No happy end in sight for commodities – Commerzbank

By FXStreet FXStreet (Córdoba) – Commodity prices look set to tread water next week. While the current oversupply on the oil market argues against a price recovery, next year’s prospective lower supply does not argue for a further slump in prices either, said Barbara Lambrecht analyst at Commerzbank. She added that base metals are unlikely to benefit from the fact that there is no major gap between supply and demand on most markets at present. The gold market appears to have priced in the first Fed rate hike after almost ten years.

Key Quotes

“OPEC’s inability to find a consensus has temporarily sent the price of Brent below USD 40 per barrel. With no cuts in OPEC supply, the market will remain oversupplied for now. This argues against a near-term price recovery, implying that energy sources will probably end the year with the largest price losses of all commodities. However, another major slump in prices also appears unlikely with a significant drop in US oil production on the cards in 2016. Instead, we believe oil prices will recover once lower supply is evident from hard data next year. “

“At -25% . year-to-date, base metal prices have so far performed only slightly better than energy …read more

Source:: FX Street