Financial Professionals

Market Insights

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COMMODITIES

03/17/2010

Tuesday's FOMC statement did little to stall the bullish momentum the Commodities space has exhibited during the month of March.

In addition, the continued shift in the shape of the futures curve supports improving fundamentals. The short dated contracts are rising faster than the long dated contracts. Eliminating the steep contango that has persisted in the Commodities space for many years. In fact, backwardation, when the short dated contracts are priced at a premium to longer dated contracts, may become the buzz word.

Chinese Oil Demand is now north of 1 million barrels per day (mbd) higher than one year ago.

US total energy demand is averaging 19.5 mbd, well above the January 2010 consensus forecast of 19.1.

Copper imports to China are up double digits month on month this year, consensus for Q1 was for flat heading into 2010.

The combination of overtly generous global monetary policy, China's incredibly resurgent demand, as well as inadequate non-OECD supplies, supports further upside and investors maintaining an overweight commodities exposure.

Virtus Investment Partners provides this communication as a matter of general information. The opinions stated herein are those of the author and not necessarily the opinions of Virtus, its affiliates or its subadvisers. Portfolio managers at Virtus make investment decisions in accordance with specific client guidelines and restrictions. As a result, client accounts may differ in strategy and composition from the information presented herein. Any facts and statistics quoted are from sources believed to be reliable, but they may be incomplete or condensed and we do not guarantee their accuracy. This communication is not an offer or solicitation to purchase or sell any security, and it is not a research report. Individuals should consult with a qualified financial professional before making any investment decisions.