Primary concerns

Many primary commodity prices have fallen during the recession, but have recovered somewhat as the recession has bottomed out and hopes of a recovery have grown. So what will happen to commodity prices over the next few months and beyond, and what will determine the size of the price changes? The following linked articles look at these questions.

Commodity prices set to rise further, Roubini says Telegraph (3/8/09)
Have oil prices peaked for 2009? Hemscott (25/8/09)
What’s Ahead for Commodities BusinessWeek (23/8/09)
Gas Prices to Triple by Winter? (video) CNBC (25/8/09)

For commodity price data see:
Commodity Price Index Monthly Price Index Mundi


  1. What will determine the amount by which commodity prices rise (a) over the next twelve months; (b) the next three years?
  2. What will determine the size of any change in the Australian dollar from rising commodity prices?
  3. How does the holding of stocks affect (a) the size of commodity price changes; (b) the volatility of commodity price changes?
  4. Under what circumstances is speculation in commodity markets likely to (a) stabilise and (b) destabilise commodity prices?
  5. Explain why gas prices are likely to rise less than oil prices.