Worst of commodity crunch is over as oil price rebounds, Pimco says: "Oil may rise to a "baseline" of about $US60 a barrel in one year's time as the impact of supply cuts becomes more evident from early 2016, according to Sharenow. US crude output is down about 440,000 barrels a day from a four-decade high of 9.61 million barrels in June and the nation's drillers have sidelined more than half of the country's rigs in the last year.
Benchmark crude in London and New York tumbled to six-year lows in August and weaker prices are having a "significant impact on forward production growth," said Sharenow. Factor in natural decline rates and it means the oil market can re-balance supply and demand faster than other sectors like steel or aluminium, he said. West Texas Intermediate was at $US48.05 a barrel on Thursday while Brent was at $US51.71.
Platinum attractive
Gold prices are "broadly fair at the moment," said Johnson. "If real yields move lower or the Fed delays rate hikes beyond market expectations, we would expect gold to do well." The probability that the Federal Reserve will increase rates this year has dropped to 39 per cent, from 77 per cent at the end of August, according to futures data compiled by Bloomberg. Spot bullion has rebounded about 6 per cent after sliding to a five- year low in July and was at $US1144 an ounce.
Silver and platinum, which have declined on weaker industrial demand and slower emerging market growth, are both attractive at current prices and trading at multi-year lows relative to gold, Johnson said. Platinum this month touched the weakest in almost seven years, while silver fell in August to its lowest since 2009."
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