Crude Profit Program Description

Commodity market analysis by Crude Profit, has outperformed debt and stock markets in attracting investors since the beginning of this year. Average gains account for nearly 12% in commodities which is many-fold higher than 6% in debts and 2% in stocks. Commodity gains have increased by about 20% during this year due to growing prices of oil, gold, zinc and soybeans.

The surge of commodity prices can be explained by a number of reasons. Firstly, the shale oil boom, which has been suppressing global oil prices for years, seems to come to an end after a 10% decrease in shale oil production announced by the industrial leaders (Continental Resources Inc., Devon Energy Corp. and Marathon Oil Corp.) earlier this year.

Secondly, natural disasters in different regions of the globe also contributed to a sharp growth in some commodity prices. Floods in Argentina and draught in Brazil have boosted soybean and maize futures at the largest commodity trading locations.

Thirdly, zinc production is expected to fall by 6% in China during this year, which is caused by the decision of Glencore to decrease delivery of this metal by about 30%. This, in its turn, made the quotes of this fourth most used metal to rise by more than 20% since the beginning of this year.

Investors have been demostrating growing interest to commodity markets during 2016. During the past 5 months they invested over $60 bln in commodity markets, while hedge fonds attracted more than $1 bln. However, some large investors interviewed by Crude Profit last week, remain highly sceptical about the ongoing rise of commodity markets in future. They believe that a short-term growth cannot lead to fundamental changes in markets because commodities are not long-term assets and thus have too different demand and supply pattern, which makes long-term investments too risky at this point.