TORONTO, ON–(Marketwired – February 23, 2015) – Scotiabank’s Commodity Price Index plunged again in January, -8.6% month-over-month (m/m) or -27.9% year-over-year (yr/yr), dropping below the April-2009 low during the ‘Great Recession.’ Commodity prices are now at levels last seen in January 2007.
“While global economic conditions are better than in 2009, an extended period of sub-par world GDP growth has triggered intensely competitive global markets, taking the steam out of commodity prices,” said Patricia Mohr, Vice President of Economics and Commodity Market Specialist at Scotiabank. “A fight for market share is currently underway in oil and iron ore. The recent spike in the U.S. dollar trade-weighted has also been deflationary, with some commodity prices actually dragged lower in dollar terms.
“On a more positive note for Canada’s oil sector, West Texas Intermediate (WTI) and Brent oil prices have rallied back to more than US$50 and US$60 respectively in mid-February. The rally reflects a sharp drop in U.S. oil-targeted drilling (-28.5% yr/yr as of February 20) combined with an expected 30% plunge in global exploration and project spending in 2015. These developments will slow output growth and restore balance in world oil markets in the second half of 2015. The net result, WTI oil prices should average US$55-60 in 2015 and US$65-70 in 2016.”
Another highlight from the report includes:
Read the full Scotiabank Commodity Price Index online at: http://www.scotiabank.com/ca/en/0,,3112,00.html.
Scotiabank provides clients with in-depth research into the factors shaping the outlook for Canada and the global economy, including macroeconomic developments, currency and capital market trends, commodity and industry performance, as well as monetary, fiscal and public policy issues.
Scotiabank is a leading financial services provider in over 55 countries and Canada’s most international bank. Through our team of more than 86,000 employees, Scotiabank and its affiliates offer a broad range of products and services, including personal and commercial banking, wealth management, corporate and investment banking to over 21 million customers. With assets of $806 billion (as at October 31, 2014), Scotiabank trades on the Toronto (TSX: BNS) and New York Exchanges (NYSE: BNS). Scotiabank distributes the Bank’s media releases using Marketwired. For more information please visit www.scotiabank.com.
[expand title=”Advisories & Contact”]
For more information please contact:
Patricia Mohr
Scotiabank Economics
(416) 866-4210
patricia.mohr@scotiabank.com
Devinder Lamsar
Scotiabank Public & Corporate Affairs
(416) 933-1171
devinder.lamsar@scotiabank.com
[/expand]