Higher oil and metals prices helped pull the August all- commodity price index of Scotiabank up by 1.2% from July. “Actual and threatened supply disruptions in the Middle East have pushed up the price of oil, fertilizers and base metals, more than offsetting declines in agriculture and forest products,” writes bank economist Patricia Mohr. Oil, which averaged US$27.38 per barrel in August, rose to nearly US$40 during September.
The all-items index for August returned to fourth-quarter 1989 levels, an impressive move but still 10% below the January, 1989, peak, Mohr points out.
The metal and mineral sub-index surged in August by 7.2% to stand slightly above its level of one year ago. Copper, aluminum, nickel, gold and sulphur posted large gains.
“Supply-demand conditions for most base metals have stayed in balance this year and the recent surge in oil prices has encouraged commodity fund buying by investors as a hedge against inflation,” Mohr says.
The all-commodity index tracks export prices of a variety of Canadian commodities, which are weighted according to their 1984 export values, except crude oil where the value of net exports is used.
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