Fallout from Hurricane Katrina and Hurricane Rita in the critical U.S. Gulf region rattled already-tight commodity markets in September, leading to yet another new monthly record for the BMO Financial Group Commodity Price Index.
The index gained 6.4% in the month, reaching 210.2.
“In particular, fears of major damage to U.S. oil and gas production infrastructure further pumped energy prices to sky-high levels,” said Earl Sweet, assistant chief economist, BMO Financial Group, in a release.
Sweet noted that both supply- and demand-side adjustments appear to have alleviated the worst of the market’s concerns, allowing oil prices to ease from their early-September peak. “However, extensive rebuilding work is expected to have a longer lasting impact on wood product prices,” he said.
The oil and gas index jumped sharply in September, sustaining a very steep increase that had seen the index rise almost 50% since May. The latest rise entirely reflected an outsized increase for natural gas, as the monthly price of oil was essentially unchanged in September.
Mixed performances during the month left the metals and minerals index flat in September. A weak U.S. dollar and inflation worries supported gold, while copper, zinc and lead were buoyed by supply concerns due to industrial actions and continued low inventories.
The hurricanes reignited wood product prices in September, which had been a main force behind the forest products index slide over the past seven months.
The agricultural index suffered a broad-based decline in September, with all commodities in the index retreating during the month.