Earlier this year, there was a surge in oil prices but it wasn’t the only commodity that has seen a rise. As reported by the trucking market website FreightWaves, copper’s price raised from $2.17/lb in April to $3.60/lb earlier this winter. Corn was $3.10 a bushel at summer’s end, and ended up close to $5.30 a bushel toward the end of winter.

This raising of commodities in the market might point to a bull market, and that’s what some experts are predicting. And yet, it’s not just any kind of bull market.

During a recent podcast, Goldman Sachs’ head of commodities, Jeff Currie, called it a “structural bull market.” What does this mean? Basically, a bull market means that commodities move up at least 20% from a single-digit starting point. Structural bull markets take longer to make those kind of moves and with more types of commodities seeing a rise instead of just one or a handful.

Currie’s view toward this type of bull market is definitely informed by oil as its leading indicator. As quote in the FreightWaves story from his podcast remarks, Currie believes that the impact of the pandemic on the oil market has been part of what has caused such a shift.

“If you separate them out, the commodity most severely impacted by COVID is oil, because it sits in the center of social contacts and globalization,” Currie said.

To that end, the surge in oil prices suggests that more travel and socialization are taking place globally, which means demand is getting larger. This also has an affect on other commodities in which demand is a major driver, according to Currie. In fact, it’s lead to something that he said has never taken place before – or at least he hasn’t seen it.

“Every single commodity market is in a deficit today, meaning that demand exceeds supply,” Currie said.

There are some other takes on commodities and the surge in prices. Another expert – Mike McGlone from Bloomberg Intelligence – mentions in the article that renewed incentives to curb carbon emissions may lead to less demand as the recovery from the coronavirus continues.

McGlone believes that other commodities on the rise, such as copper, are going to benefit from from he called “the new electrification and decarbonization economy.”

As far as oil is concerned, there’s also a matter on investment in general. Currie cited less bank investment in oil and gas drilling as a sign that capital – and therefore prices – are going to be changing, and more toward a bullish market. And it’s not just oil: “I see it across the board in metals, mining and agriculture,” Currie said.

Add to that a boost in demand from consumers for commodity products – partially due to the various stimulus packages – and it seems like a bullish market is at the very least on the horizon. To learn more about commodities trading and how it can affect your own finances, visit our website.