Is the commodity bull coming? Goldman Sachs: I've never seen such a market. We lack everything.

Jeff Currie, an economist at (Goldman Sachs) Global Investment Research and head of global commodities research at Goldman Sachs, said a few days ago that all commodity markets are in a state of shortage. He points out that in his 30-year career, he has never seen such a shortage.

"I've been in this business for 30 years and I've never seen a market like this," he said in an interview. This is a 'molecular' crisis, we have nothing, whether it is oil, natural gas, coal, copper, aluminum, as long as you can think of, we have nothing. "

Referring to the recent rebound in oil prices, Currie said that because the impact of Omicron (Omicron) was not significant, demand was much stronger than anyone thought, while underinvestment on the supply side had also led to a tightening of the market.

It is reported that the Bloomberg spot index of commodities, (Bloomberg Commodity Spot Index), which tracks 23 futures of energy, metals and crops, hit an all-time high earlier this year, while the futures prices of many commodities, including oil, have seen strong spot premiums, indicating a tight supply in the market.

Currie explained that at present, there are a very large number of commodity futures in the "inversion structure". The so-called inversion structure means that the futures price of the near-month contract is higher than that of the far-month contract. Such a market structure suggests that commodities are scarce, a tight situation that highlights supply shortages at their highest level since at least 1997. Specifically, 19 of the 28 commodities are in this structure.

In the energy market, strong demand for oil and gas has exceeded supply capacity. Global supply shortages have also boosted metal prices, especially in the context of superimposed clean energy consumption growth. In agriculture, crop yields are limited by bad weather, and drought has dampened soybean production prospects across South America.

Daniel Haines (Daniel Hynes), senior strategist at Australia and New Zealand Banking Group (Australia&New Zealand Banking Group Ltd.)), said: "at the heart of all this is the energy transformation, which will affect commodities in the foreseeable future. Spare capacity is relatively low and cannot make up for the potential risk of supply. "

Goldman Sachs largely reiterated its optimism about commodities a month ago, when it said oil prices could reach $95 if Iran did not return to the market this year, while commodities overall could enter a supercycle that could last 10 years. At the time, he said there was still a lot of money in the financial system and very low investment positions in commodities, laying the groundwork for further increases in oil and other commodity prices.

Last week, Karen Karniol-Tambour, an executive at Bridgewater, the world's largest hedge fund, said commodities were the most underutilized hedge against inflation as the economy expands and prices rise. "what you need to look for are assets that will perform well in the face of economic growth and inflationary pressures. I personally prefer metals and carbon emissions. "