Commodities are in a long-term  trend of solid demand growth, and a recent sell-off in natural resources markets is likely to prove a technical downswing, Investec fund manager George Cheveley said.

 "I believe in the long-term story," said Cheveley, who co-manages Investec's 326.5 million pound ($531 million) Enhanced Natural Resources Fund, a broad commodities resource equity fund.   

"I look at the long-term fundamentals in China, south east Asia and other BRIC countries, and I look at the need for infrastructure repair in the western world and new infrastructure to deal with climate change."    

Cheveley keeps his sights firmly on the longer term in times of volatility, but he did pause briefly when commodity investors stampeded out of markets two weeks ago as worries mounted that global economic growth was slowing.   

"I think what is slightly more worrying about this one is that it's not quite so clear what the cause was," he said. But he adds: "What we have to decide is -- 'Is this one of those technical downswings or is this something more major?' -- and odds would say it's the former."    

One reason cited in the most recent sell-off was the general concerns about efforts in China, the world's biggest commodities consumer, to slow growth and fight inflation.   

"I think the market had been expecting (China's) tightening of the first half of the year to stop and possibly start loosening quite soon. The market is now thinking that it might go longer than they thought," Cheveley said.  

"But I still can't get too bearish on the macro side if all we're worrying about in China is inflation, because it's all a function of growth and I can't see how that is bad for commodities."         

He believes that oil prices at current levels are sustainable and that European oil companies including France's Total and Norway's Statoil offer good value.

"We feel the European oil companies have been slightly unloved over the past year, because people have been worried about Europe in general and have sold European indices which include big oil companies," he said.

"But their earnings are not related to European sovereign debt. They're dollar earners generally, and they're paying high dividends. They have performed well this year, and we think there is further upside with the oil price where it is now."    

Oil rebounded more than $1 on Wednesday, pushing Brent crude over $110 a barrel after two straight sessions of declines. - Reuters