The Challenge In Commodity Investment

The Challenge In Commodity Investment

When commodities are rising due to a weak dollar, and the long-term curve is not moving, it is not a good idea to express that move by investing in equities, at least not for the long-term.
Read: Oil’s Artificial Surge Could Lead To A New Crisis

A sudden upswing in crude futures could be enough to fast-track the energy market’s next crisis, one economist told CNBC on Thursday.

Oil prices soared to levels not seen since late 2014 on Thursday, following reports OPEC kingpin Saudi Arabia would be content to see crude prices rally as high as $100 a barrel over the coming months.

“Oil prices are high because the dollar is low,” Daniel Lacalle, chief economist at Tressis Gestion, told CNBC’s “Squawk Box Europe” Thursday.

 He went on to warn that “massive supply management” in the energy market was always likely to trigger an “artificial” upswing in oil prices. “That is a big concern … Because oil prices don’t generate crises; the abrupt and unexpected rise of oil prices creates crises,” Lacalle said.

About Daniel Lacalle

Daniel Lacalle (Madrid, 1967). PhD Economist and Fund Manager. Author of bestsellers "Life In The Financial Markets" and "The Energy World Is Flat" as well as "Escape From the Central Bank Trap". Daniel Lacalle (Madrid, 1967). PhD Economist and Fund Manager. Frequent collaborator with CNBC, Hedgeye, Wall Street Journal, El Español, A3 Media and 13TV. Holds the CIIA (Certified International Investment Analyst) and masters in Economic Investigation and IESE. Holds the CIIA (Certified International Investment Analyst) and masters in Economic Investigation and IESE.

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