By Daily Crux Editor Justin Brill:
If you're long crude oil and copper, make sure you know where the exits are located...
Analysts are citing the weak economy and growing supply stockpiles as reasons commodity prices could go much lower from here. Indicators like the Baltic Dry index, a measure of raw-material demand, have plummeted in recent months, which hints at lower commodity prices.
Renowned energy analyst Philip Verleger says crude oil will fall below $40 by the end of the year. Companies like DuPont and Alcoa have said demand is not improving or even declining.
"We may have bottomed, as far as the recession is concerned, but there's no V-shaped recovery that people had been hoping for," said William O'Neill, a partner at Logic Advisors. He predicted the drop in copper prices last year, and he's become bearish again, saying "that market is clearly topped for the year."
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