Strong investor interest in commodities amid record prices provided some cushion to major US banks in the second quarter, but forecasts for commodities look uncertain in the next quarter and banks could see dwindling returns from the sector.

The same institutions that got some relief from commodities trading as the credit crisis ate into earnings last quarter could see less business in markets like oil, gold, copper and grains.

"We could see less money going into commodities from here," said Phil Flynn at Alaron Trading, a commodity futures brokerage in Chicago. "Now, there are people who do well on the short side of the market but everybody loves a bull market. A slowdown in commodities could certainly make it harder for banks to attract more investors into the sector," Flynn said.

Merrill Lynch, Wall Street's third-largest investment bank, said commodities was one of the few bright spots in an otherwise "difficult and disappointing" second quarter.

The company said revenue from commodities rose almost 60 per cent from a year ago during the three months through June, although this was more than offset by credit and mortgage-market losses that led to larger-than-expected losses.

Citigroup also said commodities were among the few positive elements in its second quarter. The company posted a smaller-than-expected loss for the period, citing "record revenues in interest rate and currency trading and commodities".

Analysts said most US banks with sizable trading interest in commodities – including Goldman Sachs and JPMorgan Chase – benefited from a surge of new money in raw materials markets this year. The estimated inflow of $30 billion (Dh110bn) to $50bn helped boost crude oil prices by more than 40 per cent since the end of last year and took markets such as gold, corn and soybeans to all-time peaks.

But the same high prices – which had attracted even more funds to commodities in recent months – were now driving away investors who felt such inflation was damaging the ability of consumers to afford basic necessities. "Consumers are being pinched between higher costs for necessities and lower wages. The end result is falling demand across the board," said Peter Beutel, President of Cameron Hanover, an oil trading advisory.

Data from the US Commodity Futures and Trading Commission has shown investors cutting their bullish exposure to oil and other key commodities since the first week of July. In some cases, investors have gone from a net long to a net short, or bearish, position. "Right now, we are starting to a see a low trading range of between $120 and $150," said Edward Meir, an analyst in New York.