I was on Yahoo finance last week — I told them that the oil market is facing a perfect storm.
Despite declining rig counts, U.S. production is still climbing. OPEC+? They’ve grown tired of cutting output, and more supply is on the way next month.
There’s just too much oil out there. And it’s not just oil—commodities across the board, from copper to lithium, are getting hammered.
Gas prices are now the lowest they’ve been in three years, and the demand just isn’t there to balance the scales.
We’ve seen this disconnect of collapsing commodity prices, relative to stocks, before: back in 2019, right before the pandemic, and in 2015. It’s rare, but when it happens, it sends ripples through the entire market.
The big question is: how long will it last?
I’ll tell you this: The Federal Reserve is going to have to serve up some serious rate cuts to avoid a real recession from happening, not just the threat of them.
It will only be when rates are lower OUT THERE ON THE STREET that commercial lending will start to come back and drive the demand that these commodities need to rally. But, until then, the commodity collapse will continue — and the threat of a recession won’t subside.
Dangerous times for investors? Yes – but also an opportunity. The last time the basket of commodities were this low, relative to stocks, was in 2019. Guess what happened? You got it – spiking commodity prices in copper, wheat, iron — and of course, oil and natural gas. We banked some great gains.
Want to do it again? So do I.
That’s what I’m laser focused on right now. Come join me in the search for some deep value commodity stocks that will pay off big in 2025.
