Key points

• Strength in commodities appears to be spreading beyond precious metals into energy and industrial metals, prompting questions about whether a longer‑running cycle may be taking shape.
  
  
• Brent crude spreads suggest tight conditions in the near term, while longer‑dated futures imply little concern about supply a year from now.
  
  
• Stockpiling, geopolitical risk and a shift towards more global fragmentation may be pushing risk premia for commodities higher in the near term, even as longer‑term supply expectations remain relatively anchored.

Less than two months into the new year, the commodities rally may be broadening beyond precious metals to energy and non-precious metals. It’s early, but given that commodities are known for supercycles—those that can last over a decade, driven by long-term trends—we’re considering what may be behind this broadening. The oil futures curve offers clues.

The chart below shows two futures spreads over the last two decades. One line measures the price difference, or spread, between the near‑expiration Brent crude oil futures contract and the contract one year out. When the spread is positive, with near-term prices exceeding further-out prices, it typically signals near‑term excess demand or equivalent tightness in supply. A second line compares futures prices further out—the one‑year contract versus the three‑year—and captures longer‑term supply‑demand imbalances.

Expectations for oil supply and demand diverge over the short and long term

Note: Data reflect 30-day moving averages of Brent crude spreads.

Sources: Vanguard calculations, based on Bloomberg data, as at 9 February 2026.

For much of the past two decades, these short‑ and long‑term spreads have moved together, reflecting broadly consistent market views across time horizons. A notable exception occurred during 2006–07, towards the end of the last commodity supercycle, when strong long‑term demand expectations—driven largely by China—supported longer‑dated prices even as near‑term fundamentals appeared less tight.

Another unusual exception—a reversal of the 2006–07 pattern—accompanies today’s broadening of the rally. Shorter‑term spreads indicate tight market conditions here and now, while longer‑term spreads suggest a lack of concerns about supply a year from now.

So, what’s behind the near-term tightness? Some of it may stem from a desire to build stockpiles, hedging against the potential for supply-chain disruptions amid elevated geopolitical risks. At a deeper level, the evolving nature of globalisation, towards more fragmentation, may be at play.

Nations’ efforts to prioritise resource security, reshore supply chains and reduce strategic dependencies have the potential to reshape commodities markets. The resulting heightened competition suggests the possibility of higher risk premia being priced into commodities, likely pushing up prices in the near term even as longer‑term supply expectations remain comparatively well anchored.

Whether this condition lasts bears watching. If it remains a force over the coming years, commodities markets—particularly in critical minerals, gold, and energy—could command more persistent risk premia than in previous decades.