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VRS - who has written 34721 posts on Opalesque Commodities Briefing.


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Geopolitical risks to support the oil price – despite demand growth drop

Posted on 23 April 2014

The boost the energy sector received up until early March is unlikely to be repeated as we move into the second quarter. Oil traders will be keeping an eye on several issues. China, the world’s biggest importer of oil, saw a dramatic reduction in February imports, after a record high in January. If this trend continues, demand growth could eventually have to be revised lower.

Impact of dramatic increase in US Shale Oil production

Posted on 23 April 2014

The US energy industry is witnessing a transformation with advances in hydraulic fracturing technology causing huge production growth in natural gas by 35% or 17 bcf/d.

Iran only OPEC member expert in deep-water exploration

Posted on 23 April 2014

Iran is the only member of the Organization of Petroleum Exporting Countries (OPEC) that has expertise in deep-water oil and gas exploration, an Iranian oil official said. Director of the Khazar Exploration and Production Company Ali Osouli said exploring the reserves in the deep Caspian basin requires technological expertise only a few countries possess, Iran Focus reported.

Netherlands may become natural gas importer by 2025, IEA says

Posted on 23 April 2014

The Netherlands, Europe’s second-largest gas exporter, may become an importer by 2025 as output falls from its Groningen province and progress in unconventional sources stalls, the International Energy Agency said.

India more than doubles Iran oil imports

Posted on 23 April 2014

India more than doubled its crude oil imports from Iran last month from a year ago as sanctions have eased on Tehran, official data show. The figures released on Tuesday indicated that India imported 387,000 barrels per day (bpd) of oil from Iran in March.

Texas expected to outproduce all but one of the OPEC nations this year

Posted on 23 April 2014

Benefiting from the booming Eagle Ford Shale and Permian Basin, Texas likely will best the oil output of every OPEC country but Saudi Arabia by year-end, says a top exploration official at ConocoPhillips, a key acreage holder in both of those oil-and-gas formations.

Is Asian demand enough to pull gold back up?

Posted on 23 April 2014

Despite the weakening of the gold market last year, the demand for gold in Asia (mainly in China and India) strengthened during 2013. But does Asia still play an important role in determining the price of gold? Also, is the strong demand for the yellow metal in Asia enough to pull back up the price of gold?

How Chinese consumers helped gold prices to slump

Posted on 23 April 2014

China is becoming much more influential on the global gold market. Its consumers invested heavily in gold jewelry and bars last year to make the country the world’s largest gold market. In the past, investors would predict gold prices based on India’s performance, and now they have to factor in China.

Key differences between investing in gold mutual funds and gold ETFs

Posted on 23 April 2014

An excellent way to achieve portfolio diversification and stability is to invest in gold. That’s because gold has long been the safe haven investment from the travails of the dollar.

World’s two largest gold miners in talks to merge

Posted on 23 April 2014

The world’s two largest gold miners, Barrick and Newmont, have been in talks to merge over the past week, highlighting the difficult environment for miners since shares started falling in 2011. A merger would create a $30bn super-company likely to clear antitrust hurdles because it would only account for 13% of global mine production, well below the 35% threshold Canadian antitrust regulators care about.

Playing gold? Keep an eye on silver

Posted on 23 April 2014

Gold prices fell to a near-three-week low on Monday amid sharp exchange traded fund outflows, continuing to erode mild gains posted in the first quarter of 2014. For those with an eye on silver the erosion of gold’s recent gains should come as no surprise.

Is this the best contrarian strategy for precious metals investors?

Posted on 23 April 2014

Often, the word “contrarian” equates to investors attempting to catch a falling knife. You don’t need to look like a used butcher’s block for contrarian strategies to pay off in the long run, however.

Zinc-output deficit widens as China buys more stuff: Commodities

Posted on 23 April 2014

Record spending by Chinese consumers on new refrigerators, cars and laptops is boosting zinc demand, creating the biggest production shortfall for the metal in eight years.

Global tin prices may fail to keep momentum

Posted on 23 April 2014

Global tin market is facing a shortfall since 2010. According to the Hindu Business line, the condition will prevail for the coming years. The regulations imposed by the Indonesian government on tin trade are the main reason behind the deficit of the metal. This is due to the minimum bid price set by a committee for Indonesian tin each week which is above LME price.

World crude steel production rises 2.7pct in March

Posted on 23 April 2014

World crude steel production for the 65 countries reporting to the World Steel Association (worldsteel) was 141 million tonnes (Mt) in March 2014, an increase of 2.7% compared to March 2013. In the first three months of 2014, Asia produced 274.0 Mt of crude steel, an increase of 2.6% over the first quarter of 2013.

5 things you need to know about latest ETF trend

Posted on 23 April 2014

Active managers have found a way to make exchange-traded funds—in the form of so-called ETF strategist funds—their friends. ETF strategists are active managers who design their own asset allocation models but have to make their market bets with at least 50 percent of holdings in ETFs, according to Morningstar’s widely accepted definition.

HKEx moves into commodities business

Posted on 23 April 2014

Hong Kong Exchanges and Clearing took its first step into the commodities business by unveiling plans to list coal and industrial metals futures on its trading platform. HKEx, traditionally a cash equities exchange, expects to offer renminbi-denominated futures for zinc, copper and nickel, and a US dollar contract for thermal coal by the end of this year.

“Enormous potential” for agriculture funds

Posted on 23 April 2014

Buy land, said Mark Twain, they ain’t making it any more. He also observed that one of the secrets of success in life is to eat what you like and let the food fight it out inside. Taken together, these two aphorisms go a long way to explaining the appeal of investment in agriculture.

El Niño could start as early as July

Posted on 23 April 2014

An El Niño weather phenomenon, which can trigger extreme weather patterns around the world and disrupt commodities markets, could start as early as July, according to a leading forecaster.

What is Bitcoin? A quick guide to the virtual currency, how it works, and its possible future

Posted on 23 April 2014

Bitcoin is currently a more reliable store of value for journalists than it is for investors. The concept of a ‘digital cryptocurrency’ and its association with various shady goings-on has turned the virtual currency into a symbol for the digital age.

Currency volatility falls to lowest since 2007; Dollar declines

Posted on 23 April 2014

Volatility among major currencies fell to the lowest since 2007 as global central-bank balance sheets continue growing, driving more liquidity into financial markets, even as the economy worldwide recovers.

IFC, Shenzhen partner to develop carbon trading in China

Posted on 23 April 2014

IFC, a member of the World Bank Group, has signed a memorandum of understanding with the Shenzhen Emissions Trading Exchange to develop products that will help increase the volume of trades, create more business opportunities, and contribute to mitigating climate change.

China carbon cash party over as U.N. credit stream dries up

Posted on 23 April 2014

Revenues for China’s biggest sellers of U.N.-issued carbon credits shrunk last year to a tenth of 2012 values, choking off billions of dollars flowing to clean energy projects in the world’s top carbon-emitter.

Money flowing back into commodities

Posted on 22 April 2014

Money is flowing back into commodity investments this year as the sector has broken out of lock-step with other asset classes and outperformed them, attracting investors who aim to diversify portfolios.

Should your portfolio own commodities?

Posted on 22 April 2014

Should your investment portfolio have exposure to commodities? The problem with commodities is that most of us don’t have storage space in the garage for a herd of cattle or pork bellies. And even if we did, it still wouldn’t give us diversified exposure to other important commodity sectors like agriculture, energy and metals.

The commodities markets are getting slammed

Posted on 22 April 2014

Stock markets aren’t doing much. But the commodities markets are selling off nicely. Palladium and platinum prices are leading metals prices lower. “In my opinion, palladium and platinum are the solutions to the pollution, and are also two of the most underreported commodities stories at the moment,” commodities guru Frank Holmes said.

IEA oil forecast revision down, but OPEC countries need not worry

Posted on 22 April 2014

The International Energy Agency (IEA) has revised upwards its forecast for global oil demand growth in 2014 to a modest 1.5 per cent on the back of a more robust outlook for global economic growth, a report said. The IEA now sees demand rising by 1.4 mbpd (or 1.5 per cent) this year to approximately 92.7 mbpd, from 1.3 mbpd (1.4 per cent) last month, said the latest NBK Economic Update.

IEA: Global oil supplies plunge in March on lower OPEC output

Posted on 22 April 2014

Global crude oil supplies fell month-on-month in March by a steep 1.2 million b/d to 91.75 million b/d, with a decline in output from members of the Organization of the Petroleum Exporting Countries accounting for near 75% of the loss, according to the International Energy Agency’s most recent Oil Market Report.

‘Saudi America’: Mirage?

Posted on 22 April 2014

At a time when Russia is saber-rattling and the Middle East is in turmoil, a welcome geopolitical trifecta could be in the making. The United States is poised to surpass Saudi Arabia and Russia as the world’s top oil producer. Canada’s oil sands have vaulted the country to energy superpower status.

A united Europe can end Russia’s energy stranglehold

Posted on 22 April 2014

Regardless of how the stand-off over Ukraine develops, one lesson is clear: excessive dependence on Russian energy makes Europe weak. And Russia does not sell its resources cheap – at least, not to everyone.

Hedge funds cut gold bets in longest slide of 2014

Posted on 22 April 2014

Hedge funds lowered bullish bets on gold for a fourth week, the longest streak this year. The net-long position contracted to the lowest since mid-February as speculators sold bullion on signs of accelerating U.S. economic growth. The investors more than doubled bets on lower prices in the past month while reducing wagers on a rally in six of the past seven weeks.

Gold price likely to average $1,225/oz in 2014 as investors shy away: GFMS

Posted on 22 April 2014

A lack of investment interest in gold is starting to take its toll on the price, with an average of $1,225/oz forecast for 2014 and heading lower in 2015, GFMS said Thursday in its Gold Survey 2014.

Physical demand will support gold prices

Posted on 22 April 2014

A recent report from Thomson Reuters GFMS has forecast an average gold price of $1,225 an ounce for 2014. The report has a bearish view on gold due to waning demand from investors.

Gold volatile around $1,300 as traders weigh U.S. economy, Ukraine turmoil

Posted on 22 April 2014

Gold prices started the week under the key psychological barrier of $1,300 an ounce but managed to regain some momentum as Asian traders started to jump into the market.

Gold won’t stay in $1300 territory : Gartman

Posted on 22 April 2014

Gold could easily be $100 higher one year from now, says Dennis Gartman, famed editor of the Gartman Letter. In the short-term, Gartman adds that gold will most likely not remain in its current $1300 territory.

Chinese gold demand to rise by 25pct by 2017

Posted on 22 April 2014

China is the world’s leading gold nation, having overtaken India last year, and the future is even shinier. Consumer demand will rise 25 per cent to 1,350 metric tonnes by 2017, the London-based World Gold Council said in a report this month.

Rough diamond prices to bounce back in 2014

Posted on 22 April 2014

Natural rough diamond prices may rise 5% to 10% in 2014 on recovering demand for jewellery in developed and emerging markets, the head of Belgium’s diamond lobby told Reuters in an interview.

Why platinum prices are poised to shoot skywards

Posted on 22 April 2014

In my most recent piece covering the platinum group metals (PGMs), I argued that a backdrop of declining supplies from Russia and South Africa, combined with surging off-take from the automotive industry, looks set to drive palladium prices to the stars.

Copper one of the major underperformers, selling recommended

Posted on 22 April 2014

Copper had been one of the major underperformers among base metals in 2014, having declined over 10% and during the past week, it closed near the $6650 / MT mark. It was lower last week as well having declined over $20 from its previous close. Overall, major reason behind fall in past week and recently had been the Chinese economic growth.

Why commodities may be on the verge of a new bull market

Posted on 22 April 2014

Through April 15, 2014 the Powershares DB Commodities Index ETF (DBC) has outperformed the U.S. equity markets year-to-date, posting a positive 3.39% return versus the 0.17% gain for the SPDR S&P 500 (SPY) ETF and the drop of more than 2% for the Powershares QQQ ETF.

Energy ETFs surge on higher commodity prices

Posted on 22 April 2014

The energy sector has been trading sharply higher, as rising oil and natural gas prices create a sturdy tailwind for many of these integrated service and exploration companies.

Barclays to exit from commodities

Posted on 22 April 2014

Barclays is pulling out of commodities trading as its boss Antony Jenkins attempts to focus the investment banking arm on its most profitable and least controversial areas. Just days before Jenkins faces a storm of protests about bonuses at the bank’s annual general meeting, Barclays will tell staff in its commodities arm that large parts of the operation are to be shut down or sold off.

Commodities spring cleaning

Posted on 22 April 2014

Have you performed your portfolio spring cleaning yet? The major banks certainly have, with commodities products and services being scaled back in good measure. U.K.-based Barclays Bank will soon be joining other top tier banks including JP Morgan Chase and Morgan Stanley in combing through their commodities operations and weeding out the poorly performing segments.

Chances of new El Niño cycle in 2014 impact on agricultural commodities

Posted on 22 April 2014

Concerns about the arrival of a new El Niño weather phenomenon have increased in recent weeks. A possible new El Niño cycle has a major impact on the global commodities market. El Niño - a weather phenomenon that occurs once every five years on average - involves periodical warm ocean water temperatures off the western coast of South America which can cause climatic changes across the Pacific Ocean.

Are claims of currency manipulation just China bashing?

Posted on 22 April 2014

Although China’s leadership recently announced that the RMB exchange rate would over time be liberalized, the exchange rate remains a controversial topic.

India: Intervention difficult when currency falls sharply

Posted on 22 April 2014

India’s central bank might have found it difficult to stem the rupee’s sharp depreciation during the currency crisis of 2013 by using its foreign exchange reserves, with the country’s external liabilities far exceeding official reserves.

China’s carbon traders flock to Hubei in search for profits

Posted on 22 April 2014

Expectations for a surge in carbon permit prices in China’s newest emissions market of Hubei have sent speculative traders scrambling to make a profit, driving up trading volumes far in excess of the country’s other markets.

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.

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