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VRS - who has written 37561 posts on Opalesque Commodities Briefing.


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Exposure on Chinese commodities not for risk-averse

Posted on 21 October 2014

Millions of Chinese are planning to leave China. Why? Where are they going? What do they plan to do? Run your eye down the list of nationalities taking advantage of the “golden visa” schemes across Europe and you will find that the majority of those buying relatively expensive property to be able to apply for residency are Chinese — 81 per cent so far in Portugal’s scheme.

Is the oil price fall more than just a coincidence?

Posted on 21 October 2014

The recent drop in oil prices could be due to more than just lower demand, according to some analysts, who have suggested that the U.S. could be deliberately manipulating the market to hurt Russia at a time of geopolitical stress.

Oil prices unlikely to exceed $100 per barrel in near future - Russian finance ministry

Posted on 21 October 2014

Russia’s finance ministry thinks that oil prices are unlikely to exceed 100 U.S. dollars per barrel in the short-time perspective, Maxim Oreshkin, the director of the ministry’s long-term strategic planning department, said on Sunday.

Iran Shuns Image as OPEC Hawk While Seeking Sanctions End

Posted on 21 October 2014

Iran, eager for an end to sanctions that have restricted its oil exports, is shunning its image as OPEC’s price hawk by avoiding calls for an emergency session of the group to support prices. Oil Minister Bijan Namdar Zanganeh consulted with Iranian President Hassan Rouhani about political and economic reasons for the price collapse, the ministry’s news website Shana reported.

Falling Oil Prices Make Double-Edged Sword

Posted on 21 October 2014

Falling oil prices are a double edged sword. On one hand they reflect the positive impact from rising US oil production and provide an economic stimulus shot. On the other hand they reflect a struggling global economy that is seeing falling demand as well as falling confidence.

Why some global commodities players are shipping less Canadian crude by rail now

Posted on 21 October 2014

Spot crude-by-rail volumes are down in Canada as traders and marketers including Glencore PLC are deterred by stronger heavy oil prices that have erased arbitrage opportunities to ship cheap crude from landlocked Alberta to higher-priced U.S. markets, industry sources said.

Crude Falls on OPEC Production Concerns

Posted on 21 October 2014

U.S. and global crude benchmarks ended lower Monday amid choppy trading and concerns that member nations of the Organization of the Petroleum Exporting Countries will maintain high production levels in a bid to compete for market share despite growing global crude supplies.

IEA reduces global oil demand forecast again on slower economic growth

Posted on 21 October 2014

The International Energy Agency’s Oil Market Report (OMR) for October continues to reduce its forecast of global oil demand for 2014 by 200,000 b/d from the previous month, to 92.4 million b/d, in line with lower expectations of economic growth and the weak recent trend. Annual demand growth for 2014 is now projected at 700,000 b/d, rising tentatively to 1.1 million b/d in 2015, as the macroeconomic backdrop improves.

IEA reduces global oil demand forecast again on slower economic growth

Posted on 21 October 2014

The International Energy Agency’s Oil Market Report (OMR) for October continues to reduce its forecast of global oil demand for 2014 by 200,000 b/d from the previous month, to 92.4 million b/d, in line with lower expectations of economic growth and the weak recent trend. Annual demand growth for 2014 is now projected at 700,000 b/d, rising tentatively to 1.1 million b/d in 2015, as the macroeconomic backdrop improves.

Can gold bounce back? Here’s why experts feel that you should give yellow metal a miss this Diwali

Posted on 21 October 2014

Gold is a good hedge against inflation and global investors get on the gold train only when they fear that inflation will go up. After fears of inflation, the European Union (EU) region is facing the threat of deflation, mainly due to the fall in global commodity prices. The international crude oil (Brent variety) is now trading at $83 per barrel, a two-year low.

Buying Gold on Dhanteras? 10 Things to Know

Posted on 21 October 2014

Many Indians consider Dhanteras as an auspicious occasion to buy gold. Many jewellers have launched promotional schemes to attract gold buyers while stock exchanges have extended trading hours for gold trading on Tuesday. Here is a 10-point cheat-sheet to understand how gold prices could be impacted:

Gold tipped to decline for third straight year in 2015

Posted on 21 October 2014

Gold prices will lag industrial precious metals platinum and palladium in 2015, analysts polled by Reuters predict, as a gradually stabilising world economy favours raw materials over so called “defensive” assets.

American specialists expect two-fold rise in gold prices by the end of 2014

Posted on 21 October 2014

American economists, such as John Williams, Peter Schiff, Paul Craig Roberts and Gerald Celente, expect the global revaluation of world currencies by the end of 2014. American statistical analyst Jim Willie explained the mechanism of such revaluation: Shanghai gold exchange is to eventually take over global price controls for the monetary metal away from the Comex (New York commodity exchange), and then force a global currency reset by raising the price of gold to its true or actual value, which exceeds the current price at least two-fold.

Large Speculators Add To Gold Bullish Positions For First Time Since Mid-August

Posted on 21 October 2014

After cutting bullish Comex gold futures and options holdings for eight straight weeks, large speculators added to their net-long holdings, according to data compiled by the Commodity Futures Trading Commission.

Refined lead market to show ‘modest’ deficit in 2014, 2015: ILZSG

Posted on 21 October 2014

Global demand for refined lead metal will continue to exceed supply by a modest amount in both 2014 and 2015, the International Lead and Zinc Study Group said Monday, forecasting a deficit of 38,000 mt this year and 23,000 mt in 2015.

Supply Deficit Unlikely To Help Copper

Posted on 21 October 2014

The copper market may end up in deficit this year, but that won’t do much for the metal’s price, analysts said. Instead of an earlier predicted supply glut, the copper market will likely finish 2014 with a deficit of around 150,000 tons, said Edward Meir, an analyst at INTL FC Stone., in a presentation at the LME Metals Seminar in London.

China metals demand seen up in 2015, copper at least 6%

Posted on 21 October 2014

China’s consumption of refined copper is expected to rise at least 6% in 2015, roughly in line with this year, supported by new investment in power networks and demand from rail projects, analysts and industry executives said. An expected slowdown in new residential and commercial building projects, however, could see an easing in consumption growth for aluminium and nickel in the world’s top metals consumer.

Iron Ore Risks Extending Collpapse on Supplies: Moody’s

Posted on 21 October 2014

The collapse in iron ore prices may have further to run as global supply increases and steel-demand growth slows, according to Moody’s Investors Service, which said it may reduce ratings on producers.

Iron ore price has a good chance to decline further

Posted on 21 October 2014

According to the analyst at USB, Daniel Morgan, the big fishes are trying to oversupply the market that the price of iron ore can further decline down to as low as possible. And they have a tendency to fill up the market as soon as the supply a tiny bit, so as to preserve the present structure of the market.

For Metals: The Prevailing Demand, Pricing Environment And Future Outlook

Posted on 21 October 2014

This year has been characterized by extreme volatility in the prices of both precious metals as well as metals used in industry. Broadly, metals have been characterized by subdued pricing environments this year and this has been reflected in the stock prices of companies in the metals and mining space. In this article we will take a closer look at the reasons for the prevailing demand and pricing environments for various metals, as well as the outlook for demand and pricing going forward.

Will ETFs Eventually Replace Mutual Funds?

Posted on 21 October 2014

Mutual funds: they’ve been the mainstay for retail investors for decades. But will they stay that way? There are lots of options now such as exchange-traded funds (ETFs) and even hedge funds for the exceptionally wealthy.

Goldman Explores Its (Liquid) Alternatives in the ETF World

Posted on 21 October 2014

Can Goldman Sachs put ETF investors on a liquid diet? Goldman is in talks to acquire IndexIQ, Reuters has reported. Index IQ is a small exchange-traded-fund firm known mostly for products that replicate hedge fund strategies, called “liquid alternative” ETFs.

No Surprise: OPEC Country ETFs Crushed by Oil’s Slide

Posted on 21 October 2014

Twelve countries are members of the Organization of Petroleum Countries (OPEC), the cartel that accounts for about 40% of global oil output and looms large when it comes to setting prices of the commodity.

LME plans to launch HK-based commodities contracts

Posted on 21 October 2014

The London Metal Exchange plans to launch Hong Kong-based commodities contracts as it seeks to attract direct investment from mainland China, the world’s largest metals consumer.

Citi buys Deutsche commodities trading book in expansion push

Posted on 21 October 2014

Citigroup Inc has bought Deutsche Bank AG’s energy and metals book, a source familiar with the matter said, in the latest sign of expansion from the U.S. firm in commodities trading as rivals retrench.

Brazil’s Real Leads Global Currency Declines as Poll Shows Tie

Posted on 21 October 2014

Brazil’s real led global currency losses as a voter poll showed opposition candidate Aecio Neves statistically tied with President Dilma Rousseff, dimming the prospect of a new government reviving growth.

Denmark’s plan to offset transport emissions sparks EU row

Posted on 21 October 2014

Green champion’s push to funnel car emissions into the emissions trading system seen as attempt to bend rules. A Danish bid to expand carbon offsetting to the transport sector has triggered uproar among NGOs and academics, with one new analysis saying it would devastate efforts to reign in fuel emissions.

Britain targets 2017 for start of European carbon market reforms

Posted on 21 October 2014

Britain wants reforms to Europe’s Emissions Trading System (ETS) to start from 2017, four years earlier than proposed, hoping to tackle the scheme’s massive oversupply and boost investment in clean technologies.

Commodity returns weaken, remains worst performing sector: Deutsche Bank

Posted on 20 October 2014

Commodity returns continue to weaken and remains the worst performing sector on an excess returns basis, according to Deutsche Bank. In a weekly report it said that since the end of September, returns are down 6.2% and 1.0% for the SPGSCI and BCOM indices respectively. As a result, commodities remain the worst performing sector on an excess returns basis.

Why are commodity prices falling?

Posted on 20 October 2014

Abundant supplies and a slowed global economy, especially in China, led to a considerable decline in commodity prices. Moreover, the strong dollar and fiscal stimulus withdrawal in the U.S., sanctions against and by Russia, as well as an increase in oil production were also influential. Bulgaria on Air reports.

Volatility is spice of life in commodities market

Posted on 20 October 2014

On the eastern side of Australia this week, the opening of a new mine in an oversupplied commodity sector was warmly welcomed as a humanitarian act that was providing jobs and hope. Over on the nation’s western coast, plans to increase supply into another oversupplied commodity were sharply criticised as a “flawed strategy” that was harming the local jurisdiction.

Commodities haunted by demand fears as outlook darkens

Posted on 20 October 2014

Commodity markets were haunted by demand fears this week in the face of mounting global economic worries, with crude oil prices striking four-year lows and base metals also suffering heavy falls. Markets around the world have been hammered by worries about the global economy as the eurozone, China and Japan struggle to reignite growth.

More clarity needed in the most volatile commodity oil

Posted on 20 October 2014

Companies need to know what returns they will get after investing risk capital. When the previous government wanted to double natural gas prices, the oil industry said the new price was, at best, a good interim step towards total market freedom. The government needs to keep in mind two things: one, India needs new discoveries; two, state-run firms have failed to make significant discoveries for a long time.

Falling oil prices put pressure on Russia, Iran and Venezuela

Posted on 20 October 2014

The silver lining in the recent financial market turbulence has been the continued decline in the price of oil, which is down about 25 percent since June. In addition to creating a windfall for U.S. consumers — one analysis reckoned the savings could amount to $600 per household — the drop, if sustained, will place considerable pressure on three problematic petrostates: Russia, Iran and Venezuela.

Low oil price means high anxiety for Opec as US flexes its muscles

Posted on 20 October 2014

Motorists, airlines and industry are enjoying low energy costs, the US is relishing its reduced reliance on the Middle East – and Opec is wondering how to reassert its authority. During a week of turmoil on the global stock markets, the energy sector played out a drama that could have even bigger consequences: a standoff between the US and the Opec oil-producing nations.

Russia can withstand lower oil prices but not for very long

Posted on 20 October 2014

Russia does not face an immediate threat from the sharp fall in oil prices over recent months. While the economy is heavily dependent on oil, the country’s accumulated reserves and the floating rouble will mitigate the shock, and Russia should be able to withstand levels of $80 to $90 a barrel for about two years. But in the longer term, persistently low prices – reinforced by the pressure imposed by western sanctions – could pose an existential challenge to Vladimir Putin’s regime.

Hedge Funds Say Oil Is Going to $0

Posted on 20 October 2014

Supply and demand are what typically fuel oil prices . However, market fundamentals aren’t the only factors at play. Speculators, like hedge funds and other big money investors, play a role in the price of oil as well. They can push it up past market fundamentals or, as they have recently, cause it to plunge — the latest dip sent global oil benchmark Brent down 25% to around $85 per barrel, and U.S. oil benchmark WTI even lower.

Hedge Funds Cut Bullish Bets on Crude as Prices Tumble

Posted on 20 October 2014

Plunging oil prices spurred hedge funds to cut bullish wagers by the most in six weeks, losing confidence in the willingness of producers to constrict supply. Money managers cut net-long positions in West Texas Intermediate by 8.1 percent in the week ended Oct. 14. Short positions jumped to the highest level in 22 months, U.S. Commodity Futures Trading Commission data show.

Five reasons to buy gold now

Posted on 20 October 2014

The last few years have been harrowing for gold investors, with international prices of the metal declining from $1,921 per troy ounce to about $1,240 now. But hold on, don’t write off gold yet. Global supplies of the yellow metal are likely to shrink as new reserves become increasingly difficult to find. And given that the Asian appetite for gold is set to grow, gold demand may only go up.

Gold Bulls Lured Back for First Time in Two Months: Commodities

Posted on 20 October 2014

Speculators added bullish gold bets for the first time in nine weeks as concern that global economic growth is slowing whipsawed equity markets. The gain in the net-long position in New York gold futures and options snapped the longest run of reductions since 2010. Prices rose for a second week as global equities retreated to an eight-month low.

Gold price upside limited in 2015 - Scotiabank

Posted on 20 October 2014

In the latest edition of the Scotiabank Commodity Price Index, published on Thursday, Scotiabank economist Pat Mohr observed, ““Spot gold prices fell as low as US$1,183 intra-day on October 5 - re-testing the previous low of US$1,180 on June 20, 2013 - after the Fed Chairman indicated that Federal Reserve Board would likely reduce its ‘asset purchase program’ in 2014 (quantitative easing),” Mohr observed in her analysis.

The sky is falling! Should you buy gold and silver?

Posted on 20 October 2014

If stock markets are heading for freefall, should one invest in gold and silver as a wealth protector. Perhaps not yet! Fear is stalking the global stock markets. Stock indices have been falling back sharply seeing a move to what might be seemed safer assets like bonds and gold.

Why worry about bullion silver?

Posted on 20 October 2014

Bullion silver is likely to be less pure than coins or small bars, but 1,000 ounce bullion silver bars are cheaper per ounce than the smaller fabricated sizes. Bullion silver is typically available for only a few cents more per ounce than the spot price in the paper futures market.

Chile’s Cochilco sees copper surplus growing in 2015 as Chinese demand slows Caracas

Posted on 20 October 2014

The global copper market will record larger surplus next year as demand in China, the world’s largest consumer of the metal, slows sharply, but prices will remain stable, the Chilean Copper Commission, or Cochilco, said Friday.

How New Commodity ETFs Really Work

Posted on 20 October 2014

BlackRock Launches the First ETF to Provide Long-Only Broad Exposure to Commodities in a ’40 Act Regulated Structure. After all, the biggest hassle for most investors looking to get exposure to commodities is that you get a “K-1 Partnership Income” form at the end of the year. That means your gains are taxed as if you personally were buying and selling futures.

The game has changed for ETFs in Australia

Posted on 20 October 2014

Australia’s exchange traded funds market has long puzzled industry watchers, who describe its slow development as a mystery. But that might be about to change. Before the turn of the year ETF assets in the country stood at $8.9bn. However, that number has quickly grown to $11.3bn in the past nine months. Australian ETFs (funds and products) attracted inflows of $2.6bn, surpassing the $1.1bn gathered over the whole of 2013, according to ETFGI, the consultancy.

Depositary receipt structures open ETF horizons

Posted on 20 October 2014

Stock exchanges across the world are competing to attract cross-border exchange-traded fund listings, and depositary receipt structures might yet prove to be an easy, less expensive, way to win business. While American investors can access foreign shares through depositary receipts listed in the US, listing rules mean they can’t buy foreign funds and ETFs in any form, including DRs.

Things can only get better in HKEx and LME’s marriage?

Posted on 20 October 2014

For the tie-up to operate more smoothly after a bumpy start, both parties need to boost their trading volumes and launch more products. This is not a takeover; it is a marriage.” That is how Charles Li Xiaojia, the chief executive of Hong Kong Exchanges and Clearing, described the £1.38 billion (HK$17.2 billion) purchase of the London Metal Exchange back in 2012.

Bitcoin exchange to trade other currencies

Posted on 20 October 2014

Coinfloor, the London-based bitcoin exchange, is planning to raise money from investors to expand its operations to trade a wider range of currencies and launch a bitcoin fund.

Norway’s amazing new abstract currency

Posted on 20 October 2014

Each bill depicts a particular landmark along Norway’s coast with the details boldly omitted. Large blocks of color are stacked together as in a blown-up jpeg, creating an atmosphere that’s just barely representational, both arctic and evocatively generic. The most startling aspect of these new bills is that they look genuinely new.

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