Energy and oil: higher near term, then some relief
The latest report leans bullish on commodities, with conflict and weather doing most of the pushing. After three consecutive years of declines, the bank now expects energy prices to rise 32% in 2026, then give back some of those gains in 2027.
For crude, the forecast is $91 a barrel on average this year. On supply, the bank sees a 5.2% drop this year, the steepest fall in more than 40 years if you set aside 2020. Demand is weakening too.
This year, global oil consumption is expected to fall by 2.5% - the third-largest drop ever recorded - and only a modest rebound is anticipated in the following year. One factor behind only a slight pickup in consumption next year is the accelerating take-up of electric vehicles, particularly in China. The bank also warned that import-dependent economies face increasing strain in natural gas prices.
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"Commodity markets are being hit by several major shocks at once," said Ayhan Kose, who serves as the bank's deputy chief economist. "Higher energy costs and trade disruptions are driving up prices across a broad range of commodities, threatening to worsen inflation, food insecurity, and economic growth."
Food and metals: weather risk meets tight supply
El Niño looms over agriculture. Growers are bracing for isolated bouts of flooding, drought, and heat stress in several areas, and the bank projects a cumulative 18% increase in food prices over this year and next.
Metals are firming in the outlook too. Prices are on track to climb 25% in 2026 as aluminum, copper, and tin are projected to hit record highs, reflecting tight supply and sturdy demand. Ongoing outlays for power networks, electric-vehicle production, clean energy, electronics, and data centers are sustaining strong interest in these metals.
Why it matters for your portfolio
In plain English: pricier energy, food, and metals tend to flow into costs across the economy and can complicate central banks' inflation fight. That mix can pressure margins for heavy energy users, bolster revenues for commodity producers, and stir rate and currency volatility. The bottom line: exposures tied to tight supply and cost sensitivity may move more than usual.
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