A major struggle is currently raging on the commodity market. On the one hand, cyclically-oriented investors are speculating that international interest rates will steadily head up with an attendant pickup in the US dollar and correspondingly weak commodity markets. These contrast with the market operators who believe that the commodity sector has entered a lasting boom sparked off by the structural problems in the USA. However, both assessments are entirely complementary. The cyclical approach views the market from a short-term perspective, while the approach that focuses on the structural problems in the USA is more concerned with the long-term implications for the commodity sector.
Struggle on the commodity market: structure versus cycle
The economists at Allianz Group and Dresdner Bank weigh up both sides of the argument and come to the conclusion that the upswing in prices , triggered by a renewed weakness in the greenback, will continue in 2004.
The price of crude oil has developed its own momentum. A glance at the current supply of physical oil meanwhile shows supply and demand more or less in balance. And with speculation on the futures markets more subdued of late, there is a good chance that the oil price will stabilize at around USD 33.