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VRS - who has written 37739 posts on Opalesque Commodities Briefing.


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Commodities and the End of QE

Posted on 31 October 2014

As boring as it sounds, I’m going to talk a bit about the end of QE today. Because it’s very important to how markets are going to behave over the next few months. As you probably know, overnight the US Federal Reserve voted to end its policy of quantitative easing. But it will still be reinvesting the interest payments from its $4 trillion plus portfolio and rolling over any maturing treasury securities, so it’s balance sheet will continue to grow, albeit much more slowly.

Commodity price plunge may benefit China’s slowing economy

Posted on 31 October 2014

Price slumps in the global commodity market will likely mean good news for China after the country reported slowing growth for the third quarter. Continued weaker commodity prices led by crude oil are expected to save the country on enormous import bills, boost trade surplus and provide more leeway for Chinese policy makers to fine-tune the economy.

It Looks Like $80 Oil Is Here to Stay

Posted on 31 October 2014

The oil selloff appears to be permanent. Record-breaking increases in U.S. production, a resurgent Libya, and Saudi Arabia lowering its prices in a bid to keep its share of Asian customers—all of it has combined to knock oil prices down 25 percent since June, and there might be more room to fall.

Oil-Price Drop Has Saudi Officials Divided

Posted on 31 October 2014

While international oil prices have plunged this month, Saudi Arabia’s normally talkative oil minister Ali al-Naimi has been on vacation.

These countries are getting killed by cheap oil

Posted on 31 October 2014

Oil is selling for roughly $83 a barrel on the global market. That’s bad news for Iran, Nigeria, Venezuela, Russia, and Saudi Arabia, among others. They need the black stuff to trade at far loftier levels in order to balance their budgets.

Oil price slide will lead to hiatus in M&A-bankers

Posted on 31 October 2014

The recent fall in oil prices will put a nascent recovery in oil sector mergers and acquisitions on hold, senior bankers told an industry conference on Thursday.

OPEC Oil Output Rises in October as Prices Tumble: Survey

Posted on 31 October 2014

OPEC crude production rose to a 14-month high in October as oil futures sank into a bear market, a Bloomberg survey showed. Production by the 12-member Organization of Petroleum Exporting Countries climbed by 53,000 barrels a day to 30.974 million, led by gains in Iraq, Saudi Arabia and Libya, according to the survey of oil companies, producers and analysts.

OPEC chief sees no big change on oil output in 2015

Posted on 31 October 2014

The Organization of the Petroleum Exporting Countries (OPEC) is unlikely to change much on its output next year, and there is “no need to panic” at the price drop, said the OPEC’s secretary general Abdalla El-Badri Wednesday in London.Badri said:” I don’t think 2015 will be far away from 2014 in terms of production. There is nothing wrong with the market.”

Gold price ignores Swiss vote on higher dollar

Posted on 31 October 2014

For gold investors it is an eye-opening prospect: if the Swiss vote Yes in a referendum next month, their central bank could be forced to buy gold equivalent to just over half the world’s annual mine supply, according to one analysis.

Goldcorp CEO Jeannes Sees Gold Price Floor Around $1,200

Posted on 31 October 2014

Gold won’t dip much below $1,200 an ounce as Asian buyers help create a price floor, according to the biggest producer of the precious metal by market value.

Credit Agricole Looks For Gold To Stabilize In 4Q, Soften In 2015

Posted on 31 October 2014

Credit Agricole sees gold stabilizing in the fourth quarter on “conflicting” influences but then soften in 2015. There is potential for long-term exchange-traded-fund investment to be further reduced, which could weigh on gold in dollar terms. “In the absence of a more persistent financial scare — not in our forecasts — this moderation in longer-term investor demand should continue,” the bank said.

Why are gold prices down again?

Posted on 31 October 2014

The U.S. dollar was comforted by the Fed’s October statement, viewed by many as more hawkish than dovish. The broad implication in the minds of many traders is that the Fed is likely to raise interest rates sooner than was thought ahead of the meeting.

Precious Metals Take a Beating on Fed Worries

Posted on 31 October 2014

Gold prices slid to the lowest level in nearly a month on Thursday and other precious metals fell sharply, as hawkish comments from the Federal Reserve and strong U.S. economic data indicated the central bank could raise interest rates sooner than expected.

Huh! Where did that copper market surplus go?: Andy Home

Posted on 31 October 2014

“Who’s got all the copper?” was the headline question in my last column on the copper market at the end of September. The answer, according to the Wall Street Journal, is Red Kite, the specialist metals hedge fund set up by Michael Farmer, a man who was trading the copper market before many younger readers were born.

Blow to asset managers in ETF arena

Posted on 31 October 2014

The long-running war between the mutual fund industry and the burgeoning exchange traded fund sector appears to have reached a turning point. Asset managers who run mutual funds have watched with envy as ETFs have grown into a $2.6tn global asset class by offering investors cheaper products that trade like stocks but passively track indices or other baskets of securities.

How to Invest in ETF’s

Posted on 31 October 2014

ETF investment is commonly regarded as a favorite of investors because of their convenience, simplicity, and low cost – so, it is a favorite of new investors and seasoned experts alike. The acronym “ETF” refers to “exchange-traded fund,” an investment vehicle that can be comprised of stocks, commodities, or currencies. It can also be designed to track a particular market or market sector.

Bad Things are Happening to Silver ETFs

Posted on 31 October 2014

There is plenty of attention being paid to gold’s slide below $1,200 per ounce and the yellow metals dangerous flirtation with the $1,180 an ounce level, which would represent a four-year low.

Britain’s FTSE feel weight of commodity stocks after hawkish Fed

Posted on 31 October 2014

Britain’s top share index edged lower on Thursday, under pressure from commodity stocks after the Federal Reserve struck a surprisingly hawkish tone in its outlook for U.S. interest rates.

Argentina, China activate currency-swap deal

Posted on 31 October 2014

The central banks of Argentina and China on Thursday activated a bilateral currency-swap agreement, with the South American country submitting a request for an initial tranche of yuan equivalent to $814 million.

Colombia to launch voluntary carbon credit trading

Posted on 31 October 2014

A Colombian environmental charity will launch a carbon trading platform in mid-2015 to companies at home and abroad seeking to voluntarily offset emissions, it said on Thursday, as projects in the Andean nation to cut greenhouse gases intensify.

Emissions trading will be back in the game if Direct Action proves ineffective

Posted on 31 October 2014

Greg Hunt vows emissions trading is dead and won’t be revived for 20 years or more. But he has quietly given himself the power to bring back a form of carbon trading, and he has advice that if he doesn’t use it, Australia cannot meet the climate promises it has made to the world.

No Need to Panic at Oil Price Drop: OPEC

Posted on 30 October 2014

There is no need to panic at the recent drop in oil prices, the secretary general of OPEC said on Wednesday, saying low prices would curb competing supplies and require the group to pump far more by the end of the decade.

OPEC Chief Says Output Likely to Stay Unchanged Despite Price Fall

Posted on 30 October 2014

OPEC’s oil output is likely to remain around the same level next year as it has this, while the group is unlikely to cut the ceiling on its production at a meeting next month despite the recent sharp slide in global oil prices, its secretary-general said Wednesday. “I don’t think 2015 will be far away from 2014 in terms of production,” Abdalla Salem el-Badri told reporters on the sidelines of an industry conference in London.

OPEC Says Shale Drillers First Affected by Oil-Price Drop

Posted on 30 October 2014

Shale oil drillers will be hurt by the fall in crude prices before members of OPEC because their costs are higher, according to the group’s Secretary-General. As much as 50 percent of tight oil output will be “out of the market” at current prices, while the Organization of Petroleum Exporting Countries is not in a critical situation, Abdalla El-Badri said at the Oil & Money conference in London.

Why OPEC’s losing its ability to set oil prices

Posted on 30 October 2014

OPEC ‘s glory days of steering global oil prices may be at an end. U.S. shale oil will replace the Organization of the Petroleum Exporting Countries as the first-mover “swing producer,” according to a Goldman Sachs report from the weekend-meaning OPEC is losing its power to set global prices for crude.

OPEC unable to rebalance oil markets, price to be the leveller: PIRA Energy

Posted on 30 October 2014

NYC-based PIRA Energy Group believes that cyclical strengthening is currently underway in the global economy with the U.S. in a better position to support global growth. In the U.S., stock excess modestly widens. In Japan, crude runs ease, but crude stocks draw. Specifically, PIRA’s analysis of the oil market fundamentals has revealed the following:

Energy Boom Can Withstand Steeper Oil-Price Drop

Posted on 30 October 2014

Oil prices would need to fall at least another $20 a barrel to choke off the U.S. energy boom, industry experts say, though some smaller American producers would face serious problems from a more modest decline.

PwC: US oil, gas transaction value hits 10-year high in 3Q

Posted on 30 October 2014

Driven by a rise in billion-dollar deals, midstream activity, and interest in upstream shale plays from foreign buyers, mergers and acquisitions in the US oil and gas industry reached the highest levels in the past decade during the third quarter, according to a quarterly report from PwC US Energy Practice.

Gold price could benefit from Swiss vote

Posted on 30 October 2014

Switzerland enjoys a rather more direct system of democracy than we do. If you want some kind of constitutional change, and you can find 100,000 people prepared to support your proposal with their signature, you can get a referendum called.

Gold is up and defying expectations

Posted on 30 October 2014

The World Gold Council has encouraged investors to consider gold as a valuable component in an investment portfolio. It comes as the council announced that the price of gold is up, amid record low volatility and against analysts’ forecasts, the World Gold Council has said.

Will the Swiss drive up gold prices?

Posted on 30 October 2014

If you are invested in gold, you should mark November 30 in your diary. That Sunday could have an impact on your portfolio as Switzerland votes in a referendum on a partial return to the gold standard.

Investors Turning Their Gaze To Silver

Posted on 30 October 2014

While silver prices have trended lower over the last three months, investor interest in the white metal has been tracking upwards, said an executive with the Silver Institute.

Southern Copper cuts view for 2015 copper output

Posted on 30 October 2014

Global miner Southern Copper said on Wednesday that it was revising down its forecast for its copper output next year by 9.8 percent to 758,000 tonnes.

Nickel miners soar as commodity price stages turnaround

Posted on 30 October 2014

ASX-listed nickel miners are soaring on the ASX today, as the commodity price stages a resurgence. Nickel prices had fallen more than 20% to below US$7 a pound, as stockpiles surged 45% to record levels, according to Bloomberg.

U.S. Bank: Any Macroeconomic Improvement Should Boost Base Metals

Posted on 30 October 2014

Improvement in the global macroeconomic picture is likely to help base metals, particularly since there is some supply tightness, says U.S. Bank Wealth Management. The firm notes that improved economic news for China helped copper prices rebound 1% for the last week, returning prices above the key $3-per-pound level.

ETF SEcurities backs commodities

Posted on 30 October 2014

Advisers and their clients would be wise to capitalise on a “short-lived” downward correction in commodity prices, researchers at exchange-traded product provider ETF Securities have suggested.

Investors Continue to Abandon Gold ETFs

Posted on 30 October 2014

ETF Trends reported that investors continue to pull out of gold exchange-traded funds. They have done so for the last few weeks. As quoted in the market news: ‘Last week, assets in global ETPs fell 0.8 percent to 1,654.2 metric tons, the lowest since September 2009,’ report Debarati Roy and Nicholas Larkin for Bloomberg.

ETFs Are Required to Be Transparent? Not Always

Posted on 30 October 2014

Transparency is often talked about as a hallmark of exchange-traded funds. Many investors are used to being able to look up the current holdings of their ETFs daily, generally on the fund firms’ websites.

Commodity Currencies Have BeenThrashed. Reversal In The Cards?

Posted on 30 October 2014

Traders are poring through the history books, looking for anything that will explain the latest thrashings in the commodity markets. Shockwaves have pulled back from their recent fever pitch, and, as volatility subsided, a new level of stability has finally settled market tensions. But uncertainties remain.

China currency claims a bigger share of reserve manager portfolios

Posted on 30 October 2014

Central banks from Asia to America are adding the Chinese currency to their portfolios as growing trade ties and a flurry of reforms by Beijing are leading reserve managers to view the renminbi as a viable reserve currency.

Currency Trading Skirts Turmoil as Volatility Drops

Posted on 30 October 2014

Traders in the more than $5 trillion-a-day foreign-exchange market have largely sidestepped the rising volatility and turmoil that rocked stocks and bonds this month amid renewed concern the global economy is weakening.

Emissions trading scheme ‘never coming back in any form’ under Coalition, says Greg Hunt

Posted on 30 October 2014

Environment Minister Greg Hunt says he commissioned a review into emissions trading, which he has vowed to never reintroduce, because the Climate Change Authority, which he failed to abolish, “might as well do work”. Mr Hunt declared on Wednesday emissions trading “is never coming back in any form”, potentially for the next two decades if the Coalition has its say.

Experts: Reducing Carbon Emissions And Increasing Grid Reliability Are Doable

Posted on 30 October 2014

With the Clean Power Plan out for comment, a lot utilities are scurrying to figure out their game plan — or just how they would work with their state utility regulators to reduce their carbon emissions by 30 percent by 2030, from a 2005 baseline. The general feeling is that the goal is doable but it may take a little more time.

Few commodities buck falling trend

Posted on 29 October 2014

Most everything we consume begins as a commodity, so when commodity prices go up, it transfers wealth and power from consumers to producers, but when commodity prices fall, it’s as close as it gets in economics to getting two meals for the price of one, or double coupons at your favorite grocery store. Such a moment appears to be happening now.

Energy groups left bruised as falling oil prices bite into profits

Posted on 29 October 2014

Tumbling oil prices have hit the earnings of two big London-listed energy companies, in one of the first tangible signs of how the oil supply glut is reverberating across the global economy. FTSE 100 oil and gas producers BP and BG Group both reported a fall in third-quarter profits on Tuesday, in part due to the drop in the oil price over the period.

Barclays Cuts Oil-Price Forecasts on World Supply Surplus

Posted on 29 October 2014

Barclays Plc cut its oil-price forecasts for the second time this month, citing expectations that OPEC won’t cut supplies sufficiently to remove a global surplus. The bank reduced its 2015 estimate for the average Brent price to $93 a barrel from $96, and for West Texas Intermediate to $85 from $89.

Why the Drop In Oil Prices Caught So Many By Surprise

Posted on 29 October 2014

It’s not just Wall Street banks such as Goldman Sachs Group Inc. that got it wrong. Energy consultants and even the U.S. government didn’t foresee the sharp slide in oil prices, which have tumbled 25% since June.

Why Does Saudi Arabia Seem So Comfortable With Falling Oil Prices?

Posted on 29 October 2014

Oil prices continue to tumble: down about 25 percent since mid-June to a four-year low, and many analysts believe there is no end in sight. While that’s good for consumers and most businesses in the U.S., the falling price is bad for oil-exporting countries such as Russia, Venezuela, Iran and Iraq.

Crude at $80 a Barrel? No Sweat, Say Oil Producer CEOs

Posted on 29 October 2014

U.S. energy companies are shrugging off a 24 percent plunge in oil prices, confident they can adapt and still make money. Amid predictions that the biggest drop in crude prices since the global financial crisis six years ago will choke off cash flow and slow drilling, industry leaders are reassuring investors they still have the means to return ample profits.

OPEC: Hobbit Or Orc?

Posted on 29 October 2014

The recent drop of $20 or so in oil prices from near all-time highs has pundits racing for their typewriters. Okay, laptops or something. Many have declared OPEC dead or ineffective, and one academic has noted that OPEC almost always produces over quota, proving it’s not a competent cartel.

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