End of bubble sees commodity prices tumble: analysts

Sri Lanka's Prime Minister Ranil Wickremesinghe arrives with flowers to receive blessings at the Gangaramaya Buddhist Temple, Colombo, Sri Lanka on Wednesday 4 April 2018. On wednesday (4), Wickremesinghe survived a no-confidence motion in the Sri Lankan parliament with a 46 vote majority after a 12-hour debate with 122 MPs voted in his support while 76 MPs voting to remove the prime minister. (Photo by Tharaka Basnayaka/NurPhoto via Getty Images)

PARIS, September 5, 2008 (AFP) – Sharp falls in commodity prices and a rise in the dollar mark the ending of one of the biggest ever speculative bubbles and a change in investor sentiment as the global economy slows, analysts say.

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The US economy, the world’s largest, was already running out of steam when it was badly hit last year by the subprime or high-risk home loan crisis which sparked a credit crunch, crippling business and activity overall.

Many investors believed that the crisis would be confined to the United States on the view that Japan and the eurozone, alongside emerging giants China and India, would take up any slack.

Instead, global growth has been slowing and with it demand for oil and other commodities which had been a virtual one-way bet for several years as prices soared.

Oil topped a record 147 dollars on July 11 — but this week it fell as low as 104 dollars and looks set to test support at 100 dollars, a level it broke through at the beginning of the year.

The crisis in Georgia and Hurrican Gustav did no more than give oil a very modest boost when two months ago