TOPIC 4 - Commodity markets

Question 1

Commodity market

Answer 1

A market place for buying, selling, and trading raw materials or primary products. EX. oil, food, gas, fertilizer

Question 2

Commodity market before 2008

Answer 2

Rising price of commodities since 2002 to 2008, this contributed to TGR

Question 3

Commodity market after 2008

Answer 3

After TGR reflects the intensity of the recoveryc of a resection, with ups and downs dependind on the expectations on the global growth

Question 4

Shock in oil/natural gasses at the beginning of this century

Answer 4

Demand factors:
- Strong global economic growth

Supply factors:
- Geopolitical problems
- Increasing costs
- resources being expensive to extract
- unbalance in supply and demand
- lack of investment

Question 5

Commodity market between 2011 to 2016

Answer 5

A downfall from 2011 (particularly in 2014) until 2016, when the commodity prices were stabilized on a moderate level

Question 6

Commodity market during covid

Answer 6

• Oil prices fell dramatically in the early stages.
• Metal prices declined modestly

Question 7

Commodity market today

Answer 7

Demand:
Has been rising in recent months as economies around the
world has started to reopen.

Supply:
Has declined due to:
- European domestic & US production has declined
- Russia is really the only discretionary source of supplies, but we do not want to trade as much with Russia due to the war
- During covid cut output and have since then been having trouble meeting recovering demand.

Question 8

Factors moving prices down (7)

Answer 8

• Use of renewables
• OPEC’s inability to keep the traditional policy
• High energy efficiency
• Environmental change
• High level of investment

Question 9

Factors moving prices up (4) today after covid

Answer 9

• Economic recovery
• Geopolitical problems
• Agreement between OPEC and several key non- OPEC producers
• Since Covid19 and Ucraina ́s war: problems in the global value chains.