The mean is mean for oil and iron ore

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Key points

  • Historical charts of major commodity prices show the recent increases were an anomaly.
  • For iron ore, current prices might be closer to long-term prices with only the larger producers to survive.
  • For oil, the historical trend indicates $US70/bbl is a more normal oil price.

 

Amid all the talk about falling crude oil and iron ore prices, investors need to stand back and take a much longer-term perspective. If they do so, they might avoid being too optimistic about world prices recovering back to recent elevated levels.

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