After the collapse in commodity prices during the second half of 2008 some commodity prices moved higher over the last two weeks. Crude Oil has taken the limelight, rising from a year low of US$34 bbl to just below US$50 and traced back to the mid US$30’s bbl. But commodities like nickel and wheat have also jumped, and prices have in general been moving higher in line with improved risk appetite in financial markets. Prices tend to be extra volatile around Christmas and into the New Year due to thin liquidity. Looking at 2009 it appears that commodities have in moved into a consolidation phase and that prices will end the year higher. The combination of production cut backs, lack of investment and improved economic growth during 2009 should lift sentiment, and improve the demand and supply balances going forward
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