Volatile Crude Oil Prices Confound Analysts
Source: Seeking Alpha, The Aft Deck (7/1/09)
"The usual relationships between commodities prices and the economic cycle [have] been redefined."
Weaker-than-forecast U.S. consumer confidence data and the U.S. dollar rising against the Euro were seen by some as prompting the later falls, while others argued that the unusually high trading volumes overnight in Asia were evidence that large investment funds had been changing their crude oil positions for the end of the quarter, causing a temporary price rise. Nevertheless, crude oil registered its largest quarterly gain since 1990.
Barclays Capital argued that the surge in energy, metals and agricultural products that has pushed the Reuters/Jefferies CRB commodities index up 25% since the start of March marked a "revolution" in how investors view the commodities cycle. "The usual relationships between commodities prices and the economic cycle [have] been redefined," Barclays Capital said in its summer 2009 outlook.