Commodities saw the
biggest annual loss since the global financial crisis in 2008, retreating for a
record fourth year, as a global glut spurred a rout in oil prices and a
stronger dollar cut the allure of raw materials.
The Bloomberg
Commodity Index (BCOM), which tracks 22 products from crude to copper, lost 16
percent this year, with crude, gasoline and heating oil the biggest decliners.
A fourth year of losses would be the longest since at least 1991.
Energy prices
retreated in 2014 as a jump in U.S. drilling sparked a surge in output and
price war with OPEC, which chose to maintain supplies to try to retain market
share. The dollar climbed to the highest level in more than five years as a
U.S. recovery spurred speculation that the Federal Reserve will start to raise
borrowing costs next year.
Oil Outlook
While most
commodities looked oversold as the New Year neared, weak near-term fundamentals
were unlikely to bring much confidence, ANZ analysts including Mark Pervan said
in a report dated Dec. 22. An oversupplied market was likely to keep crude oil
prices under pressure, they wrote.
Deutsche Bank AG
this month cut its 2015 forecast for Brent to $72.50, down from an October
prediction for an average of $88.75. Goldman Sachs Group Inc. expects Brent to
average $80 to $85 a barrel in 2015, while WTI may trade at $70 to $75.
The Bloomberg
Dollar Spot Index, which tracks the U.S. currency against major peers, advanced
11 percent in 2014 amid speculation the Fed may raise interest rates in the
third quarter as the world’s biggest economy improves.
Click
here for the original article from Bloomberg
Businessweek.