Swine Flu Could Push Oil Lower: Analyst

Swine flu could affect commodities prices, especially oil, as demand may shrink on fears of a further economic slump because of a worldwide epidemic, Eugen Weinberg, senior commodity analyst at Commerzbank, told CNBC.

"The fear of pandemic in Mexico could lead to lower production of oil . It's more about the indirect effect which has an impact on the whole commodities space," Weinberg told "Squawk Box Europe."

"People are afraid the green shoots of recovery might be really dampened," Weinberg added.

But if the outbreak turns out to be less dangerous than feared and concerns were overplayed, "the risk appetite might return to the market, and the dollar might weaken and equity markets might recover, which will also lead for a recovery in the commodities space," he said.

"I think commodities are about to stabilize at around these levels, especially oil, and in the third and fourth quarter I expect further recovery," he explained.

He is bearish on gold for the short term, because although imports to Dubai have increased, imports to India, the world's largest importer of gold, went down by almost 90 percent from last year.

Demand for jewellery is low and, "as long as the fear on the market is not there and demand from investors for the insurance against the market risk is not there, we'll probably see further market corrections," according to Weinberg.

He expects gold prices to drop to about $800 in the summer from the current level of about $894, but to recover to $900 or even $1,000 an ounce in the first quarter of next year.

At the same time, prices for base metals have reached a bottom, and copper is likely to end the year higher, Weinberg said.