Barclays Warns of a “Rush for the Exits” on Commodities

Commodities have had the strongest start to a year since 2011

by Rhiannon Bury

Analysts at Barclays have warned of a “rush for the exits” as investors back away from commodities, resulting in price levels for oil and copper dropping as much as 25pc.

A note issued by the bank said that although investors have been attracted to commodities as one of the best performing assets so far in 2016, returns are unlikely to be sustained in the second quarter of the year.

“This could make commodities vulnerable to a wave of investor liquidation that we estimate could, in a worst case scenario, knock as much as 20-25% from current price levels,” the note said.

This would take the price of oil back to the low $30s and copper to the low $4,000s, the analysts said.

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