Oil and gas prices continued to soar in February, driving the BMO Financial Group Commodity Price Index to its fastest monthly rate of growth since December 2000.

Overall, the composite index of nineteen commodities considered important to the Canadian economy surged 11.6% in February to 139.3 (1993 = 100) from 124.8 in January. BMO’s commodity index is now more than 40% higher than it was a year ago.

“Although the global economic expansion has been struggling to gain a foothold, external forces and industry supply management have kept commodity prices on an upward track,” said Earl Sweet, assistant chief economist, BMO Financial Group. “While geopolitical developments are likely to significantly heighten price volatility during the next few months, more positive economic fundamentals during the second half of the year should support stronger gains in metals and forest products,” he said.

A good portion of the overall increase in commodity prices during the past year emanates from the energy sector. Spurred by plunging inventories, the energy sub-index soared 21.7% in February to a level 2.3 times higher than a year earlier. The energy index is now at 259.3 (1993=100).

The Metals & Minerals Index rose at a reasonably brisk pace of 2.7% in February to a level almost 10% higher than a year earlier. This marked the sixth consecutive increase for metals. The metals index is at 110.9 (1993=100) for the month.

An improvement in market conditions for lumber and oriented strandboard generated the biggest rise (up 4.3%) in the Forest Products Index in almost two years. The sub index now stands at 90.2 (1993=100).

Led by higher wheat prices, the Agricultural Index rose 2.3% in February to 100.5 (1993=100), after four consecutive monthly declines. Corn and soybeans also contributed to the increase, although their price gains were more modest.