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