What Does 2015 Hold for Commodities?

Having traded in a sideways pattern for much of the past four years oil prices have been in virtual freefall since mid-year as global demand subsided and supply continued to increase

Andy Brunner 10 December, 2014 | 12:45PM

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Year to date all the main commodity sub-sectors have lost money and the main index was down another 6% in November led by a very weak energy sector that collapsed by 13%. This continued a long, difficult period since the commodity index peaked in April 2011 since when it has fallen 27%. Can there be much further downside given that crude oil is down 45%, gold 38% and copper 35% from their 2011 highs, while corn and wheat have collapsed 58% and 35% respectively from 2012 highs?

All recent news headlines have unsurprisingly centred on the energy market, particularly crude oil. Having traded in a sideways pattern for much of the past four years – Brent mostly trended between $100-120 per barrel – oil prices have been in virtual freefall since mid-year as global demand subsided and supply continued to increase thereby raising inventory levels.

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About Author

Andy Brunner

Andy Brunner  is Head of Investment Strategy, Morningstar UK

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