[Bulk Commodities] Is the cycle for oil and petrochemicals about to arrive?

[Bulk Commodities] Is the cycle for oil and petrochemicals about to arrive?

It's like the tap being turned down while more people are using water—the price of water naturally goes up.

There's also a pattern many people overlook: the rotation of commodities. Historically, every commodity super-cycle hasn't seen all varieties rise together; it's like a relay race, one leg after another.

First gold and silver, because they have the strongest financial attributes and rise fastest when money is printed excessively. The gains in gold in 2025 have already proven this.

Then industrial metals like copper and aluminum. As the economy recovers and infrastructure investment increases, demand for industrial metals rises. Copper prices have already surged over the past year.

Next up should be energy and chemicals. Why are they later? Because oil supply is relatively flexible—OPEC+ can adjust production. But in the long run, supply constraints will always show up.

Now gold has risen, copper and aluminum have risen. According to historical patterns, oil is next.

And from a valuation perspective, the gold-to-oil ratio and copper-to-oil ratio are already at historical highs, which shows oil is clearly undervalued relative to other commodities.

On top of that, policy is helping. In 2025, the Ministry of Industry and Information Technology and other departments issued the Detailed Rules for Implementing Capacity Replacement in the Chemical Industry, strictly controlling new capacity.

Policy has curbed the supply side. Chemical companies are no longer blindly expanding production and waging price wars, but competing rationally and protecting profits—this is "anti-involution." The improvement in supply-demand relations creates good conditions for the petrochemical sector to rise.

Who benefits most when oil prices rise? The answer is the entire petrochemical supply chain. The logic is simple: oil is the raw material for chemical products. When oil prices rise, chemical costs increase, and prices inevitably follow. It's like when vegetable prices go up, restaurants have to raise prices too—same principle.

And the chemical industry now has its own supply-demand improvement logic. Take PTA as an example: there's almost no new capacity in 2026, but downstream polyester still has new capacity coming online. Supply isn't increasing while demand is still growing, so supply-demand relations will naturally improve.

Prices of chemicals like MDI and TDI have already started rising—that's the result of "anti-involution."

So you see, oil price increases are the big logic, and the chemical industry's own supply-demand improvement is the small logic. When the two overlap, opportunities in the petrochemical supply chain emerge.

So when exactly will it rise? Where's the time window in 2026?

In the short term, oil prices will still fluctuate. The International Energy Agency predicts the global oil market may be oversupplied in the first half of 2026, so the first half may continue to bottom out and won't surge immediately.

But the second half will be significantly different. Once the peak demand season arrives and supply can't keep up, oil prices could be pulled up quickly.

And there's the geopolitical variable. If conflicts in certain regions cool down and countries start replenishing strategic reserves, that will directly push oil prices up.

So 2026 is likely a turning point, and oil could rise at any time.

You can watch three signals: major oil producers signaling willingness to negotiate production cuts, which means a phased rebound in oil prices; major oil producers jointly cutting production and effectively implementing it, which means the oil price center trends upward; and production cut agreements being strengthened in both degree and duration, which could trigger a surge in oil prices.

After all, making a fortune in life depends on cycles. The rise in commodity prices is the power of cycles. Gold has risen, copper and aluminum have risen, and next up is oil and petrochemicals. This isn't speculation—it's historical pattern.