Finance World

VIENNA, 27th March, 2015 (WAM) -- The price of OPEC basket of twelve crudes stood at US$54.55 a barrel on Thursday, compared with US$50.83 the previous day, according to OPEC Secretariat calculations.

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The Federal Open Market Committee meeting on Wednesday was the highlight of this week. A lot of attention is currently being given to the US Federal Reserve as speculation about when and by how much it will raise its official Fed Funds rates. The statement by Fed chair Janet Yellen left the door open for a rate hike in September but at the same time the committee turned more dovish on how much rates need to rise.

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By: Head of Commodity Strategy at Saxo Bank Ole Sloth Hansen

 

February may have marked a first rise in eight months for commodities, but it was back to type in the first week of March with weakness across most sectors. 

This was driven by the adverse impact of the dollar rising to a fresh 11-year high against the euro while China downgraded its growth target for 2015 to just 7%, the lowest in more than decade.  

 

The resumption of dollar buying occurred as the market prepared for the beginning of quantitative easing from the European Central Bank. 

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By: Head of Commodity Strategy at Saxo Bank Ole Sloth Hansen

The rising dollar has become one of the most watched features and one the biggest drivers across most asset classes. During the past month the Greenback has rallied by almost 5% against a basket of 10 leading global currencies, as improved US growth prospects have brought closer the first official rate hike in more than a decade. 

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China returned from their week long new year celebrations while the dollar resumed its ascent on a combination of stronger US data and the soon-to-begin period of quantitative easing in Europe.

The Bloomberg Commodity Index traded sideways as stimulus speculation supported industrial metals, most noticeably copper, but against this we saw losses in energy (Natural gas and WTI crude oil) and softs (coffee and sugar).

The cost of crude oil on either side of the Atlantic continues to diverge with the spread between WTI crude and Brent crude reaching a 13-month high at around $12/barrel.

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