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VRS - who has written 37583 posts on Opalesque Commodities Briefing.


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Global Oil Glut Sends Prices Plunging

Posted on 16 October 2014

Oil prices posted their biggest one-day drop in nearly two years Tuesday as a U.S.-led wave of crude has crashed into weak global demand, threatening the stability of some countries and providing an economic lifeline to others.

Winners and losers from oil price plunge

Posted on 16 October 2014

Crude oil prices have plunged by $25, or more than 20 per cent, since mid-June, raising many questions. How low might prices go? If they rebound, at what level will they stabilise? Will Saudi Arabia and Opec move to cut output when they meet next month? At what price level might US shale oil production be affected and how severely?

What’s behind the drop in oil prices?

Posted on 16 October 2014

From oversupply and waning demand to economic concerns and politics — experts offer their views. Oil prices have been in a free-fall for nearly four months, and Tuesday’s $4 plunge was the biggest drop in more than two years.

Oil-Price Slump Is Double-Edged Sword for Asia

Posted on 16 October 2014

Falling crude prices are a boon to Asia, reducing costs for businesses and consumers and giving authorities room to lower interest rates amid slow global economic growth. Yet the world’s largest oil-importing region still could suffer if crude prices fall further, after declining this week to two-year lows in the U.S.

Saudi supply games expose OPEC impotence

Posted on 16 October 2014

The oil price is in free fall, down 27 per cent since June and 13 per cent so far in October. Saudi Arabia, the world’s traditional swing producer, has done nothing to defend the $100 (U.S.) a barrel floor price for Brent crude, which had not been breached since July, 2012. Why?

Oil market proves mightier than OPEC: Kemp

Posted on 16 October 2014

There is nothing remotely surprising about the sharp fall in oil prices over the last four months, except perhaps the timing. The fundamental forces driving prices lower (rising supply outside OPEC from shale and sluggish demand growth as result of conservation and substitution) have been clearly visible for at least two years.

Gold, silver doldrums to continue in 2015 - Natixis

Posted on 16 October 2014

Noting that events in the United States are expected to exert the biggest impact on gold prices as they continue to disintegrate investors’ need for a safe haven, Natixis Commodities Research has predicted a gold price base forecast of an average of $1,170/oz in 2015 and $1,180 in 2016.

Gold price vs Dow Jones shows metal still cheap

Posted on 16 October 2014

On Wednesday gold futures enjoyed another up day, lifting the price of the precious metal to a five-week high on the back of a huge selloff on equity markets after surprisingly weak economic data from the US. In late afternoon trade on the Comex division of the New York Mercantile Exchange gold for December delivery was changing hands for $1,241.70 an ounce, up $7.40 from yesterday’s close.

Societe Generale Trims Forecasts For Platinum, Palladium

Posted on 16 October 2014

Societe Generale is “cautious” on platinum group metals and downwardly revised its forecasts. Prices have tumbled in recent weeks, and while speculators remain net long, their bullish positioning has fallen since mid-August as the number of shorts increased, Societe Generale says. Outflows from exchange-traded funds have occurred.

Most industrial metals likely to move up next year

Posted on 16 October 2014

Copper is likely to trade lower on concerns of weak Chinese demand, along with trimming of its global economic growth forecast by the International Monetary Fund (IMF). Other industrial metals, however, are expected to buck the broad trend and strengthen in 2015.

Thomson Reuters Publishes GFMS Copper Survey Update 2014

Posted on 16 October 2014

Thomson Reuters today released an interim update to the 2014 edition of the GFMS Copper Survey: Growth spurt in supply as global consumption slows, sets scene for further price weakness. Copper is forecast to average $6,810/tonne in 2014 (3-month LME), a 7.3% decline year-on-year.

Domestic Chinese high-carbon ferrochrome prices fall; stainless steel demand weak

Posted on 16 October 2014

Domestic spot prices of 50% Cr Chinese high-carbon ferrochrome were at Yuan 6,200-6,400/mt (equivalent to 76-79 cents/lb) on Wednesday, down from Yuan 6,250-6,400/mt a week ago, after major stainless steelmakers in the country lowered their October purchase prices.

Safe-Haven Bets Help Gold ETFs Shine

Posted on 16 October 2014

Gold exchange traded funds are regaining some safe-haven demand as traders pushed up bullion to its highest in four weeks in response to rising volatility in the equities market.

Oil Collapse Highlights ETF Differences

Posted on 16 October 2014

Crude oil prices are plummeting this week, accelerating a steep downward trajectory that took hold this summer, thanks to an abundance of supplies that’s met by weakening global demand. This supply/demand imbalance has pushed WTI crude and the global benchmark Brent to multiyear lows in a decline that is showing no signs of stopping.

The Most Popular ETF Debuts of 2014

Posted on 16 October 2014

Despite recent global unrest and questions about global growth, United States equity markets remain near record highs, and the U.S. economy continues to strengthen, with still-declining unemployment, solid growth, and modest inflation.

Hall Commodities Hedge Fund Shutting After Poor Performance

Posted on 16 October 2014

Hall Commodities LLP, a London-based $100 million hedge-fund firm run by Tony Hall and Arno Pilz, told clients it’s shutting down after less than two years in business, citing poor performance.

China’s currency undervalued, Germany can boost Europe’s growth

Posted on 16 October 2014

The Obama administration said Wednesday that China has made strides in recent months to let its currency appreciate but that the yuan is still deeply undervalued. The Treasury Department said China’s yuan — also known as the renminbi, or RMB — “remains significantly undervalued,” but didn’t go as far as to name China or any other nation a currency manipulator in its semiannual report to Congress.

Currency Trading Is Both Boon and Bane for Wall Street

Posted on 16 October 2014

Foreign-exchange trading is once again fueling revenue at Wall Street banks. It also remains one of their biggest headaches. Currencies bolstered third-quarter results of bond-trading desks at the three biggest U.S. banks, an unexpected boon as prosecutors weigh charges over allegations that traders rigged foreign-exchange rates.

Europe needs to fix or ditch its emissions trading scheme

Posted on 16 October 2014

Without a complete overhaul, this flawed policy needs to be scrapped to make way for more effective means of meeting proposed 40% cuts in carbon emissions by 2030. If leaks are to be believed, when European council members meet next week, they will agree a headline target of a 40% cut in greenhouse gases by 2030 and a rag bag of assorted, non-binding targets that are intended to add up to a coherent energy and climate package.

EU carbon allowance surplus set to double by 2020

Posted on 16 October 2014

Europe’s carbon allowance surplus could more than double by the end of the decade, undermining its ability to deliver long term emissions reductions, according to campaign group Sandbag.

World Economy Gives Investors Growth Scare as They Look to U.S.

Posted on 16 October 2014

The global economy faces its biggest test of confidence since the European sovereign debt crisis as investors fear it’s running out of engines. Japan and the euro area are throwing up fresh signs of weakness by the day and emerging markets such as China are dragging instead of driving growth.

How will EMs be affected by commodity price declines?

Posted on 15 October 2014

Credit Suisse has a new report out on the winners and losers of the recent rout in global natural resource prices. While everyone has been paying attention to the remarkable decline in the value of oil, agricultural commodities and industrial metals have also become a lot cheaper recently:

How To Use a Trend-Following Strategy In Commodities

Posted on 15 October 2014

A recent article in the Financial Times highlights why, in part, the steam has gone out of the commodity markets. Judging the super cycle to be at and end investors have exited the market en mass in the belief no money is to be made from a falling market. After making 7% returns in the first half of the year from simply tracking the Bloomberg (formerly Dow Jones) Commodity Index, the third quarter has seen prices fall across the board.

Oil prices continue to slide on IEA report

Posted on 15 October 2014

Global oil prices have fallen further after the International Energy Agency (IEA) reported higher output and cut its forecast for demand growth. Brent crude fell $2.72 to $86.17 a barrel before seeing a slight recovery, while US crude dropped $1.75 to $83.99.

Saudi Prince Alwaleed says falling oil prices ‘catastrophic’

Posted on 15 October 2014

Intervention of Saudi royal may pressure Opec to cut production at its forethcoming meeting to arrest the slide in prices. Saudi Arabia’s most high-profile billionaire and foreign investor, Prince Alwaleed bin Talal, has launched an extraordinary attack on the country’s oil minister for allowing prices to fall.

In shift, OPEC price hawk Iran says can live with lower oil

Posted on 15 October 2014

Iran, in a change of tack, is saying it can live with lower oil prices, moving closer to the views of Saudi Arabia and other Gulf OPEC members and reducing the likelihood of any collective cut in OPEC output to support prices.

Oil’s Price Drop Stands to Help Refiners

Posted on 15 October 2014

Falling oil prices mean energy companies and their investors can expect lower profits in the coming months. But big, integrated oil companies are likely to find that a recently unloved part of their business—oil refining—provides a cushion.

IEA, OPEC Officials Say Shale Can Cope With $80 a Barrel

Posted on 15 October 2014

Most U.S. shale production would remain profitable even if oil prices fall to $80 a barrel, energy watchdog the International Energy Agency said Tuesday. Its estimate, which is shared by some OPEC officials, suggests crude prices could fall further before supply starts to come out of the market.

OPEC ‘may no longer play swing producer role’

Posted on 15 October 2014

The Organization of the Petroleum Exporting Countries may no longer necessarily play a role of a swing producer in the oil market, the chief analyst of the West’s energy watchdog, the International Energy Agency, Antoine Halff said.

World LPG prices plummet on financial market weakness

Posted on 15 October 2014

NYC-based PIRA Energy Group reports that PIRA’s restructured U.S. gasoline balances provide greater clarity and insight. In the U.S., large crude stock build, small product stock draw, and widening commercial stock excess. In Japan, crude stocks build despite higher runs. Specifically, PIRA’s analysis of the oil market fundamentals has revealed the following:

Crude Oil - So Very Bearish, But Is There A Price Floor At $80?

Posted on 15 October 2014

Oil prices have dropped over 10% since September 1. OPEC increased production in September. Global economic conditions are weak. Oil is moving toward contango. Is this a free market response to current conditions, or is it all managed?

Gold price set to average $1,170 in ’15 – Natixis

Posted on 15 October 2014

Gold mines operating at higher costs represent a new potential source of supply in a market where prices will average $1,170 per ounce in 2015, Natixis said. Due to aggressive cost-cutting by gold producers, the all-in sustaining costs of production have fallen to somewhere around $960 per ounce, the research firm said in its latest report on Tuesday.

Gold Futures Rise to Four-Week High on Demand for Haven

Posted on 15 October 2014

Gold futures rose to the highest in almost four weeks as concern that global economic growth is slowing spurred demand for a haven asset. The metal advanced this month as Federal Reserve officials indicated a worldwide economic slowdown may delay U.S. interest-rate increases. Germany cut its growth outlook today, and investor confidence fell to the weakest in two years as recession concerns mount.

Expect big silver price surge if gold stays positive

Posted on 15 October 2014

What a difference 10 days makes. A little over a week ago the gold market was all doom and gloom with the yellow metal crashing back below $1200 an ounce. But with a few extraneous geopolitical and global health factors positively impacting the market, and the possibility of a general stock market crash in the minds of investors, gold has seen positive action on the price front in something of a safe haven turnaround.

World’s top 10 silver producers updated – companies & countries

Posted on 15 October 2014

While it has always been relatively easy to collate the world’s top 10 gold miners because they are all primary producers, to do the same for silver is not nearly such an easy task as most of the world’s silver is produced as a by- or co-product of gold and base metals mining.

Palladium stands out from commodities crowd

Posted on 15 October 2014

“Palladium is the outlier in the metal space,” says Walter de Wet, commodities strategist at Standard Bank. Speculative short positions – bets that the price will drop – have been rising across the market since mid-August, not surprising given the negative sentiment shift of late.

A Comeback for Platinum and Palladium?

Posted on 15 October 2014

Platinum and palladium futures rose this past week as traders swooped in to take advantage of prices that have fallen as a result of the strong US dollar. Russian and Swiss central banks looked to take advantage of the lower prices by stockpiling platinum and gold, respectively.

Iron ore price bounce to see support from restocking: Investec

Posted on 15 October 2014

The sharp rise in iron ore prices this week, following bullish China September trade data, should be supported in the short term by restocking, Investec Bank said Tuesday. September iron ore imports to China rose 13.6% year on year, and was the second-highest reported monthly amount, Investec analysts said in a note.

Copper Ends at Highest Level Since Mid September

Posted on 15 October 2014

Copper prices rose to their highest level in more than three weeks Tuesday, after China’s central bank cut short-term borrowing costs for banks, suggesting that officials may be willing to take the edge off an expected slowdown in the economy of the world’s largest copper consumer.

Metals in 2015-16: Copper to decline, Lead, Zinc to rise

Posted on 15 October 2014

While precious metal markets watch anxiously for signs of when the world’s major central banks might begin to normalise monetary conditions, prices of industrial metals are currently being determined by fundamentals of supply and demand that are, in many cases, specific to each metal, according to latest Natixis Metals Review released on Tuesday.

3 reasons to avoid ETFs: Advisor

Posted on 15 October 2014

Exchange-traded funds—commonly referred to as ETFs—are all the rage. While there are several excellent reasons to use an ETF over the seemingly archaic traditional mutual fund, they are not a universally preferable solution. First, to be fair, let’s review a few reasons why ETFs can be a better solution than mutual funds.

Money flows into gold ETFS

Posted on 15 October 2014

Gold-backed Exchange Traded Funds (ETFs) were beneficiaries of the latest stock market sell-off. Stocks remain under pressure on worries about global growth, reports Reuters. The news agency says there is renewed interest in defensive assets. Meanwhile, analysts said earlier this year that they expected gold ETFs to do well this year.

Currency Comeback Seen in Record $5.9 Trillion a Day at CLS

Posted on 15 October 2014

CLS Group Holdings AG, operator of the world’s largest currency-trading settlement system, handled a record $5.94 trillion a day in September as volumes recovered from a slump in price swings that crimped activity.

Alleged mastermind of global online currency scheme held without bail after Manhattan hearing

Posted on 15 October 2014

The accused mastermind of a $6 billion digital currency system allegedly used as an underworld bank for hackers, identity thieves and drug dealers was held without bail Tuesday in federal court in Manhattan following his weekend extradition from Spain.

Europe Carbon Permit Glut Poised to Double by 2020, Sandbag Says

Posted on 15 October 2014

Europe’s surplus of carbon emission permits may more than double by 2020, threatening to render the world’s biggest emissions trading system irrelevant for the future, according to environmental lobby group Sandbag.

The Multibillion Dollar Question: How to Spend Carbon Revenues?

Posted on 15 October 2014

Debates over carbon pricing policies tend to focus on the costs imposed on firms and households. When a carbon tax or cap and trade program is introduced, firms see energy-related operating costs rise, drivers pay (cents) more at the pump, households see the prices of energy – and energy-intensive goods – tick up.

China commodities imports rebound on low prices, stimulus hopes

Posted on 14 October 2014

China posted a strong rebound in commodities imports in September, with iron ore, copper and coal seeing double-digit percentage growth from the previous month, although the gains were linked to opportunistic buying due to weak global prices.

Banks and investors see appeal of commodity finance

Posted on 14 October 2014

Despite the retreat of major global banks from commodities, commodity finance is nonetheless viewed as an attractive opportunity. But it is an area where banks face increased competition from trading houses.

Citi: It’s commodity bear market!

Posted on 14 October 2014

Yes it is. And here is why from Citi exploring all of the themes that I have used myself: It is difficult to avoid concluding, when looking at charts of oil, iron ore or the GSCI commodity index, that we are in a commodity bear market. There are myriad definitions of what constitutes a commodity bear market but one can usually only announce a bear market with certainty when it is already half-completed.

Oil price slump yet to hit US shale oil production: IEA chief

Posted on 14 October 2014

The vast majority of shale oil in the United States is produced at costs far below the current price of crude, the head of the west’s energy watchdog said, which means U.S. projects can withstand the market slump squeezing other producers.

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