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VRS - who has written 38958 posts on Opalesque Commodities Briefing.


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As Commodities Fall, Some Investors See Reasons to Buy

Posted on 26 January 2015

A few brave investors are betting the gloom oppressing global commodity markets is on the verge of lifting. The world’s farmers, mining companies and oil producers spent billions of dollars over the last decade to increase output. The result: huge surpluses and sharply lower prices for commodities ranging from oil to sugar to iron ore.

Hedge Funds Bet Oil Has Further to Fall as Glut Grows: Energy

Posted on 26 January 2015

Hedge funds boosted bearish wagers on oil to a four-year high as U.S. supplies grew the most since 2001. Money managers increased short positions in West Texas Intermediate crude to the highest level since September 2010 in the week ended Jan. 20, U.S. Commodity Futures Trading Commission data show. Net-long positions slipped for the first time in three weeks.

Who needs a ‘long-term economic plan’ when the oil price is falling like this?

Posted on 26 January 2015

The Tories must know their strategy has failed. But, unlike the governments of the 1970s, the energy market has saved them. I have taken part in many a pub discussion about the perennial question of whether governments lose elections or oppositions win them, or a mixture of both. If ever a postwar British government deserved to lose an election it is this one. That is why the Labour party has got to get its act together, and soon.

Why Oil Prices May Not Recover Anytime Soon

Posted on 26 January 2015

Oil prices have collapsed in stunning fashion in the past few months. The spot price of Brent crude reached $115 a barrel in June, and was above $100 a barrel as recently as September. Since then, it has plummeted to less than $50 a barrel.

OPEC is in for long war with US shale producers

Posted on 26 January 2015

It is in the interests of the Organisation of the Petroleum Exporting Countries to slow that process. The situation is analogous to chemotherapy: OPEC hopes low oil prices will curtail shale before they destroy its own finances. That explains why the death of Saudi Arabia’s King Abdullah is unlikely to mean a shift in strategy. But OPEC could be in for a longer struggle than many expect.

Despite higher gold price Chinese demand still surging

Posted on 26 January 2015

The latest SGE withdrawal figures show withdrawals of 70 tonnes for the week ending Jan 16th – the third highest weekly figure ever. The recent rise in the gold price, now standing at just below the $1300 mark, does not yet appear to have put a dent in Chinese gold demand as represented by withdrawals from the Shanghai Gold Exchange (SGE).

Gold becomes the ultimate hedge

Posted on 26 January 2015

Lenin, the implacable Russian revolutionary, despised gold. He thought it should be used to build public lavatories. I was of much the same persuasion early in my career. The yellow metal’s economic utility seemed to me minimal in the light of its declining industrial uses. As an investment it was and remains entirely speculative because it yields no income.

Gold spike in major currencies a remarkable start to 2015

Posted on 26 January 2015

The new year has ushered in a remarkable and unexpected turn of events for gold. It is up significantly in four of the seven top currencies (the euro, British pound, Australian and Canadian dollars), up respectably in two others (U.S. dollar and Japanese yen) and down slightly in the last (Swiss franc).

Gold’s First Big Test In 2015

Posted on 26 January 2015

Some of you might think that Gold has already passed its first big test in 2015 by price being up better than 9% in this young year, despite the Dollar’s rising as well. But regular readers know such positive correlation with the Buck is not a big deal for us, our having demonstrated time and again in these updates that Gold plays no currency favourites.

Precious Metals Coveted Once More as Draghi Acts: Commodities

Posted on 26 January 2015

Investors’ desire for precious metals is deepening after Mario Draghi’s $1.3 trillion pledge drove gold to a five-month high and silver to the brink of a bull market. Their buying helped boost the value of exchange-traded products backed by gold and silver by $8.94 billion this month, the most since September 2012, data compiled by Bloomberg show.

Platinum Is Worth Acquiring When Cheaper Than Gold

Posted on 26 January 2015

Platinum is cheaper than gold, which is the opposite of what’s usually the case. The supply side of platinum is bad and will get worse if prices do not improve. Demand for platinum can only increase while substitutes become less attractive.

Global aluminium production; the sound of one hand clapping

Posted on 26 January 2015

What is the sound of one hand clapping? It’s supposed to be a question without an answer, a test posed by the master to the disciple in the Zen journey towards enlightenment. But it’s also as good a description as any of the current state of global aluminium production.

Energy ETF Holds Up Well

Posted on 26 January 2015

Consumers aren’t the only ones fueling up on cheap oil prices. Investors are adding energy stocks to their portfolios as West Texas Intermediate crude oil is showing signs of stabilizing. The Energy Select SPDR exchange-traded fund, which tracks energy companies in the S&P 500, is up 6.9% from its intraday low Jan. 13, outpacing broader market gains and oil itself, which are both up about 3% in the same period.

PwC Exchange traded fund assets will double to $5tr by 2020

Posted on 26 January 2015

Exchange traded fund assets will double to $5 trillion (Dh18.3 trillion) by 2020, according to a detailed study by PwC, far outstripping the asset growth of traditional fund managers, which have come under increasing pressure to prove their worth. The consultancy calls the growth a “game changer” for the asset management industry.

Here Is Why Switzerland Did NOT Start a Currency War

Posted on 26 January 2015

Not too long ago, the Swiss National Bank (SNB) gave up the peg it had maintained for years between its franc and the euro. Market reaction was sudden. Within minutes of the announcement, the franc, or swissie as it is called in currency-trading circles, rose almost 40 percent against the euro. Several articles in the financial media described these events as the start of a “currency war.” That is a catchy phrase.

Global interest grows in China’s currency, debt: Fitch

Posted on 26 January 2015

The Chinese currency yuan, or renminbi, continues its ascent among international payment settlements, trade and currency investment, ratings agency Fitch said in their latest report. A rapidly expanding network of offshore yuan clearing centers has facilitated direct access to China’s onshore financial markets, Fitch said.

Devaluation and discord as the world’s currencies quietly go to war

Posted on 26 January 2015

As quantitative easing spreads from country to country, investors are left nervous and discouraged: and stagnation follows. There is every sign that the European Central Bank’s €1.1 trillion stimulus package is going to unleash a long period of beggar-thy-neighbour currency wars. Maybe not quite in the way that wrecked the global economy in the 1930s – triggering retaliatory trade tariffs and sending industrial production spiralling downwards.

Is coffee the new tea?

Posted on 26 January 2015

The UK coffee-shop business is booming and with the number of outlets set to top 20,000 in 2015, we ask… is coffee the new tea? In the West coffee consumption is about a third of tap-water consumption. After petroleum, coffee is the second-most traded commodity in the world.

Nick Stern Is Wrong; Climate Change Is Not The Largest Market Failure The World Has Ever Seen

Posted on 26 January 2015

The takeaway line from the Stern Review, Sir Nicholas Stern’s (now Lord Stern) investigation into climate change and what, if anything , we might do about it, is that climate change is the largest market failure the world has ever seen. My argument here is that this simply isn’t true. No, this doesn’t mean that I think the Stern Review itself is wrong. I think there’s a lot that is wrong with it, certainly, and I have since I first read it on the day it was released.

All of the major commodities may fall in price this year, World Bank says

Posted on 23 January 2015

This year could mark the rare occurrence when all of the nine major commodity price indexes decline, according to a World Bank forecast released Thursday. The latest report on commodities comes at a time when oil prices have seen a 55% drop over the past seven months, only topped by the 75% drop during the Great Recession, and the 67% drop from November 1985 to March 1986.

Best and worst commodities in 2014

Posted on 23 January 2015

Commodities are hugely cyclical as is all too evident at the moment, with oil and metal prices in steep decline. A look at what did well in 2014 and what didn’t reveals how fortunes change and unearths a number of surprises. Website Visual Capitalist has run an infographic illustrating the annual returns for all commodities last year - the Periodic Table of Commodity Returns - with accompanying comment.

Oil price could spike to US$200 a barrel

Posted on 23 January 2015

Rampant speculation by hedge funds and a rare confluence of short-term shocks have driven the price of oil far below its natural clearing level, coiling the springs for a fresh spike this year that may catch markets badly off guard once again. “The price will rebound and we will go back to normal very soon,” said Abdullah Al-Badri, Opec’s secretary-general. “Yes, there is an oversupply, but fundamentals don’t justify this 50% fall in price.”

This is the price point to beware for falling oil

Posted on 23 January 2015

Many investors believe that declining oil prices are a good thing—for now—though some see $30 a barrel as the break point when the trend turns negative. Earnings season has provided a good glimpse at how energy is impacting corporate America. Outside the sector, this is turning into a pretty good quarter. Include energy, though, and things are fairly gloomy.

OPEC’s Badri says oil won’t fall to $20: Bloomberg

Posted on 23 January 2015

Oil prices will not fall to $20 or $25 a barrel, OPEC Secretary-General Abdullah al-Badri said in an interview with Bloomberg. “The price will not go to $20 or $25, I think the price will stay at where we are now,” Badri said, Bloomberg reported.

OPEC Will Blink in Battle With U.S. Shale Drillers, Poll Shows

Posted on 23 January 2015

U.S. shale drillers won’t scale back output quickly enough for OPEC to avoid production cuts this year, according to a quarterly poll of Bloomberg subscribers.

Gold Prices Get a Boost While Oil Spirals Downwards

Posted on 23 January 2015

Gold’s relationship to oil has been turned on its head. Investors who saw little value in the metal last month, as plunging energy costs curbed inflation, have started buying in January even as crude continues to tumble. Bullion is off to its best start to a year since 1980 while West Texas Intermediate is trading near the lowest since April 2009.

Is this the start of a gold bull market?

Posted on 23 January 2015

Many strategists are saying a gold bull market has just begun, as investors crowd into the one asset that isn’t getting debased by central banks. Chart analyst point to the price breaking out of long-term resistance levels.

Gold reclaims $1,300 level as ECB rolls out QE

Posted on 23 January 2015

Gold prices strengthened Thursday to reclaim the key $1,300 mark after the European Central Bank announced a full-blown stimulus plan. Gold for February delivery rose $7, or 0.5%, to settle at $1,300.70 an ounce while March silver futures SIH5, -0.03% advanced 17 cents to $18.36 an ounce in electronic trading.

Gold and Silver Buyers Take a Shine to Precious Metals Again

Posted on 23 January 2015

Gold and silver are getting another turn in the spotlight, luring investors worried about slowing global growth and surprises by central banks. On Thursday, the European Central Bank offered the latest reason to pile into precious metals by unleashing a bigger-than-expected bond-buying program amid continued worries about Europe’s economy.

Speculators Looking for Havens from Slowing Growth are Piling Into Silver

Posted on 23 January 2015

Silver headed for a bull market in its best start to a year in more than three decades as the European Central Bank expanded economic stimulus measures, boosting demand for the metal as a store of value.

Global aluminum production; the sound of one hand clapping: Andy Home

Posted on 23 January 2015

What is the sound of one hand clapping? It’s supposed to be a question without an answer, a test posed by the master to the disciple in the Zen journey toward enlightenment.

Palladium ETF to Shine this Year

Posted on 23 January 2015

ETF Trends reported that low prices of gasoline and cheap bank loans may attract more automobile buyers and hence, result in the palladium-related exchange traded funds to shine this year. As quoted in the market news: Fueling the increased palladium demand, global car sales increased 3.4% in 2014 to a record 81.6 million vehicles.

How To Short Oil With ETFs

Posted on 23 January 2015

A respite to the oil price havoc has been wiped out with some forecasting a further drop in the days ahead. The commodity has been on a wild ride over the past six months, plunging about 60%. In fact, oil saw the biggest weekly decline last week since March 1986.

Angola to have commodities exchange

Posted on 23 January 2015

The Capital Market Commission (CMC) of Angola will this year prepare a study with the aim of opening a Commodity Exchange to trade agricultural and livestock commodities contracts, CMC director Vera Daves said in Luanda.

Commodity currencies face race to the bottom?

Posted on 23 January 2015

Commodity currencies may face a race to the bottom as the Bank of Canada’s surprise rate cut sent the Canadian dollar to five-year lows and could pressure Australia’s central bank to follow suit.

Why ECB action is likely to stoke global currency wars

Posted on 23 January 2015

Will quantitative easing by the European Central Bank succeed? Here’s a tip: watch the euro. Although Mario Draghi, president, denied it was a target, the weakening currency could prove the most effective channel through which QE reaches the real economy.

Goldman’s Cohn: “We are in currency wars”

Posted on 23 January 2015

Countries around the world are already engaged in a currency war in a bid to boost growth, Gary Cohn, the president and chief operating officer of Goldman Sachs, said on Thursday.

EU carbon market price expected to rise before 2020 following MEPs’ vote

Posted on 23 January 2015

The chances of a modest increase in carbon prices before 2020 rose on Thursday after votes by MEPs on one of the European Parliament’s most conservative committees.

Political divisions hit EU carbon price

Posted on 23 January 2015

Carbon prices plunged almost 8 per cent on Thursday after a bumpy start to the EU’s attempt to fix its dysfunctional emissions market, with bitter divisions among parliamentarians creating uncertainty among traders.

EU Carbon Plummets as Panel Rejects Market Fix Recommendation

Posted on 23 January 2015

European Union carbon allowances posted their biggest drop since April after a panel in the bloc’s parliament failed to agree on how to modify a measure curbing a glut of carbon permits.

Declining Commodity Prices Ahead With Weak Global Economy

Posted on 22 January 2015

Oil may be holding above $40.00 per barrel, but investors shouldn’t get too comfortable. The chart foreshadows oil prices could falter and maybe even drop below $40.00. It’s true that speculation has influenced the direction of oil to some degree, but much of the negative sentiment has to do with a declining global economy that shows some despair.

Commodities explained: The price-supply disconnect

Posted on 22 January 2015

The commodities cycle is all about supply and demand responding to prices. To put it very simply, as prices rise companies invest and supply increases. Prices then fall, which leads to production cuts, and eventually demand increases, pushing up the market and the cycle starts all over again.

OPEC, oil companies clash at Davos over price collapse

Posted on 22 January 2015

OPEC defended on Wednesday its decision not to intervene to halt the oil price collapse, shrugging off warnings by top energy firms that the cartel’s policy could lead to a huge supply shortage as investments dry up.

Oman Joins Other Oil Nations Saying OPEC Decision Wrong

Posted on 22 January 2015

Oman, the biggest Middle Eastern oil producer that’s not a member of OPEC, joined Venezuela and Iran in questioning the group’s decision to keep its output target unchanged even with crude prices falling.

Oil prices will normalise soon: OPEC

Posted on 22 January 2015

The current slump in oil prices will be short-lived, OPEC’s secretary-general said, defending the oil-producing group’s November decision not to cut its production. “I tell you, the price will rebound and we will go back to normal very soon,” Abdalla Salem el-Badri said while speaking at the World Economic Forum in Davos, Switzerland.

IEA economist sees upward pressure on oil prices by year-end

Posted on 22 January 2015

Oil prices will face upward pressure by the end of the year, the chief economist of the International Energy Agency (IEA) said on Wednesday, as a fall of more than 50 percent in the price of crude since last June is expected to eventually curtail some production.

Oil price drop is ‘economic warfare against US enemies’

Posted on 22 January 2015

The current oil price decline can be explained by heavy selling in US future markets which is part of an all-out economic war between the US and countries like Russia, Iran and Venezuela, says financial journalist, Willem Middelkoop. The current price can only partially be explained by technical factors like growing US oil production which increased by a million barrels per day in the last year.

Gold fifth best performing commodity of 2014

Posted on 22 January 2015

Before you gold bulls out there cry ‘rubbish’ it should be borne in mind that last year was a disastrous year for virtually all commodities across the board. Only four internationally traded commodities showed gains over the year, while gold was the least bad negative performer among the rest with a drop of only 1.7% – but has shot up nearly 10% since the start of the year.

Gold above $1,300 for first time in 5 months

Posted on 22 January 2015

Gold prices have risen above $1,300 an ounce for the first time since August 2014. It’s because the global economic slowdown, expectation of ECB ‘easy money’, and currency volatility make investors turn to a safe haven, gold trader Mark O’Byrne told RT.

Copper prices may rise to $10,000 a tonne by year-end: Simon Hunt

Posted on 22 January 2015

Copper prices in the global market are likely to witness an exponential rise and may even hit the USD 10,000 a tonne mark by the end of this year, according to an industry expert. However, after a brief boom the prices are expected to decline and may even plunge below the $2,000 a tonne level by 2017.

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