As market challenges ease, UBS strategists predict that major commodity sectors will bottom out in the coming months. Despite weak performance in most categories, the outlook remains positive, with sector-wide recovery and growth into 2025.
Over 6-12 months, total returns of at least 10% for the UBS CMCI are forecasted. The energy sector, particularly crude oil, is under pressure due to macroeconomic concerns in the US and Europe, reduced oil refinery activity, and lower crude imports from China.
UBS forecasts a rebound in oil prices, driven by rising compliance among OPEC+ members and a consistent decline in global oil inventories. The transition to a net-zero global economy will require an estimated $100 trillion by 2050, with industrial metals like copper, lithium, and aluminum playing a foundational role in electrification and renewable energy projects.
UBS analysts anticipate double-digit returns for industrial metals over the next 12 months, driven by increasing demand for these materials to support decarbonization efforts.
