Advertising
Advertising
twitter
youtube
facebook
instagram
linkedin
Advertising

IG analyst to FXMAG.COM: In my opinion commodity prices already reflect higher oil prices

IG analyst to FXMAG.COM: In my opinion commodity prices already reflect higher oil prices| FXMAG.COM
Aa
Share
facebook
twitter
linkedin

Table of contents

  1. FXMAG.COM: Do you expect elevated crude oil prices to drive general rise of commodities prices?
    1. This descent may even continue as a potentially appreciating dollar and global demand concerns due to tighter financial conditions after the March banking crisis weigh on the price of oil

      FXMAG.COM: Do you expect elevated crude oil prices to drive general rise of commodities prices?

      Axel Rudolph FSTA, Financial Analyst at IG, said: 'It is true to say that higher oil prices tend to contribute to a rise in commodity prices since the cost of extracting or harvesting commodities and transport costs increases with higher energy costs.

      Axel Rudolph: As the price of oil has been oscillating around the $80 per barrel mark since November of last year, however, it has remained relatively stable, meaning that the higher oil price compared to a few years ago has already been factored in to the current price of commodities. Furthermore, compared to last year's peak in the price of oil of around $125, the price of the energy commodity has significantly declined. This descent may even continue as a potentially appreciating dollar and global demand concerns due to tighter financial conditions after the March banking crisis weigh on the price of oil.

      This descent may even continue as a potentially appreciating dollar and global demand concerns due to tighter financial conditions after the March banking crisis weigh on the price of oil

      Read next: Crude oil to close the the post-OPEC+ gap? Gold "remains choppy"| FXMAG.COM

      Axel Rudolph: In addition, commodity prices tend to a larger degree be affected by specific factors such as changing weather patterns, blights and harvesting/production/transport issues which affect their supply and generally only to a smaller extent by the change in the price of oil, unless it changes rapidly, as it has done over the past couple of years.

      Axel Rudolph: In my opinion commodity prices already reflect higher oil prices and, unless these become as volatile as they have been during 2022, should not significantly contribute to a further rise in commodity prices.'


      Axel Rudolph

      Axel Rudolph

      Axel Rudolph is a Senior Market Analyst at IG and a multiple award-winning cross asset technical analyst, having over the last decade been ranked in the top 3 in the international FX Euromoney Survey and winning it in 2014 and in 2019.

      Before joining IG Axel held technical analysis and trading positions at Commerzbank, Société Générale, The Co-Operative Bank and Dow Jones Newswires. He is a Fellow, Non-Executive Director and Head of Education at the Society of Technical Analysts (STA), having previously been its chairman.

      Axel has also been a lecturer in technical analysis at several London universities for over two decades and Vice-Chairman Europe on the board of the International Federation of Technical Analysts (IFTA).

      Follow the author on:

      LinkedIn | Twitter


      Advertising
      Advertising