Commodities decreased in January, largely driven by fundamental factors, according to Credit Suisse Asset Management.

The Bloomberg Commodity Index Total Return performance was negative for the month, though with mixed performance among individual constituents. 11 out of 22 Index constituents yielded losses.

Credit Suisse Asset Management observed the following:

• Energy was the worst performing sector, down 7.31%. Gasoline declined the most amid increasing inventories in the U.S. even as refineries, which had been operating well above normal levels, entered turnaround season. Crude oil and petroleum products continued their sharp decline due to excess global inventories, which were further exacerbated by the return of Iranian exports after sanctions were eased.

• Industrial Metals declined 1.39%, led lower by Copper, due to decreased demand expectations after China's producer inflation data came in below expectations, and manufacturing data continued to indicate contraction.

• Agriculture decreased slightly, down 0.81%. Sugar declined the most as forecasts for rain in Brazil's key producing regions improved the outlook for growing conditions toward the end of the month. Coffee was also lower on increased production estimates from Vietnam, Indonesia and Colombia.

• Livestock gained 1.34% for the month, led by Lean Hogs as the U.S. Department of Agriculture reported increases in pork exports out of the U.S. throughout the month.

• Precious Metals was the best performing sector, up 4.76%, Demand for safe haven assets increased amid volatility among financial markets, continued unease over China's economy and increased expectations for easier monetary policies from multiple major central banks.

Nelson Louie, Global Head of Commodities for Credit Suisse Asset Management, said: "The year got off to a volatile start, as continued growth concerns drove U.S. government bond yields and stocks sharply lower. Although these concerns also weighed on commodities, the asset class rallied during the second half of the month, largely driven by crude oil and petroleum products. While sanctions against Iran eased, allowing for oil exports, it may take time for Iranian production to ramp up significantly. Meanwhile, there were signs that the over-supply situation in oil may begin to reverse. Pressure on oil producers intensified as prices continued to decline, leading some companies to issue debt or equity, cut dividends and/or capital expenditures. Supply may need to be cut further if prices remain low." 

Christopher Burton, Senior Portfolio Manager for the Credit Suisse Total Commodity Return Strategy, added, "Commodity returns may continue to be impacted by announcements from central banks if stagnant growth and market turmoil persist, undermining the effectiveness of their policies so far. In January, the European Central Bank hinted at further stimulus measures, while the Bank of Japan unexpectedly introduced negative interest rates. Within the U.S., a decline in consumer prices for December decreased future inflation expectations. The U.S. Federal Reserve remains likely to pursue an even slower course of monetary tightening. The market has already rapidly reduced its expectations for further interest rate increases throughout 2016. Continued loose monetary policy expectations for major central banks may lead to inflation risk, should economic growth exceed expectations."