By now, it might feel like we’re beating a dead horse with our two cents on this one, but commodities are rising (and there’s no sign they’ll be giving up any time soon).
Oil climbed 4% this week after the U.S. government indicated that they would not release oil from its strategic reserves. Demand for oil has increased thanks to sky-high natural gas prices. Natural gas, arguably the biggest commodity winner, is up 129% YTD. It’s joined at the hip by gasoil, heating oil, gasoline, and WTI and brent crude.
In short: energy commodities are hot. However, they’re not the only ones.
In fact, the Bloomberg Commodity Spot Index hit an all-time high this week. The index, which tracks energy, metals, and crop futures contracts bested a 2011 record this week. It’s up 92% since hitting a low during the pandemic. If only we knew. 🤯
Coffee, aluminum, cotton, sugar, and other commodities have hit it big this year, appreciating high-40% and low-50% gains YTD.
With commodity prices on the rise, investors will be watching producers and companies interfacing with the commodity crisis. However, an alternative to investing in companies that are dealing in production is buying ETFs with rolling futures (such as $BCI or $PDBC.)