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VRS - who has written 39433 posts on Opalesque Commodities Briefing.


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Global commodity AUM rebounds in Jan to $267 billion

Posted on 27 February 2015

Total global commodity assets under management ( AUM) rebounded to $267 billion in January from a five year low of $259 billion in December 2014, Barclays capital said on Thursday.

Commodities Bust Leaves Latin America with a Hangover

Posted on 27 February 2015

Five years ago spirits were soaring across Latin America. The region’s economies were bouncing back with startling speed from the global financial crisis to post their strongest growth rates in more than a decade. Robust Chinese demand for copper, iron ore, oil, soybeans and other commodities was filling government and private sector coffers and lifting millions of people into the ranks of the middle class.

Oil industry investment plunges after commodity price tumble

Posted on 27 February 2015

A sharp fall in oil prices has led to a decline in investment by the oil and gas industry, which statisticians believe reflects falling profitability in the sector. Investment in the oil and gas industry slumped in the final three months of last year, amid a dramatic collapse in the price of oil.

OPEC mulls emergency meeting amid low oil prices

Posted on 27 February 2015

Some OPEC members, concerned about the economic impact of low oil prices, say the cartel may have to call an emergency meeting sooner rather than later. But Saudi Arabia, the most influential member, is likely to veto such an idea.

IEA Sees Oil-Demand Boost Balancing Market in Echo of Saudi View

Posted on 27 February 2015

The oil market will rebalance in the next several months as a price collapse boosts consumption and curbs supplies, the International Energy Agency said, a day after Saudi Arabia’s oil minister told reporters demand is rising.

Opec sees market stabilising, okay with current price of $60

Posted on 27 February 2015

Oil prices have started to stabilise around current levels of $60 a barrel and demand is showing signs of improving in Asia and other regions, a senior Gulf Opec delegate said. The comments indicate that the core Gulf members of the Organisation of the Petroleum Exporting Countries (Opec) are showing no sign of wavering in their strategy to focus on market share rather than cutting output, despite concerns from other members about falling oil revenue.

Regulator plays down impact of rules shake-up on gas traders

Posted on 27 February 2015

Fewer than four natural gas traders hold positions big enough to breach broad new limits on speculation in the US, a regulator said in comments that played down the impact of a controversial rule proposal.

Analysts see gold price recovery ahead

Posted on 27 February 2015

Analysts are warming up, albeit cautiously, to gold after more than three years of falling prices that put the great majority of Canadian gold exploration companies in the deep freeze. CIBC World Markets senior economist Peter Buchanan is predicting an uptick this year to $1,300 US from $1,200 in 2014, and a modest gain to $1,325 in 2016.

What To Make Of Gold Prices In 2015

Posted on 27 February 2015

For much of the past decade, gold has been viewed as one of the most stable and predictable investments in existence. The price of gold was rising slowly but steadily, and crises in world politics and financial markets continually proved that the precious metal had value as a protective hedge.

China’s new Shanghai-Hong Kong gold link-up hope to rival Western competition

Posted on 27 February 2015

China is set to launch a link between gold markets in Shanghai and Hong Kong this year following a landmark stock connect scheme, aiming to enhance its pricing power of gold contracts and ultimately challenge its competitors in the West.

US ‘Probes Banks’ Precious Metals Rigging’

Posted on 27 February 2015

The United States is reportedly probing major banks over possible manipulation of precious metals markets. The investigation centres on prices for gold, silver, platinum and palladium, the Wall Street Journal says.

Platinum Dives to 5-Year Low

Posted on 27 February 2015

For more than a year, you must have heard hundreds of analysts arguing that investors were moving money into precious metals and that global economic uncertainty would push these metals higher. Well, that hasn’t happened.

Coffee ETFs Tumble, What’s Behind the Slump?

Posted on 27 February 2015

Coffee - a top-performing commodity in 2014 - returned a fabulous 50%. The winning streak continued into the New Year as drought conditions in Brazil - the primary driver of coffee’s incredible run-up last year - continued to play foul. Brazil is the world’s top coffee producer and supplies about one-third of the world’s coffee.

Hedge Fund Returns Falter, Yet Money Continues to Flow In

Posted on 27 February 2015

Another year, and another mediocre performance by hedge funds, to put it kindly. The Barclay Hedge Fund Index gained a meager 2.89 percent in 2014, while the Standard & Poor’s 500-stock index gained over 13 percent and the Barclays United States Aggregate Bond Index rose over 5 percent.

Noble overstated commodity values by at least US$3.8 bln: Iceberg Research

Posted on 27 February 2015

Singapore-listed Noble Group overstated the value of commodities it holds by at least US$3.8 billion, Iceberg Research said in a report on the Asian commodity trading firm’s accounting practices. “Impairing these fair values dramatically impacts Noble’s performance indicators,” the little-known research firm said on its website on Wednesday, its second report this month raising questions about Noble’s books.

Ecuador launches new digital currency – but most residents know little about it

Posted on 27 February 2015

Bill passed last July gives Central Bank authority to create digital dollars, but opinions divided along party lines amid concerns of a presidential power grab. The new system, which is officially set to launch on Thursday, will work much like mobile phone bank payments in other countries: users will be able to exchange hard cash for digital money which is stored in an electronic wallet on their phones.

Ukraine Dials Back on Latest Attempt to Halt Currency Free Fall

Posted on 27 February 2015

Ukraine’s central bank abruptly reversed a broad ban on foreign-currency purchases Thursday, a day after imposing the measures in an attempt to halt the hryvnia’s free fall. Prime Minister Arseniy Yatsenyuk had criticized the earlier decision as bad for Ukraine’s economy, which is staggering after nearly a year of fighting with Russia-backed separatists in the east of the country.

Poland not keen on quick rescue of emissions trading scheme

Posted on 27 February 2015

A simmering disagrement between member states about when to start a market stability reserve for the bloc’s struggling emissions trading system has been taken up a political notch by Poland. Polish PM Ewa Kopacz has written to European commission president Jean-Claude Juncker asking that the market intervention mechanism only kick into place in 2021.
The letter, signed Wednesday 25 February, came the day after MEPs in the environment committee agreed the scheme should go into place two years earlier………………………………………..Full Article: Source

EU court rules against Czech tax on carbon permits

Posted on 27 February 2015

A Czech tax imposed in 2011 and 2012 on carbon emission allowances granted to companies for free breached a European Union directive, the European Union’s Court of Justice ruled on Thursday.

Cap-And-Trade Costs California Businesses $1 billion

Posted on 27 February 2015

California businesses paid a whopping $1 billion this year buying permits to comply with the state’s cap-and-trade law — the largest sale recorded since the state began regulating carbon dioxide in 2012.

Commodities slump to deliver $110bn hit to export earnings: ANZ

Posted on 26 February 2015

The aggressive slump in Australia’s key commodities will wipe $110 billion off export earnings over the next three years, new analysis has found. ANZ’s major project update for 2015, which includes developments requiring at least $100 million of investment, also anticipates that aggregate major projects spending on mining, energy and infrastructure projects would fall to about $32bn in 2017 from $88bn last year.

Yellen: Fed to Issue Bank Commodity Rules This Year

Posted on 26 February 2015

Federal Reserve Chairwoman Janet Yellen said Wednesday that the Fed plans to propose new rules this year relating to banks’ activities in physical- commodity markets, such as aluminum and oil.

How Do Commodity Suppliers Go Sustainable?

Posted on 26 February 2015

Social and environmental responsibilities are rarely at the top of mind when suppliers are racing to the bottom of the price curve. That’s why sustainability is hard to come by in commodity industries. But a small giant in New Zealand is changing all that, at least when it comes to wool.

Why Oil Will Fall To $40 As Obama Looks The Other Way

Posted on 26 February 2015

On August 20, 2014 I warned Forbes.com readers that oil prices were going to drop a lot. (See article; the price of WTI was $104/barrel at the time). I’ve rarely felt more conspicuous about a prediction and I’m in the business of making predictions. Now what? Prices have collapsed–or I should say: the bubble has popped. What happens next?

Nigeria Proposes Cutting Oil Price Benchmark to $52 a Barrel

Posted on 26 February 2015

Nigeria’s Senate and executive proposed cutting this year’s budgeted oil price benchmark to $52 per barrel from $65 suggested in December, as falling prices erode the income of Africa’s biggest crude producer.

Oil Price Crash: Top 5 At-Risk Countries

Posted on 26 February 2015

Since June 2014, global oil prices have dropped by more than 50%. The drop could strongly affect the economic and political stability of these five oil exporting countries. Oil prices make winners and losers. In general, oil importers will gain from low prices, while most oil exporters will suffer. Still, there are differences. While the United States, Norway, and the Gulf States can protect themselves with diversified economies and high hard currency reserves, the oil shock could bring some countries to the verge of economic default and political crisis.

Oil Demand Seen as Growing

Posted on 26 February 2015

Demand for crude oil is growing, Saudi Arabia’s top oil official said Wednesday, amid new data showing the world is getting hungry again for petroleum products and potentially bolstering OPEC’s decision to maintain production in the face of a price collapse.

The end of OPEC

Posted on 26 February 2015

At first, people thought that OPEC was purposefully keeping prices low (by not reducing supply) in order to smother the emerging shale industry in the crib. With low oil prices, less investment would flow to alternatives to conventional oil, which can be expensive. But, as Bloomberg reports, that might not be the answer. The answer increasingly seems to be that OPEC isn’t raising prices because it can’t raise prices.

Gold trade coming back, if you can wait 2 years: BofA

Posted on 26 February 2015

Gold will come under further pressure over the course of the year as the Federal Reserve moves closer to lifting rates, but prospects for the precious metal looks far more promising in the next few years, according to Bank of America Merrill Lynch.

Can platinum regain its premium over gold in Q2-Q3?

Posted on 26 February 2015

On the positive side, precious metals consultancy, Metals Focus, in its latest Precious Metals Weekly, reckons that there’s a good chance that platinum will regain its premium over gold, perhaps as soon as in Q2 this year and possibly get back to a premium level during the year averaging as much as $100 over the gold price (which is pretty much the normal situation).

Will a dry spell in Chile curb a global oversupply of copper?

Posted on 26 February 2015

A raging seven-year drought affecting copper-rich Chile is making miners grow anxious as the dry spell is now affecting the supply of power necessary to sustain their operations, responsible for around a third of global copper output. Companies such as BHP Billiton and Anglo American have recently highlighted the impact of the country’s extreme conditions in their latest financial reports.

Copper Signal May Be Flashing Green

Posted on 26 February 2015

Copper has been down for so long that some are saying the only way is up. A key signal in the market is starting to flash green, with bets that copper prices will continue to fall recently hitting a record high on the London Metal Exchange, though they’ve since started to fall back. For some, that suggests the red metal’s fortunes may be about to turn. At these levels, there’s simply no more stomach to bet against copper, they say.

The Various Costs of Trading ETFs

Posted on 26 February 2015

Investors can access exchange traded funds on a normal brokerage account throughout the day.

3 big surprises in ETF flows so far in 2015

Posted on 26 February 2015

With February almost over, we revisit where U.S.-listed exchange-traded fund money flows are pointing. At the beginning of the year, the answer was “nowhere.” Things have since picked up a lot. One-month flows into ETFs now stand at over $30.7 billion, putting year-to-date inflows at $23.9 billion.

How to Use Commodity Futures to Hedge

Posted on 26 February 2015

Futures are the most popular asset class used for hedging. Strictly speaking, investment risk can never be completely eliminated, but its impacts can be mitigated or passed on. (Related: A Beginner’s Guide to Hedging) Hedging through future agreements between two parties has been in existence for decades.

Currency Manipulation: Why Something Must Be Done

Posted on 26 February 2015

Currency manipulation occurs when countries sell their own currencies in the foreign exchange markets, usually against dollars, to keep their exchange rates weak and the dollar strong. These countries thereby subsidize their exports and raise the price of their imports, sometimes by as much as 30-40%.

Bitcoin revolution could be the next internet, says Bank of England

Posted on 26 February 2015

The Bank of England has unveiled analysis of cryptocurrencies like Bitcoin that suggests electronic money could cause a tectonic shift in the payments industry. The arrival of electronic currencies could revolutionise the way Britons pay for goods and services, in much the same way as the internet shook up how we access information, the Bank of England has said.

California carbon permits fetch $12.21 a tonne at auction

Posted on 26 February 2015

California said on Wednesday that carbon allowances fetched $12.21 a tonne at the cap-and-trade program’s first auction of the year, a rate below market expectations even though all of the permits offered were sold.

MEPs call for emissions trading reform to start in 2019

Posted on 26 February 2015

The environment committee of the European Parliament on Tuesday (24 February) voted to introduce a market mechanism for the EU’s struggling emissions trading system at the end of 2018. The date was the subject of much wrangling among MEPs and national governments with European Commission having originally proposed 2021.

ETS ‘back on track’ thanks to market stability reserve

Posted on 26 February 2015

Parliament has requested that the measure be implemented by December 2018 at the latest. The emissions trading system (ETS) allows businesses to purchase CO2 emission allowances. Unfortunately, too many allowances have been made available on the market. As a result, their price has dropped dramatically in recent years. They currently cost €7 to €8 per tonne, whereas it was originally hoped they could be sold for €30 per tonne.

Commodity crash reflects global economic slump

Posted on 25 February 2015

Global commodity prices have tumbled to levels below the depths of the Great Recession, underscoring the widespread difficulties facing the global economy. While crude oil’s price collapse has been in the spotlight, a wide range of other commodities are suffering as well, including natural gas, coal, iron ore, copper, grain and pulp and paper.

Investors in Commodity-Related Companies Need To Be Aware Of This Risk

Posted on 25 February 2015

The business of producing or trading in commodities have always been volatile. The fact that no player in the market has the ability to control the pricing of the underlying commodity they’re involved with makes it extremely challenging for any commodity-related business.

Why a small dip in the oil price matters an awful lot

Posted on 25 February 2015

After a mini rally, oil prices are falling again. From $62 a barrel 10 days ago, Brent crude has slipped to $58.43 on Tuesday. It may not seem like much of a cut after the collapse in world oil prices that sent Brent tumbling from $115 to $45 a barrel between last June and January, but it is still significant.

Is there a Logical Oil Price?

Posted on 25 February 2015

If you have been following the price of oil over the last few months, the chances are you are a little confused. On the one hand, you have the likes of A. Gary Shilling who, in this Bloomberg article, loudly trumpets the prospect of oil at $10/Barrel, and on the other, there is T. Boone Pickens, who, at the end of last year was predicting a return to $100 within 12-18 months.

Oil market is stabilising, $60 is OK for now - Gulf OPEC delegate

Posted on 25 February 2015

Oil prices have started to stabilise around current levels of $60 a barrel and demand is showing signs of improving in Asia and other regions, a senior Gulf OPEC delegate said on Tuesday.

Oil back below $50 as OPEC hopes fade

Posted on 25 February 2015

Any hopes of a sustained rally in the price of oil disappeared Tuesday morning as doubts were raised over an anticipated cut in production from the Organization of the Petroleum Exporting Countries (OPEC). The oil cartel is not due to meet until June this year but a report by the Financial Times - with comments by Diezani Alison-Madueke, the Nigerian oil minister - suggested that an emergency meeting was due in the near term.

Gold and silver prices: The next bank rigging scandal?

Posted on 25 February 2015

US authorities open investigations into banks including HSBC and Barclays over possible rigging of precious metals benchmarks. The world’s biggest banks are still reeling from the consequences of the Libor and foreign exchange scandals, but US authorities are now investigating the possibility of more rigging.

Hedge funds raise bearish gold price bets by 44%

Posted on 25 February 2015

Large scale speculators in gold futures added massively to short positions – bets that prices will fall – ahead of Greek bailout deal. On Monday the gold price fell sharply at the open as markets continued to digest the implications of the Greek debt deal reached on Friday, but soon recovered to hover around $1,200 for most of the day.

Platinum price puzzles

Posted on 25 February 2015

Despite a big perceived supply deficit, platinum prices have remained depressed. How can this be? If anything demonstrates the illogicality of the precious metals markets, it appears to be platinum. But is this really the case?

Market not paying enough attention to copper supply situation: Citi

Posted on 25 February 2015

The current bearish sentiment toward copper is being driven by concerns about China’s economy slowing with the market ignoring the fact that mine supply is looking increasingly constrained, Citibank’s research department said Tuesday.

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