As a masochistic journalist, I can't help but enjoy The Economist's put-down of interpretations surrounding the rise in the price of oil on Monday. Oil rose above $102 (U.S.) in early trading on Monday, though it retreated below that level in afternoon trading, and it appears that most newspapers pinned the rise on allied attacks in Libya.
Fair enough: More explosions increases the uncertainty about supplies from the region. But as The Economist rightly points out, oil isn't rising alone but as part of a commodities rebound. The Thom/Reuters Jefferies CRB index of 19 commodities was up 0.5 per cent in afternoon activity: Nickel, silver, cocoa and aluminum showed strong gains, along with more modest gains for corn, coffee, cotton and wheat.
In other words, commodities are hot - and hot commodities more than likely reflects renewed confidence in the global economic recovery. And the gains don't stop with commodities either: Global stocks were also higher on Monday, with triple-digit gains by the Dow Jones industrial average and the S&P/TSX composite index. Overseas, Germany's DAX index rose 2.3 per cent and the U.K.'s FTSE 100 rose 1.2 per cent.
One of the few things that is down is the CBOE Volatility index, or VIX, which usually suggests that the fears among investors are subsiding. The VIX sank 14.9 per cent, marking its third day down, and is back to levels last seen in early March, before the earthquake and tsunami struck Japan but after violence broke out in Libya.