The World Bank estimates global commodity prices will fall to their lowest levels in five years in 2025 and keep falling the following year due to an oil surplus, according to the recently released Commodity Markets Outlook report for October 2024.

The oil surplus would be large enough to limit the price effects of an even wider conflict in the Middle East, said the report, though overall commodity prices will remain 30% above the levels seen during the coronavirus pandemic.

The oil prices are estimated to fall 5.1% in 2025 and 1.7% in 2026 after declining 3.4% in 2024.

The increases in natural gas prices and the stable outlook in metals and agricultural raw materials will somewhat limit the declines across the board.

The global oil supply is estimated to exceed demand by an average of 1.2 million barrels per day next year — this sort of abundance was seen during the pandemic in 2020 and when oil prices collapsed in 1998.

The barrel price of Brent crude oil, meanwhile, is estimated to be at $80 on average in 2024, falling to $73 next year and $72 in 2026.

Global food prices are estimated to stabilize after falling 8.5% this year and 4% next year, according to the report, while prices are forecast to remain about 25% above the average of 2015-2019.

The report showed that energy prices are estimated to decline 5.8% in 2024 and 6.2% next year while forecasting a 2.1% fall in 2026. It said the decline in food and energy prices will benefit central banks in the fight to control inflation.

The possibility of escalation of conflict in the Middle East, however, poses a great upside risk to energy prices for the near term and it could very well have knock-on consequences on other commodity prices, disrupting energy supplies, the report said.

The average price of gold, meanwhile, a haven asset among investors, is estimated to break a record in 2024, rising 21% above its average of last year, said the report amid geopolitical tensions and political uncertainties, and gold prices are estimated to remain 80% higher in the next two years than the five-year average of before the pandemic.

As for industrial metal prices, a stable course is forecast for the next two years as the weakness in China’s real estate sector is counterbalanced by tight supply conditions and increased demand for some metals for energy transformation, while unexpected growth in China could result in metal market volatility.