According to Citi analysts, commodities have outperformed other assets by a large margin to-date as approximately 20 of the 27 active contract markets tracked are on the rise, reported MarketWatch. However, not all of them are expected to continue doing so.?
Coffee?and lean hogs are the leaders with the great price rises to-date with West Texas Intermediate crude as the lowest. For the commodities on the decline, this included brent crude?having the small percentage loss while iron ore owned the greatest.?
Should this continue, analysts believe it may??re-awaken investor interest in the asset class.? This comes as the negative correlation between the U.S. dollar and commodities has played out and gone back to its ?more normal random relationship? as well as the “historical blend of some commodities rising and others falling in value ? has also come back to the fore.?
In addition, oil markets have stayed within a $106 to $111 per barrel range which has ?defined the Brent market for six months now, ? according to analysts. They added that ?this range has held despite the extreme winter in the U.S. which drained energy inventories across the board, and the Ukrainian crisis injecting a new source of geopolitical tensions to the oil market, one that looks unlikely to be resolved in the immediate future.?
The analysts do have an expectation for Brent prices to ?come under more pressure as the year progresses and Iraqi production continues higher and Iranian barrels come back to the market.? This comes with an assumption that negotiations with a “certain world power continue.”
Analysts have forecast average Brent prices at $103.30 for this year.?