Tag Archives: OPEC
S&P GSCI Enjoys Strong First Half Performance
The S&P GSCI rose 31.4% in the first half of 2021, outperforming the S&P 500®, which rose 15.2%. The S&P GSCI has more than doubled since hitting an all-time low during the initial stages of the COVID-19 pandemic in April 2020. Several commodities have reached new all-time highs this year, as the global economy has…
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High Levels of Dispersion across the Commodities Complex in May
At the headline level, it was a rather subdued month for commodities. The S&P GSCI gained 2.5%, taking YTD performance to 26.0%. While the S&P GSCI’s upward momentum attenuated, high dispersion in the performance of single commodities continued, albeit with reversals among the leaders and laggards. Most of the grains sagged to the bottom of…
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Commodities Burst Higher in April
Several commodities made new all-time highs, as the global economy reflated, consumer confidence hit pre-pandemic highs, and housing prices in the U.S. jumped the most in 15 years. The S&P GSCI continued to perform well, rising 8.2% for the month to start the second quarter, following a strong 13.5% in the first quarter. Most commodities…
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A Quiet End to a Strong Quarter for Commodities
The S&P GSCI will commemorate its 30th anniversary in April 2021 following one of the better quarterly performances in its history. Despite giving up some of its recent gains in March, the S&P GSCI rose 13.5% in Q1 2021. A robust, if uneven, post-pandemic recovery in economic activity, ongoing supply dislocations, and the global push…
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Unlikely Tariff Rollback Deflated Commodities in November
The broad commodities were tepid in November. The S&P GSCI was flat for the month and up 9.9% YTD. The Dow Jones Commodity Index (DJCI) was down 2.1% in November and up 4.5% YTD. Gains were driven by the energy complex, while both precious metals and industrial metals detracted from headline performance. The S&P GSCI…
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Commodities Markets Can Provide Valuable Insights into the State of the Global Economy
Notwithstanding the recent correction associated with renewed trade tensions between the U.S. and China, a strong start to the year for global equity and commodities markets suggests a strong macroeconomic backdrop and a high risk appetite among investors. However, when drilling down into the performance of individual commodities sectors, it is clear that the situation…
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OPEC’s Cuts Are Shrinking Trading Opportunities
The unintended consequences of OPEC’s policy (in summer of 2014) of flooding the market with oil to lower prices and gain market share are starting to show. It seems they failed to realize increasing the price by cutting back supply wouldn’t work with high U.S. inventories. The spare capacity of OPEC does not matter for…
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Why Cutting OPEC Supply From Highest to Higher Still Hurts
After OPEC agreed to an oil output cut in Algiers on Sep. 29, they increased supply by 230 kb/d to a record 33.83 mb/d in October according to the International Energy Agency (IEA). Supply from Iraq reached the highest level ever and Iran pushed flows to a pre-sanctions rate of 3.72 mb/d. Now OPEC supply has…
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Crude Reality of Enhanced and Excess Returns
(“Excess Return” does not mean any additional return on the ETF’ s performance) is a footnote in an ETF provider’s investment objective about an ETF that tracks the S&P GSCI Crude Oil Excess Return. That disclaimer is true but never explains what excess return means in terms of additional performance. After all, excess means more, and…
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Oil Gains This Big Only Happen Around Bottoms
The S&P GSCI (WTI) Crude Oil posted a 3-day gain of 14.4% ending Feb. 17, 2016. This is the biggest 3-day gain in about 6 months for the index, and gains of this magnitude have only happened near oil bottoms. After the index hit its lowest since Nov 4, 2003, on Jan. 20, 2016, it capitulated,…
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