“The fundamentals are turning the corner,” he told CNBC, arguing demand for oil is rebounding as recession fears fade. Currie now expects Brent Crude oil prices, the international benchmark, to jump roughly 16% from current levels to $86 per barrel by the end of the year. That could lead to a rebound in U.S. retail gasoline prices, which have dropped 27% over the past year from a nationwide average of $4.86 per gallon to under $3.60, according to the American Automobile Association, and acted as a major contributor to inflation slowing from above 8% last summer to its current rate of around 4%. 

Currie argued investors “priced in a bearish scenario” for oil and gasoline earlier this year, but now many are recognizing “there’s not much evidence out there of a recession” to keep demand low. “Nearly every other commodity has turned the corner,” he said. “All of them seem to have shredded the concerns around the recession.” 

To his point, after falling for several months, natural gas prices are up 15% this month, coal prices have jumped 24% over the same period, and copper and wheat prices are now 5% and 8% off their May lows, respectively. 

However, S&P Global’s Dow Jones Commodity Index, a broad measure of commodity futures prices worldwide, is still down nearly 17% year over year. And Brent Crude oil prices have also dropped 36% since this time last year, from over $116 per barrel to less than $75. But Currie said Thursday that he believes the current weakness won’t last. 

He noted that many petrochemical companies which relied on crude to produce record amounts of plastics during the pandemic are now seeing their businesses slow. “It’s giveback time,” he said. “That weakness is weighing on WTI and Brent [crude oil] prices, plus some refinery outages…but this should be temporary.”

The supply-and-demand dynamics that drive oil prices are signaling a bullish scenario, according to the veteran commodities analyst, who pointed to falling U.S. crude storage levels.  

U.S. crude oil inventories fell by 11 million barrels this week and roughly 6 million barrels last week in a sign that supply is tightening. And the Biden administration will have to begin refilling the Strategic Petroleum Reserve (SPR) after releasing 180 million barrels of oil from the network of underground salt caves in Louisiana and Texas throughout the pandemic in a bid to lower retail gasoline prices. That should help keep oil demand elevated throughout the year, according to Currie. 

For more than a year now, Currie has also maintained that a lack of spending on oil production over the past decade has helped to kick off a “commodity supercycle” which will ultimately force prices higher over the long-term. These periods of sustained high commodity prices that typically last 15 to 20 years have been a common theme throughout history.

However, the veteran commodities analyst has also revised his bullish forecast multiple times over the past year. Back in November, he argued oil prices could hit $115 per barrel in 2023 due to a supply squeeze. But in February, he backed off that target, arguing $100 per barrel was more reasonable amid recession fears. Then, earlier this month, he cut his outlook once again to the current $86 per barrel, telling Bloomberg that although he still believes in the long-term supercycle thesis, the near-term upside isn’t as strong amid oil supply increases from nations facing ineffective Western sanctions, including Russia, Iran, and Venezuela.

Now, Currie says he is “sticking with” that $86 per barrel year-end price target for Brent Crude, arguing the commodity supercycle is inevitable—and he’s not alone. 

Wells Fargo’s head of real asset strategy, John LaForge, has long argued that “commodity bull supercycle” began in March 2020 and is set to keep oil prices elevated for years. “Super-cycles are like black holes,” LaForge wrote in a May note to clients. “Escaping the gravity of a super-cycle is difficult for the individual commodity.”