The long-running commodity boom came to an abrupt end in the summer. Previously, prices had been vaulting from record to record in ever shorter intervals, in the end seeming to defy fundamental factors. Now our expectations have been confirmed and disillusionment has set in. Within the twinkle of an eye commodity prices slid on a broad front. Has speculation had the wind taken out of its sails? What were the triggers, how far can the correction go?

Last year’s escapades on the oil market, with prices peaking at USD 80 a barrel, appear to be past history. Since their August 2006 high, oil quotations have at times been as much as 35 % lower. At present, benchmark-grade Brent crude is still holding up within spitting distance of the USD 60 mark. What are the factors nourishing such volatility and what is the outlook?

Despite in part sizeable raw material resources, prices are set to remain high in the years ahead. This is especially true for the basic materials needed for steel production. As a result many small and medium-sized enterprises involved in metal processing and the manufacture of metal products are threatened with extinction despite brimming order books.

The price correction on the commodity markets we had been expecting has set in. From late-March to mid-May the Reuters/Commodity Research-Bureau-Index (CRB-Index) slipped by around 6 % and is now showing signs of stabilizing. Over the same period the oil price went its own way. What is moving the markets?

Since the 1970s the industrial countries have managed to almost halve their dependence on oil. However, the significance of the oil price for the business cycle is still high.