Unusually, investors have been reducing their net-long position in the oil futures market, but increasing their position in industrial metals. We suspect this reflects optimism about China reopening at a time when the global economy is entering recession. But we think China faces a grim few months as infection rates surge and exports falter, which suggests metals demand will remain subdued for some time yet.
In view of the wider interest we are also sending this Commodities Update to clients of our Energy and Metals Services.
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