Experts predict record oil price drop: details
29 October 2024 19:00
According to the latest World Bank report, global commodity prices are expected to fall to a five-year low in 2025. This is reported by "Komersant Ukrainian" with reference to the World Bank.
The main reason for this will be an oversupply of oil, which will become so large that it will limit price effects even in the event of large-scale conflicts in the Middle East. Despite this, overall commodity prices will remain 30% higher than before the COVID-19 pandemic.
The WB report also says that global oil supply will exceed demand by 1.2 million barrels per day, a record high. This is due to changes in China, where oil demand has remained virtually unchanged since 2023 amid increased sales of electric vehicles and liquefied natural gas trucks. In addition, several non-OPEC countries are expected to increase oil production. In total, OPEC has reserve capacity of 7 million barrels per day.
According to experts, from 2024 to 2026, world commodity prices will fall by almost 10%. This will also lead to a 9% drop in food prices this year and another 4% in 2025. Energy prices are also projected to decline. However, the escalation of armed conflicts could offset these efforts, leading to an increase in food and energy prices.
The WB report also notes that gold prices will rise, as this metal is a popular choice for investors in times of instability. Over the next two years, gold prices will be much higher than before the COVID-19 pandemic. At the same time, prices for industrial metals will be stable due to the growing demand for them in connection with the energy transition.
