With the slump in crude prices set to persist thanks to a combination of geopolitical wrangling [6], supply, and an impending lack of storage [7], oil producers are feeling the squeeze. More broadly, commodities have been weak across the board and to let Goldman tell it, history suggests a rebound could be a long way out. The following graphics illustrate commodity dependency by country.
Here’s who depends on oil....
[8]
...and on metals…
[9]
...and on commodities more generally…
[10]
...and slumping prices…
[11]
...may persist for quite some time…
[12]
[13]
Via Goldman:
For oil we believe that fundamental adjustment still has some way to go. In the short-term, we expect US inventories will continue to build at a rapid pace and OECD inventories to also start to build over the coming months. Later in 2015H2 we expect this trend to gradually reverse as the market reaches a new normal. For copper, we are more bearish and expect that visible inventories will continue to grow, weighing on prices over 2015-16. On net, our forecasts point to negative total returns for S&P GSCI for the next six months, before prices start to recover and roll yields.
* * *
Maps: For interactive versions from The Economist click here [14].
