Commodities - Then and Now

The Federal Reserve has benefitted from a sustained drop in commodity prices over the past 2 decades – allowing them to keep interest rates low. This in large part was due to fracking which significantly increased the supply of oil and natural gas in the United States. With most Tier 1 wells having been drilled, the harder (and more costly) to drill Tier 2 wells may cause increased cost pressure on oil and gas. This could cause more pricing pressure on commodities in general over the next several years.