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VRS - who has written 34624 posts on Opalesque Commodities Briefing.


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Influence of banks, hedge funds on commodities lowest since 2008

Posted on 17 April 2014

United Nations economists who previously called for government intervention to tame volatile swings in commodity prices say banks and hedge funds have since reduced their influence to the lowest level since 2008.

Material gains

Posted on 17 April 2014

Commodities: As commodity prices become decoupled from equities, certain resources should again prove their worth as part of a diversified portfolio this year. After a lacklustre few years, commodities have had a short but strong run over the first few months of 2014.

Is the bear market in commodities over?

Posted on 17 April 2014

Commodity-related equities have now troughed, according to JPM’s Neil Gregson, who says that the market has moved past the point of maximum pessimism. Having significantly underperformed and hit investors with huge capital losses over recent years, commodity and basic material stocks have bounced back and performed well relative to the wider global equity market so far in 2014.

GCC budget breakeven oil price creeps up

Posted on 17 April 2014

Budget breakeven oil prices in most Gulf Arab producers are creeping upwards, as governments continue to push through investment stimulus programs despite flatter production. The budget breakeven price is a useful tool to understand what price of oil is needed to ensure that a budget is in balance for a given level of government spending.

Angola is moving into oil’s big leagues as it leaves decades of war behind

Posted on 17 April 2014

After decades of sporadic growth and political turmoil, Angola is on the verge of catapulting to the top ranks of the world’s energy economy following major deep-water production investments by several top global oil companies.

China’s gold demand stagnates in 2014, a year after gold rush fueled by ‘grannies’

Posted on 17 April 2014

China’s gold-loving grannies bought enough gold last year to see them through this year, and perhaps longer. Despite prices lower than this time a year ago, when the gold rush in the world’s second-largest economy began, demand is likely to remain level this year, the first time it has not increased since 2002.

Bulls looking for $1.400 gold this year – can this level be reached?

Posted on 17 April 2014

Gold will remain a strong safe-haven bet in spite of its recent seesawing price as the Ukraine crisis and expectations of a further pullback in U.S. equities will push the precious metal’s price higher, CNBC’s weekly sentiment survey showed.

Bear market in Silver may be entering its next (and final) down phase

Posted on 17 April 2014

Critics of price charting charge that charts only show for certain where a market has been. I completely agree. These charges are valid. Yet, understanding where market has been can provide historical context — and this historical context can be useful in anticipating the future. With the above disclaimer in mind, let’s take a look at Silver’s chart history.

BMO: PGMs, nickel could buck 2Q seasonal trend; 2014 gold forecast revised to $1,263/oz

Posted on 17 April 2014

This could be the year that certain industrially oriented metals rise in the second quarter, thereby bucking their seasonal trend, said BMO Capital Markets.

The invincible precious metal bears

Posted on 17 April 2014

A year ago today saw one of the largest declines in COMEX Gold and Silver futures in the last several decades. For those who argued that an electronic futures market– where an entire years worth of silver production can be bought or sold in one day– would always and everywhere be able to shrug off strong physical demand and set prices however futures traders saw fit, last April was vindication.

Goldman Sachs upgrades nickel forecast on Indonesian export ban

Posted on 17 April 2014

US investment bank Goldman Sachs said Wednesday it has upgraded its three-month and six-month nickel price forecasts on the back of the Indonesian ban on nickel ore exports.

Hedge fund ETF usage spikes – as satisfaction slumps

Posted on 17 April 2014

The EDHEC-Risk Institute’s latest survey of European investors in exchange-traded funds (ETFs) has revealed that the popularity of hedge fund products in the space has simultaneously jumped and slumped. 2013 was a good year for hedge fund ETFs in terms of their take-up by investors: their usage rose by 14.8% to a record high – above 40% – since the institute began its survey.

Armajaro commodities fund assets fall almost 25 pct in first quarter

Posted on 17 April 2014

London-based Armajaro Asset Management lost nearly a quarter of assets at its largest commodities fund in the first quarter, the latest sign that edgy investors have continued to withdraw cash from the sector after weak returns, documents show.

HKEx said to plan coal futures as CEO Li makes commodities push

Posted on 17 April 2014

Hong Kong Exchanges & Clearing Ltd. Chief Executive Officer Charles Li is said to be picking coal for his company’s first energy product a year after paying a record price for the world’s top metals bourse.

Malaysia seeks to attract Western commodity traders as new hub

Posted on 17 April 2014

A number of Western commodity companies are setting up new trading desks in Malaysia as the southeast Asian country introduces incentives in a bid to attract business away from the main regional trading hub Singapore.

FMC mulls centre-specific commodity forward trades

Posted on 17 April 2014

The Forward Markets Commission (FMC) is considering permitting bourses to offer centre-specific, short-term forward trades in highly traded farm products as the regulator aims to increase delivery in the Rs 101- lakh crore commodity futures market, which is dominated by speculation and hedging.

US tells China it must allow its currency to strengthen

Posted on 17 April 2014

The US has told China its currency must be allowed to rise if it and the global economy are to see stable growth. The US Treasury’s twice-yearly report to policymakers says the yuan is “significantly undervalued”.

China denies U.S. warning of undervalued currency

Posted on 17 April 2014

China rejected on Wednesday a warning from the Obama administration that its currency was too weak, urging the United States to recognise that China aims to “perfect and regulate” the exchange rate system.

UK carbon capture scheme wins GBP300mln from EU

Posted on 17 April 2014

Brussels is to grant €300m to a pioneering carbon capture and storage project in the UK. The move comes as the EU seeks to regain its lead in a technology seen as crucial in the fight against climate change.

EU to host industry talks ahead of setting 2030 climate goals

Posted on 17 April 2014

The European Commission will hold three meetings this summer on how to ensure the bloc’s industries can compete in global markets while meeting goals to cut greenhouse gas emissions, it said on Wednesday. The meetings aim to gather views on rules determining if companies can continue to receive free carbon permits under the EU Emissions Trading System (ETS) beyond 2020, when current measures expire.

Banks tussle to join next generation of commodity dealers

Posted on 16 April 2014

Facing low volatility, a lack of trading opportunities and compliance headaches, major global investment banks are pulling back from commodities. But at the same time, a number of smaller and regional players are actively seeking to increase their involvement.

Time to rethink your commodity investment strategy, says Citi

Posted on 16 April 2014

It is time to take commodities seriously as an investment, and in particular a portfolio diversifier, according the strategists at Citi. They point out metals, hydrocarbons and basic foodstuffs have outperformed equities and bonds over the past quarter.

China underinvestment affects commodities in South Africa

Posted on 16 April 2014

A long-term investment in South African commodities — especially gold — is expected to produce a sizable payoff, according to a CCTV Africa report. Standard Bank Commodities Analyst, Walter De Wet, expects that prices will continue to rise as stocks mature and production heightens. More importantly, with the increased investment of China, commodities in Africa — and on a global scale — will edge toward stability.

Commodities shine as risk assets plunge

Posted on 16 April 2014

Prices of commodities including gold, copper and Brent crude oil are enjoying an uptick as global equity indices are spooked by a sell-off in tech stocks and political unrest in Eastern Europe, according to data from Charles Stanley.

Pre El Nino implications for spring/summer weather and commodities

Posted on 16 April 2014

There is a lot of talk about El Nino and often, as is the case in commodities, some hype over which crops and futures contracts will be affected in coming weeks and months. It is important to look, not just at the timing of when El Nino forms and how strong it might be, but ocean temperatures in other parts of the globe.

U.S. oil Independence by 2020?

Posted on 16 April 2014

Forecasts that the USA will achieve zero net oil imports by 2020 appear to be on-track. While the U.S. Energy Information Administration (EIA) and a number of media pundits (notably on the left side of the political spectrum) take a more cautious — or even downright negative — view, the US-EIA’s own data gives good reason for hope.

Global oil supplies jump

Posted on 16 April 2014

Global supplies jumped by 600 kb/d in February to 92.89 mb/d, led by a significant rise in OPEC crude output of 500 kb/d. Compared with a year ago, February production stood 2.03 mb/d higher, with non-OPEC supply up by 2 mb/d and OPEC crude output nearly unchanged (-5 kb/d).

Iran’s oil exports continue to surge despite sanctions cap: IEA report

Posted on 16 April 2014

Irans global crude oil exports have far-exceeded the one-million barrel-per-day cap set by the West. The Israeli paper referred to a recent IEA report as saying that Irans global oil exports in February made the highest record since June 2012.

Why Angola may be the next OPEC Darling

Posted on 16 April 2014

French energy company Total said it was sinking $16 billion into oil projects off the coast of Angola. The French major is following the bread crumbs offshore Angola and now the country aims to re-establish itself as a major oil player by courting investors to onshore fields.

OPEC says Azerbaijan’s oil production to rise by end-2014

Posted on 16 April 2014

OPEC predicts Azerbaijan’s oil production to amount to 0.87 million barrels per day (bpd) on average in 2014, Azernews reported on April 14. OPEC’s April oil market report said the production in the country will reach 0.89 million bpd in the fourth quarter as the highest production level of the year.

Is natural gas no better than coal?

Posted on 16 April 2014

A new study by scientists from Purdue and Cornell suggests that the methane emissions from shale gas could be much higher than previously thought. The study, published in the Proceedings of the National Academy of Sciences, looked at fugitive methane emissions in Pennsylvania by flying an airplane over drilling sites and collecting samples. What they found was a bit unnerving.

Can gold confound the markets and hit $1,400?

Posted on 16 April 2014

Gold will remain a strong safe-haven bet in spite of its recent seesawing price as the Ukraine crisis and expectations of a further pullback in U.S. equities will push the precious metal’s price higher, CNBC’s weekly sentiment survey showed.

China to witness sustained growth in gold demand: WGC

Posted on 16 April 2014

In a major report published on Monday by the World Gold Council “China’s gold market: progress and prospects” suggests that private sector demand for gold in China is set to increase from the current level of 1,132 tonnes(t)1 per year to at least 1,350t by 20172.

Gold miners suffer as bullion price dips

Posted on 16 April 2014

Gold miners suffered declines as the price of the precious metal sank below its 200-day moving average and began Tuesday on track for its biggest one-day fall since October.

Gold drops on Goldman Sach’s bearish outlook

Posted on 16 April 2014

On April 15 last year, gold prices had corrected sharply, following investment bank Goldman Sachs saying it had a bearish outlook on the commodity. At that time, prices had fallen from $1,600/oz to $1,300/oz in only a few days.

China companies hoard gold for collateral

Posted on 16 April 2014

Chinese companies may have accumulated up to 1,000 tonnes of gold for use as collateral in financing deals rather than to meet consumer demand in recent years, a new study says.

Dr. Doom is calling for an economic crash — How will precious metals be affected?

Posted on 16 April 2014

Apocalyptic predictions are usually the stuff of TV shows like “The Walking Dead,” but last week Marc Faber, a noted contrarian investor and publisher of the Gloom, Boom & Doom Report, made one of his own.

Palladium is price king

Posted on 16 April 2014

Palladium prices have increased 16 percent since the beginning of February. Palladium is the best performer among precious metals since 2011 and it is close to reaching the record levels it recorded in spring 2011.

Nickel drops most in two weeks on China demand concerns

Posted on 16 April 2014

Nickel prices in London fell for the first time in two weeks, snapping the longest rally since 2010, as industrial metals slumped amid concern that the economy will falter in China, the world’s biggest consumer.

Copper price leads metals lower while nickel eyes $18,000/t

Posted on 16 April 2014

The nickel price finished an active Monday LME session firm and around a 14-month high but the rest of the complex were sideways to lower in Tuesday’s Asian session. The markets will be closely watching data out of China this week, as Beijing is set to release half of its monthly data this week.

China Minmetals to buy world’s biggest copper mine

Posted on 16 April 2014

Minmetals China announced in April 14, that it has put pen to an agreement to buy Glencore Xstrata’s Las Bambas copper mine project in Peru for 5.85 billion U.S. dollars. The project marks the largest external metal mining purchase by a Chinese enterprise.

With commodities surging take a look at industrial metals

Posted on 16 April 2014

Stocks have been taking a beating and the dreaded “correction” has been tossed around a lot. There is one group of assets however that are squarely in the middle of their own bull market – metals. Sure, gold and silver grab all the headlines, but industrial metals can make for some great investment plays too.

An energy ETF favorite looks good

Posted on 16 April 2014

Equity-based energy exchange traded funds continue to shed the laggard status with which they were saddled last year and it is a diversified mix of funds that are seeing upside. Over the past month, the First Trust ISE-Revere Natural Gas Index Fund is the best-performing non-leveraged sector ETF with a gain of 11.1%, a performance that bests that of the United States Natural Gas Fund.

US declines to name China a currency manipulator

Posted on 16 April 2014

The Obama administration is raising concern about the value of China’s currency but is declining, as in recent years, to accuse Beijing of manipulating it. The administration also expressed concern Tuesday about South Korea’s actions in currency markets and about countries that use the euro and have wide trade surpluses.

Can commodities predict currencies? - Deutsche Bank

Posted on 16 April 2014

In a day where Aussie was dragged lower by falling gold prices, Deutsche Bank released an interesting paper where they claim to have found “stronger evidence that currencies can help predict commodity prices rather than vice versa.”

Brazil looks to swap World Cup publicity for carbon credits

Posted on 16 April 2014

Brazil, looking to offset the carbon emissions generated by construction, travel and other activities related to hosting the 2014 Soccer World Cup, said on Tuesday it wants holders of United Nations-backed carbon credits to swap them for publicity during the games.

U.S. greenhouse gas emissions fall 10 pct since 2005 -EPA

Posted on 16 April 2014

U.S. greenhouse gas emissions fell nearly 10 percent from 2005 to 2012, more than halfway toward the United States’ 2020 target pledged at United Nations climate talks, according to the latest national emissions inventory.

Commodities seen by Goldman down after ‘transient events’

Posted on 15 April 2014

Goldman Sachs Group Inc. expects commodity prices to decline this year even after precious metals and crop prices rallied on Ukraine tension and weather concerns. The S&P GSCI Enhanced Commodity Index may drop 4 percent in the next 12 months from a 4.3 percent decrease predicted in February, analysts led by Jeffrey Currie wrote in a report.

Hedge funds end ‘record’ ag commodity buying spree

Posted on 15 April 2014

Hedge funds’ longest run of bullish positioning by agricultural commodities in recent history ended as investors took profits on gains, as well as placing more bets on falling prices. Managed money, a proxy for speculators, cut its net long position in futures and options in the top 13 US-traded agricultural commodities, from cotton to cattle, by nearly 38,000 contracts in the week to last Tuesday, according to data from the Commodity Futures Trading Commission regulator.

IEA official predicts global oil demand to hit 92.7 mln bpd

Posted on 15 April 2014

International demand for oil in 2014 is expected to reach 92.7 million barrels per day (bpd), including 8.1 million from the Middle East, said a senior official of the International Energy Agency (IEA) here on Monday.

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