Investors have poured over $50 billion (€45 billion) into commodities so far this year but Barclays still views the market as a “shaky one”.
Reasons cited by the bank for this pessimistic outlook include further monetary easing by the world’s central banks, which is unlikely to support global commodity demand or prices over the medium term.
However, the bank does view that the current decline in oil prices may boost demand from countries outside of the Organisation for Economic Co-operation and Development group of nations.
Furthermore, Barclays’ views that a weakening dollar and lower refined products prices are features of the current commodities downturn but should also spur emerging market oil demand over the next six months.
Barclays predicts that Brent oil prices should reach $45 a barrel by the third quarter, rising to $50 a barrel by Q4.
The bank is also fairly bullish on natural gas, it is looking at pipeline infrastructure supporting export volumes. Currently exports to Mexico have reached four billion cubic feet per day.
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