In 2025, global commodity prices are expected to fall to their lowest level in five (5) years, amid an oil glut.
According to the new World Bank report, energy prices are expected to fall by 6% in 2025, providing an opportunity for low-income economies to reduce fossil fuel subsidies.
Entitled “Commodity Markets Outlook 2024”, the report nevertheless highlights that overall commodity prices will remain 30% higher than they were in the five years preceding the Covid-19 pandemic.
Furthermore, in 2025, global oil supply is expected to exceed demand by an average of 1.2 million barrels per day, a figure that has only been surpassed twice before, during pandemic containment measures. of 2020 and the collapse of prices in 1998.
This new supply glut partly reflects a major shift in China where oil demand has virtually stagnated since 2023 due to a slowdown in industrial production and an increase in sales of electric vehicles and diesel-powered trucks. liquefied natural gas.
Additionally, several countries that are not part of the Organization of the Petroleum Exporting Countries (OPEC) or its allies (OPEC+) are expected to increase production.
To these days, OPEC+ itself maintains significant reserves, 7 million barrels per day, almost double the level seen in 2019, on the eve of the pandemic.
However, experts predict that between 2024 and 2026, global commodity prices are expected to fall by almost 10%.
Food prices are expected to fall by 9% this year and a further 4% in 2025 before stabilizing, but they will remain almost 25% above their average level over the 2015-2019 period.
Flora Musiswa
