Will oil continue to outperform?

Many of the usual relationships between oil and other commodity prices have broken down in the past year, with the cost of crude rising to its highest level since 2008 while the prices of key industrial metals and agriculturals are typically some 15-20% lower than 12 months ago. Given the high weight on oil in the leading commodity indices, the strength of oil prices has flattered the performance of commodities as a whole. But we do not expect oil to remain an outlier for much longer as the demand for crude falters and the Iran risk premium fades.