Energy commodities enter 2026 at an interesting crossroads. On one hand, oil and gas markets have abundant supply and somewhat softer pricing. On the other hand, the ongoing energy transition is accelerating investment in new energy sources.

We expect tariff policy to remain a key part of the narrative pushed by the administration.

How will potential trends in inflation, the US dollar and supply deficits across many raw material markets affect the environment for investing in commodities?

Commodity returns are hard to predict, yet all commodities have something in common—prices that tend to return to their long-run average, a characteristic described as mean reversion. For investors, this behavior could offer an exciting opportunity to improve long-term performance potential.

As we move into the second half of 2024, let’s take a look at a familiar market dynamic that’s often misunderstood in commodity investing: Current inventory levels may be much tighter than futures curves are signaling.