# Commodity Prices Projected to Reach Six-Year Low by 2026 Amid Expanding Oil Surplus

- Link: https://www.thailand-business-news.com/economics/254579-commodity-prices-projected-to-reach-six-year-low-by-2026-amid-expanding-oil-surplus
- Published: 2025-11-01T09:24:00+07:00
- Author: Angela Reyes

The World Bank Group’s latest Commodity Markets Outlook projects global commodity
prices to reach a six-year low in 2026, marking a fourth consecutive year of decline.
This trend is attributed to weak global economic growth, an expanding oil surplus,
and persistent policy uncertainty, with prices expected to drop 7% in both 2025 
and 2026.

Key highlights include:

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 * **Energy Prices:** Falling energy prices are contributing to lower global inflation.
   The oil glut is significant and expected to grow, leading to a forecast drop 
   in Brent crude oil prices to $60 in 2026, a five-year low. Overall energy prices
   are projected to decrease by 12% in 2025 and another 10% in 2026.
 * **Food Prices:** Food prices are also easing, with projected declines of 6.1%
   in 2025 and 0.3% in 2026. However, fertilizer prices are expected to surge 21%
   in 2025 due to input costs and trade restrictions, potentially impacting farmers’
   profits and future crop yields.
 * **Precious Metals:** Precious metals, particularly gold and silver, have reached
   record highs in 2025 driven by demand for safe-haven assets and central bank 
   purchases. Gold prices are forecast to rise by 42% in 2025 and an additional 
   5% in 2026.
 * **Risks and Opportunities:** Potential risks include sluggish global growth, 
   prolonged trade tensions, and increased oil output. Conversely, geopolitical 
   tensions could drive oil and safe-haven commodity prices higher. The rapid expansion
   of AI and its associated electricity demand may also influence energy and base
   metal prices.
 * **Policy Recommendations:** The report advises governments to leverage the respite
   from lower inflation for fiscal reforms, business readiness, and accelerating
   trade and investment. It also suggests fostering diverse production, investing
   in technology, improving data transparency, and promoting market-based pricing
   for long-term resilience, rather than relying on past price-control schemes.

_“Commodity markets are helping to stabilize the global economy,” _said **Indermit
Gill_, _the World Bank Group’s Chief Economist and Senior Vice President for Development
Economics**_. “Falling energy prices have contributed to the decline in global consumer-
price inflation. But this respite will not last. Governments should use it to get
their fiscal house in order, make economies business-ready, and accelerate trade
and investment.”_

The report suggests that lower oil prices present an opportunity for developing 
economies to implement fiscal reforms that foster growth and job creation, including
phasing out fuel subsidies to redirect resources towards infrastructure and human
capital. The special focus section of the report also reviews the history of international
commodity agreements, concluding that market-based pricing and fostering diverse
production are more effective for long-term resilience than price-control schemes.

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_“Lower oil prices provide a timely opportunity for developing economies to advance
fiscal reforms that promote growth and job creation,”_ said **Ayhan Kose, the World
Bank’s Deputy Chief Economist and Director of the Prospects Group**. _“Phasing out
costly fuel subsidies can free up resources for infrastructure and human capital—
areas that create jobs and strengthen long-term productivity. Such reforms would
help shift spending from consumption to investment, rebuilding fiscal space while
supporting more durable job creation.”_