Publications: Notes at the Margin

A "Crashingcycle" for Oil and Natural Gas Prices (April 14, 2025)

 

Commodity traders such as Jeffrey Curry, the former Goldman Sachs executive, have often talked of commodity supercycles, trumpeting the rise in commodity prices, the profits of companies in the commodity business, and the income of commodity-exporting nations like Saudi Arabia. It was just four years ago that analysts announced the arrival of a new commodity supercycle:

 

"Oil and other commodities have probably entered a so-called supercycle as a post-pandemic economic rebound and swelling inflation spark expectations of rising demand, according to JPMorgan Chase & Co."

 

"A new multi-year boom appears likely, given investor desire to hedge against inflation and a weaker dollar as central banks adopt “ultra-loose” policies and governments boost spending."[i]

 

In April 2025, a reverse cycle of similar magnitude is taking hold. We call it, for lack of a better term, a “crashingcycle.” Before it ends crude oil could fall below $20 and perhaps even $10 per barrel. US natural gas prices might drop below $1 per million cubic feet.

 

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