Crude Oil hit an eight-month high last Wednesday before reversing as investor sentiment waffled in the face of negative economic data from the US. Volatility in the energy markets defied predictions for a docile trading week cut short by US Independence Day, with Crude breaching US$73bbl during Asian trading before stumbling back below US$70. Weaker-than-forecast US consumer confidence data and the US$ rising against the Euro were seen by some as prompting the later falls, while others argued that the unusually high trading volumes overnight in Asia were evidence that large investment funds had been changing their Crude Oil positions for the end of the quarter, causing a temporary price rise. Nevertheless, Crude Oil registered its largest quarterly gain since 1990. Barclays Capital argued that the surge in energy, metals and agricultural products that has pushed the Reuters / Jefferies CRB commodities index up 25% since the start of March marked a “revolution” in how investors view the commodities cycle. “The usual relationships between commodities prices and the economic cycle [have] been redefined,” Barclays Capital said in its summer 2009 outlook.
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