Commodities just had their worst start in seven years. The S&P GSCI Total Return lost 10.2 percent year-to-date (YTD) ending June 30, 2017, logging its worst first- half performance since the first six months of 2010 when it lost 11.2 percent.

However, it is not the bloodbath it may seem to be. Half, or 12 of the 24 commodities in the index, and three of five sectors were positive YTD through June 2017. The best and worst single performers came from the same sector, agriculture. Wheat was the winner, gaining 18.3 percent, while sugar was the biggest loser, down 29.9 percent, contributing to an overall sector return of –2.2 percent. Although in the first half of 2017, the needle fell just short for agriculture, livestock gained 12.5 percent, industrial metals were up 8.1 percent and precious metals were solidly positive, 6.9 percent.

On the other hand, the driver of the poor index performance thus far in 2017 stems from the relatively heavy weight in the energy sector. The S&P GSCI Energy Total Return lost 18.8 percent through June 2017, its worst start in a year since 1998 — almost two decades ago.

Each single commodity inside the energy sector did not just lose in the first half of 2017, but lost double digits. This is only the second time all six energy commodities lost in the first half of a year. (2010 was the first time. Also, in 1990, 1991 and 1997, before Brent crude and gasoil were included in the index, all the singles were negative in the year’s first half.) Moreover, in the first half of 2017, two of the six energy singles lost more than 20 percent, the mark that typically denotes a bear market. This is the fourth time since 1984 that two or more energy singles were down more than 20 percent in the first half of a year, with other occurrences in 1990, 1997 and 1998.

The negative returns in first-half 2017 of the commodities in the energy sector are worth noting individually because without them commodities were positive in the first half: Brent crude –17.4 percent, (WTI) crude oil –18.8 percent, gasoil –15.8 percent, heating oil –16.5 percent, natural gas –26.4 percent and unleaded gasoline –22.3 percent. The S&P GSCI Non Energy Total Return gained 4.1 percent in first half 2017, outperforming the S&P GSCI Energy Total Return by 22.9 percent, the most in a first half in 27 years.

Jodie Gunzberg is managing director of product management at S&P Dow Jones Indices. This article was excerpted from the organization’s Indexology Blog. The full article with charts is at this URL: https://bit.ly/2uTUi6S