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Hansen: No let up in sight for commodity crunch

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Commodities have faced a torrid year and there’s no let up in sight warns Saxo’s Ole Hansen. There are 'critical weeks' ahead, he explains, with Thursday's European Central Bank meeting increasing the potential for dollar strength.

While the price of crude has been stabilising, Libya is looking to double its production. There is also the OPEC meeting next week which is causing uncertainty. But Hansen says there is a record short position in both WTI and Brent which is helping to slow down the negative move in the market.

Gold meanwhile is still being hit by concerns over December's Federal Open Market Committee meeting. 

Ole also says that copper had a bounce on Thursday as Chinese producers consider a cut in production. He explains why the market is concerned about the large amount of short selling in Chinese commodities at the moment.