Commodities prices rise for third consecutive month in September

Global commodities prices extended their two-month rally in September, according to an estimate by FocusEconomics. The FocusEconomics global price index increased 2.5% from August. Soaring energy prices led the rise, followed by more moderate price increases for base and precious metals. Agricultural prices, however, declined for the second month in a row. On an annual basis, the recovery in prices following the 2015–2016 price collapse remained strong, and the index expanded at a double-digit rate for the third straight month. The global index jumped 20.7% over the same month last year, the largest increase in seven months and up from August’s 18.0% year-on-year gain.

Brent Crude Oil prices jumped to a two-year high in recent weeks on the back of strong global demand and tighter supply from producers participating in the oil cut deal. While Russian and Saudi officials signaled that they are ready to extend the oil cuts to the end of 2018 in order to support prices, markets are skeptical of whether key oil suppliers will stick to the deal for an extra year, as many participating countries continue to grapple with large fiscal imbalances. Moreover, shale oil producers are expected to boost output in a context of higher prices, partially offsetting the efforts made by OPEC and Russia. While WTI Crude Oil prices remain more subdued, they also jumped in recent weeks mainly due to the increased Brent-WTI differential. Relatively low WTI Crude Oil prices boosted U.S. oil exports, which hit a record high of just below 2 million barrels per day in the last week of September.


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Gasoil prices soared to a two-year high in recent weeks following disruptions in U.S. Gulf Coast refineries due to a devastating hurricane season. Stricter environmental regulations in China also boosted prices for a number of commodities ranging from thermal coal to alumina. Zinc prices hit an over ten-year high, reflecting the Chinese government’s efforts to curb pollution and higher demand from China. Precious metals saw higher prices due to mounting global uncertainty. In contrast, agricultural prices continued to underperform relative to other commodities groups mainly due to higher supply for key commodities.

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