Commodity prices stabilise following two day rout

 
Billy Bambrough
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The oil price has hit a floor after two days of tumbling prices (Source: Getty)

The price of hard commodities plateaued yesterday, following a two day retreat that spooked investors and caused huge sell offs of oil and mining stocks.

The oil price also managed to stabilise, hovering just above the $40 mark for most of the day, despite dipping below the line briefly for the second day.

Oil did manage a brief recovery, with Brent crude clawing its way back above $41 a barrel.

The consensus among analysts however is that the supply glut will continue well into 2016 with oil prices unable to recover until global supplies decrease.

Copper and zinc were up 0.7 per cent, while aluminium climbed 0.6 per cent and nickel rose 0.5 per cent.

Metals ticked up due to better than expected data coming out of China, where the National Bureau of Statistics reported the consumer-price index rose 1.5 per cent in November from a year earlier, up as well from 1.3 per cent in October.

China is one of the world's largest consumer of raw metals, sucking up about 45 per cent of the global copper supply.

A slight weakening of the dollar also provided global commodities with some temporary relief.

Analysts have now forecast metals to be trading flat until the US Federal Reserve decision on whether to raise interest rates next Wednesday.

Falling demand for steel across China and other struggling emerging markets has been blamed for the price decline.

The country has been accused of driving down the price of steel after it cut export taxes on steel and iron products to quickly send the metals abroad.

Commodities are down almost across the board for the year however.

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