News

May 31, 2009

The Week In Alternative Power: Commodity Prices Increase At Their Most Rapid Rate For 34 Years

By Sally White

Commodities headed for the biggest monthly rally in 34 years last week, led by energy, as the slumping dollar and optimism about economic recovery boosted demand for raw materials. In May the Reuters/Jefferies CRB Index of 19 commodities gained 14 per cent, the largest jump since 1974, oil prices soaring by 29 per cent, the most since March 1999, driving up alternative feedstocks, corn and soya. “The belief that the world economy is not going down into a black hole any more has brought a lot of investors back in,” said Peter Sorrentino at Huntington Asset Management in the US. “You also have the threat of inflation, and that means that people just want to have hard assets”.

Confidence among US consumers rose this month to the highest level since September, reinforcing signs that the recession is abating. Japan’s industrial production in April jumped by the most in 56 years in April and India’s economy expanded in the first quarter by more than economists forecast. “Commodity markets at large are continuing to benefit from improving sentiment and risk appetite, supported by a flow of increasingly positive macroeconomic data," said Barclays Capital. On Friday,...