13 April 2011 | Lindsay Clark
Investment bank GoldmanSachs
has advised its clients to sell on a group of commodities including oil and
copper, having accrued a 25 per cent gain since December.
The move is being interpreted as a signal that rising oil
prices may be on the wane. The rising cost of fuel has created a massive
increase in input price inflation for many buyers. For example, manufacturers’
input costs for March were 3.7 per cent higher than in February and have leapt
by 14.6 per cent when compared to a year earlier, according to the Office for National Statistics.
A report by Goldman Sachs said there were early signs of oil
demand easing in the US which, along with record speculative length in the oil
market, elections in Nigeria and a potential cease-fire in Libya were “leaving
price risk more neutral at current levels”.
Copper prices, which have also seen strong rises, could also
ease as a result of lower demand “as high prices and tight credit motivate
tight inventory management from China”, the report said.
Since the beginning of the year a range of commodities
including coal and oil have seen high prices because of interruptions to
production caused by unrest in the Middle East and floods in Australia.