Surplus sparks commodity exodus

Rising supplies create bear markets over past year as drillers unlock more oil, natural gas

Investors are bailing out of commodity funds at the fastest pace on record, and the exodus shows no signs of ending.

US exchange-traded funds linked to broad baskets of raw materials saw a net outflow of $1.23 billion over the first three months of the year, the most of any quarter since the securities were created in 2006, data compiled by Bloomberg show. Bank of America Corp says ample supplies have unleashed price wars, and Goldman Sachs Group Inc predicts a 20 percent drop for commodities already near a 13-year low. Morgan Stanley and Societe Generale SA also have cut forecasts for a whole range of items.