TORONTO, ON - May 28, 2014 /CNW/ - After a strong start to 2014, Scotiabank's Commodity Price Index fell by 3.2% month-over-month (m/m) in April, the second consecutive monthly decline. The All Items Index is currently 1.3% below a year earlier.

"In the first half of 2014, the improvement in oil prices for Western Canada's oil patch has been bolstered by a narrowing of the two price discounts which hurt earnings last year," said Patricia Mohr, Scotiabank's Vice President of Economics and Commodity Market Specialist. "Firstly, the Western Canadian Select (WCS) heavy crude oil discount off WTI oil declined to about US$21.57 per barrel (still high, but a US$4 improvement over a year ago). Secondly, the discount on WTI oil off Brent -- the international benchmark -- has also dropped to US$8 year-to-date (YTD). The net result, the S&P TSX Oil & Gas Exploration and Production Index has climbed by almost 16% YTD."

Other highlights in the report include:

• The Agricultural Index was the only sub-component to advance in April (+3.4% m/m). Cattle and hog prices climbed to record highs amid tight supplies, spelling increased prices at the grocery store for summer barbecues.
• Indonesia's ban on the export of all unprocessed nickel-containing ores will turn today's world supply and demand balance for nickel from surplus to deficit by early 2015. As a result, the nickel price forecast has been revised up to an average of US$8.30 per pound in 2014, US$10.75 in 2015 and US$12.50 in 2016.
• Palladium -- a long-standing pick for investors -- has strengthened markedly since late 2013. The global supply and demand balance is in deficit, with a Russian government stockpile now largely depleted. At the same time, a lengthy strike at platinum/palladium mines in South Africa has cut supplies. 

Read the full Scotiabank Commodity Price Index online at: http://www.scotiabank.com/ca/en/0,,3112,00.html.

Scotiabank provides clients with in-depth research into the factors shaping the outlook for Canada and the global economy, including macroeconomic developments, currency and capital market trends, commodity and industry performance, as well as monetary, fiscal and public policy issues.

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For more information please contact:
Patricia Mohr
Scotiabank Economics
(416) 866-4210
patricia.mohr@scotiabank.com

Devinder Lamsar
Scotiabank Media Communications
(416) 933-1171
devinder.lamsar@scotiabank.com