World Bank Predicts Significant Drop in Global Commodity Prices by 2026
The World Bank has recently published its "Commodity Markets Outlook 2024" report, which anticipates a notable decline in global commodity prices by 2026. The report forecasts a significant drop in oil prices, expected to reach their lowest level in five years by next year.
This prediction is primarily based on a substantial oil surplus, which could limit the impact of price fluctuations, even in the event of an extended conflict in the Middle East.
In 2025, the global oil supply is expected to exceed demand by an average of 1.2 million barrels per day, a surplus that has only been surpassed twice before, during the pandemic-related shutdowns in 2020 and the price collapse in 1998.
This surplus is partly explained by a major shift in China, where demand for crude oil has been stagnant since 2023, due to industrial slowdown and declining sales of electric and liquefied natural gas-powered vehicles.
The study also indicates that several non-OPEC and OPEC+ countries are expected to increase their production, while OPEC+ maintains a significant excess capacity of 7 million barrels per day, nearly double what was observed before the pandemic in 2019.
