Bloomberg commodity index drops to sixteen year low

Bloomberg commodity index, dropped to its lowest level since 1999, as commodities around globe joined in the slump in energy prices, after oil producers' cartel OPEC scrapped the production ceiling. Oil led the drop on Monday, dropping around 6% for the day.

Bloomberg commodity index, was launched back in 1998 and comprises of 22 different commodities, under six broad categories - energy, grains, industrial metals, precious metals, softs and livestock. Energy has 31.8% weightage in the index, while two benchmark, Brent & WTI, with a combined weightage of 15%.

With commodities slump intensifying, and Dollar remaining strong across the board, index has lost 23% this year so far and more than 65% from its peak in 2008.

Monday, the index dropped 2.1% to 79.97, breaching the 80 mark for first time since 1999. Despite falling to such low levels, appetite for longs are pretty low as demand for China continues to fade.

Chart courtesy Financial Times.