cleanest FX spillover — a dunkelflaute-driven gas spike would hit European growth expectations and weigh on the euro, while a mild El Niño outcome supports the opposite. Also keep USD/JPY and gold in view, since the rate re-pricing the desk cites is the common thread linking metals and the dollar.
Key takeaways
- 01J.P. Morgan Global Research frames winter gas as a contest between El Niño and a European dunkelflaute — explicitly two-sided rather than a one-way seasonal call.
- 02The desk extends the weather logic into gold and copper, which it says are reacting to the midterms and interest-rate re-pricing.
- 03Speakers are Otar Dgebuadze (European Natural Gas) and Greg Shearer (Head of Base and Precious Metals Strategy), recorded November 13, 2026.
- 04No tracked FX consensus exists for this commentary — treat it as a thematic commodity-weather input with indirect EUR and USD implications.
Market implications
Watch European gas curve spreads and the EUR/USD reaction function — a confirmed dunkelflaute forecast would tighten gas, pressure the euro, and likely lift gold on inflation-hedge demand. With no high-impact calendar events in the next 30 days, the weather regime is the dominant near-term signal; position sizing should reflect the genuine two-sidedness J.P. Morgan emphasizes rather than a directional weather bet.
Risks to this view
A mild El Niño pattern that keeps European heating demand subdued would invalidate the dunkelflaute tail risk and reverse any gas-driven euro weakness. Conversely, a faster-than-expected rate re-pricing — independent of weather — could dominate gold and copper and decouple them from the gas narrative entirely, forcing a reassessment of the cross-asset linkage the desk relies on.
Hello, and welcome to another episode of At Any Rate. I'm your host, Greg Scheer, and I head up base and precious metals research at J.P. Morgan.
So far this week, after a large and steep fall over the last few weeks, crude oil has mostly held steady down slightly on the week. We've seen this even though we've gotten kind of mixed headlines on the conflict in Iran, which has been the predominant driver around the geopolitical risk premium coming in and out of oil. At the moment, at just a touch under $100 per barrel, crude is still trading roughly around where our analysts peg fundamental fair value for the moment.
The interesting dynamic, though, I think on energy this week has been on TTF or European natural gas. What we've seen on that front was over the last few weeks since the end of October, a very precipitous fall, something around 20 percent off the end October highs, which was in line and in sympathy with that risk premium eroding and what we saw in crude as well. But that hit a U-turn this week, where we saw as of yesterday on Thursday, we saw an intraday price gain in TTF of nearly 10 percent.
To discuss this, I'm joined by Otar DiGabwadze, who heads up our European natural gas. Otar, thanks for joining me. Maybe let's just jump right in.
What are we seeing in this disconnect this week from a TTF versus crude oil perspective? What's really driving this turnaround in TTF so far? Hi, Greg, and thank you for having me.
So in TTF markets, we've been flogging two key variables influencing the prices over the last few months, and especially as we approach the winter, which has been the supply disruption from the Middle East and the weather outlook and expectations into the winter. Actually, the supply disruptions have materially throughout the last few weeks. And as of the latest data that we have looked at earlier this week, we estimate Qatar and UAE utilization is running around 50 percent compared to almost zero throughout the summer.
And throughout the week, we also observed quite a few crossings, which we are verifying at the moment. However, the rates of the price formation have moved to weather these last few last two weeks or since November, I would say, and we are observing quite a strong weather event in general, known as TTF, which is a worse combination for energy markets, which is cold and low wind environment. Indeed, this is an opposite of what we would have typically have expected with El Nino conditions, which in general should be leading to weather being warm, wet and windy.
However, this is exactly opposite. So we see less of a lack of wind, lack of rainfall and quite cold temperatures. So in November month to date, we are observing wheat generation down about 35 percent year over year.
Sources & References
How we cover this story