At a recent gathering of financial analysts at a hotel in Baltimore, one of the participants asked me: “Do you think we’re on the verge of a commodities super-cycle?” I promptly replied: “The super-cycle has already begun. We’re smack dab in the middle of it.”

A super-cycle is a decades-long, above-trend, bull market in a wide range of base material prices, stemming from a structural change in demand. It’s how fortunes are born. Below, I’ll discuss the latest ramifications of the super-cycle for investors, especially in terms of crude oil. First, let’s look at broader market action.

After last week’s decline, U.S. stocks on Monday closed slightly higher, amid sharp volatility. The main indices performed as follows: the Dow Jones Industrial Average +0.05%; the S&P 500 +0.31%; the NASDAQ +0.40%; and the Russell 2000 +0.36%.

In pre-market futures contracts Tuesday, the main U.S. indices were trading lower, after bellwether retailer Target (NYSE: TGT) issued a profit warning that spooked investors.

Geopolitical conflict, supply chain disruptions, scarcities, infrastructure spending, and emerging market development are boosting commodities prices. Prices for essential raw materials have embarked on a long-term upward trajectory.

The world’s most valuable commodity, crude oil, has been soaring in price. The following chart shows the per-barrel price of the U.S. benchmark West Texas Intermediate (WTI), over the past 12 months (data from the U.S. Energy Information Administration):

Accordingly, energy has been the top performing sector so far in 2022. Year to date, the benchmark SPDR S&P Oil & Gas Exploration & Production ETF (XOP) has gained 70.05% versus a decline of -13.53% for the S&P 500 Index (as of market close June 6).

Energy stocks as a whole are oversold; the shrewd way to profit from energy’s resurgence is to pinpoint under-appreciated value plays or potential takeover targets. The same rule right now applies to commodities producers. In a minute, I’ll point you in the direction of an under-the-radar mining company that’s poised to soar.

A voracious consumer of commodities is China, and the latest news out of the world’s second-largest economy is cheering investors. Beijing is easing pandemic restrictions, reporting falling COVID infections, restarting quarantined factories, and backing-off on its technology sector regulatory crackdown.

China’s leaders had been turning the screws on high-profile tech managers and companies, to remind restive entrepreneurs (e.g., Jack Ma) who’s really boss. But China has lately taken a more lenient stance, to the collective relief of the global tech sector. China-based tech stocks, which had been under pressure, are rebounding.

What’s more, the Biden administration is suggesting possible relief from Trump era tariffs on Chinese imports, partly as a way to alleviate inflationary pressures, but mostly to eliminate counter-productive sanctions. History shows that tariffs never work and only hurt all parties concerned.

Read This Story: Inflation: Still The Big Story

China’s crude oil imports grew nearly 7% in April from the same month a year earlier. As COVID restrictions in China ease, the summer driving season gets underway, and jet fuel continues to recover, world oil demand is on track to increase by 3.6 million barrels per day from an April low through August, according to the International Energy Agency’s May 2022 Oil Market Report.

Crude prices are hovering within a whisker of the $120 per barrel level for the first time since March. Rising crude prices in turn are feeding inflation. As of this writing, the benchmark 10-year Treasury yield hovers above the 3% level, amid persistent inflation worries.

Investors anxiously await the May reading on the U.S. consumer price index, set for release this Friday. It’s my view that core inflation has peaked and will trend lower as the rest of 2022 unfolds. The rate of that inflationary easing will guide the Fed’s level of hawkishness.

After a prolonged swoon through April and May, stocks so far this month have rallied nearly 10% off their 2022 lows. This partial rebound underscores the wisdom of sticking to your long-term strategy and staying invested, even as the rest of the herd panics.

Commodities: the “super cycle” is underway…

Under the conditions I’ve just described, it makes sense for investors to increase exposure to commodities. The world is clamoring for vital raw materials, such as iron ore, copper, aluminum, zinc, lithium, helium, and rare earth minerals.

As China’s economic growth gains traction again, these commodities should soar in price. The “roaring 2020s” will feature a transnational super-cycle in commodities.

Infrastructure has taken a back seat as a story topic in the press, as the Russia-Ukraine war and inflation hog the headlines. But don’t forget, the U.S., China, Europe, Asia, Africa…nearly every region on the planet…is significantly boosting infrastructure spending. That’s a long-term bonanza for commodities demand. Scarcities of these vital raw materials are further driving up commodities prices.

Commodities also make an effective hedge against inflation. For details about a mining company that’s undervalued and positioned to prosper, click here now.

John Persinos is the editorial director of Investing Daily.

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