Will the monetary stimulus campaign result in higher commodity prices?
*Financial Times, by Chris Flood & Javier Blas, May 12, 2009
“The oil price on Tuesday rose above $60 a barrel for the first time since November, as traders bet that evidence of economic ‘green shoots’ would boost demand.
The rise in the June Nymex June West Texas Intermediate contract of $1.58 to $60.08 a barrel attracted fresh speculative buying from investors.
West Texas Intermediate has now risen almost 85 per cent from February’s low of $32.70 a barrel. ICE June Brent hit an intraday high of $58.91.
‘Recent price strength is not based on fundamentals, but on financial flows,’ said Mike Wittner, a senior oil analyst at Société Générale in London. He said that investors’ appetite for riskier asset classes such as commodities was ‘better entrenched, and more sustainable’ than earlier this year.”
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