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VRS - who has written 37629 posts on Opalesque Commodities Briefing.


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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.

Eastern Europe attacks planned EU emissions curbs

Posted on 20 October 2014

The EU’s plan to slash greenhouse gas emissions by 2030 has come under heavy assault as an increasing number of eastern European nations rally behind Poland’s threat to scupper a landmark climate deal this week.

Commodities Extend Decline to Five-Year Low on Oil to Tin

Posted on 17 October 2014

Commodities extended declines to a five-year low led by industrial metals and oil on speculation supplies are more than sufficient with prices of everything from gasoline to food falling.The Bloomberg Commodity Index (BCOM) fell 0.6 percent at 12:55 p.m. in London after dropping to the lowest since July 2009. Zinc declined 3 percent, nickel retreated 2.5 percent and West Texas Intermediate fell below $80 a barrel for the first time since June 2012.

Declines in commodity prices likely to continue through 2015, says WB report

Posted on 17 October 2014

Prices of most commodities, particularly oil, are expected to remain weak for the remainder of this year and through much of 2015, says the World Bank’s latest issue of Commodity Markets Outlook. Growing concern over a slowdown in the Euro Area and emerging economies, a strong US dollar, a well-supplied oil market and good crop prospects have contributed to a weakening of many commodity prices since the summer. The World Bank energy price index declined by about 6 percent during the third quarter, after being broadly stable in the first [...]

The Strong Dollar Weighs Heavily on the Commodities Market

Posted on 17 October 2014

Early in 2014, the commodities markets were doing surprisingly well. China’s appetite for raw material was holding up, and the International Monetary Fund was predicting a decent year of global growth, which meant rising demand for everything from o

The oil price is tumbling. Is that good or bad news for the world economy?

Posted on 17 October 2014

After declining gradually for three months, oil prices suddenly tumbled almost $4 on October 14th alone. It was the largest single-day fall in more than a year and brought the price of Brent crude, an international benchmark, to $85 a barrel. At its peak in June, a barrel had cost $115.

Recent decline in crude oil price artificial: Jim Rogers

Posted on 17 October 2014

Even as crude oil prices have dipped to all-time lows, Jim Rogers of Rogers Holdings told ET Now that the decline is ‘artificial’. “Some of this (oil price decline) is artificial. OPEC is trying to drive down prices because of Shale competition. The oil situation is very artificial at the moment.”

Saudi Arabia tests US ties with oil price

Posted on 17 October 2014

By encouraging oil prices to fall, Saudi Arabia is taking a calculated gamble in its already strained relationship with the US, hoping that the potential damage to America’s shale industry will be offset by the geopolitical and economic prizes on offer to Washington.

Saudis, other Gulf states to oppose OPEC output cuts

Posted on 17 October 2014

Gulf nations including Saudi Arabia, Kuwait and the United Arab Emirates are set to oppose any cut to OPEC’s oil production ceiling at next month’s meeting despite the continuing fall in global oil prices, according to several people familiar with the situation. Despite the drop in prices, Gulf nations fear any lowering of the limit on the amount that can be produced by the Organization of the Petroleum Exporting Countries would lead to members of the cartel losing share in global oil markets.

How Has The Federal Reserve Impacted Gold Since 2009?

Posted on 17 October 2014

The last five years will be forever marked on the history books with some of the most innovative, aggressive and controversial actions by the U.S. Federal Reserve ever. There are critics and there are fans of former Federal Reserve Chairman Ben Bernanke, and perhaps the jury is still out on his overall handling of the 2008-2009 global financial crisis.

Is gold set for a bull run?

Posted on 17 October 2014

Gold prices could be set for a boom in the coming weeks as stock market jitters, Diwali celebrations and bulk-buying by the Swiss creates a perfect precious metal storm. Yesterday, the FTSE 100 dropped a mammoth 2.8 per cent, with other worldwide markets also suffering.

Gold price higher on safe-haven buying, US dollar retreats

Posted on 17 October 2014

Gold prices held at higher levels after a spate of poor US data in the previous session boosted the metal above resistance levels and weighed on the dollar. The spot gold price was last at $1,242.70/1,243.40 per ounce, u $2.70 on Wednesday’s closing level and bubbling just below the month high hit in yesterday’s session at $1,250.

The Real Reason Behind Gold’s October Surge

Posted on 17 October 2014

On October 6 when GLD was trading for $114, I outlined a surprising case for the bullish trend change in the precious metals by asking the question accompanying the chart below, “What is this a chart of?”

Why Murenbeeld Thinks Gold Will Hit $1,335

Posted on 17 October 2014

It seems hard to find someone who is bullish on gold prices these days but this economist thinks $1,335 gold may not be far-fetched. “One of the things that tend to be overlooked…is that the real interest rate in the U.S., particularly at the short end, is going to remain negative right through 2015,” he said.

LBMA names Morgan Stanley as gold, silver market maker

Posted on 17 October 2014

The London Bullion Market Association (LBMA) said on Thursday it appointed Morgan Stanley as a market maker, underscoring the ambitions of some banks to expand into precious metals trading while others exit due to stringent regulations.

LME to run palladium and platinum price benchmarks

Posted on 17 October 2014

The London Metal Exchange will administer the digital price-setting mechanism for palladium and platinum, months after a failed bid to run the replacement for the daily silver benchmark.

HSBC Bullish On Platinum Group Metals But Trims Forecasts

Posted on 17 October 2014

HSBC maintained its bullish outlook on platinum group metals but trimmed its price forecasts Thursday. The bank described platinum as “oversold” after a decline in recent months, dragged down by weakness in gold and strength in the U.S. dollar.

Metals sector welcomes pro-industry direction of EU’s incoming commission team

Posted on 17 October 2014

Europe’s non-ferrous metals associations have said they are positive about the reindustrialisation policy of the new European Commission president Jean-Claude Juncker.

Goldman Sachs in talks to acquire ETF provider IndexIQ

Posted on 17 October 2014

Goldman Sachs Group (GS.N) is in discussions to acquire IndexIQ, a Rye Brook, New York-based exchange-traded fund provider, according to three sources familiar with the situation. The deal, if finalised, would enable Goldman to introduce passively managed and actively managed exchange traded funds within months.

Nasdaq Lists iShares Commodities Select Strategy ETF

Posted on 17 October 2014

iShares is offering another exchange traded fund for investors. Nasdaq announced that BlackRock will list a new exchange-traded fund, the iShares Commodities Select Strategy ETF (Symbol: COMT). COMT will begin trading on Nasdaq today, October 16th.

In Currency Markets, The Safest Haven Is Yen, Not the Dollar

Posted on 17 October 2014

Concerns about slowing global growth are sending investors into assets that hold their value in turbulent times, such as U.S. Treasurys, German bunds and gold. But among currencies, the haven is more likely to be the Japanese yen than the U.S. dollar.

Russia’s Currency Crisis: This Is So 2008!

Posted on 17 October 2014

Are you getting that “it’s kinda like 2008 again” feeling? I am! In November of 2008, the Russian ruble was collapsing vs. the dollar, the Russian central bank was intervening in the foreign exchange market, Russian interest rates had risen to high levels, and I was writing an op-ed about it.

Treasury finds no currency manipulation

Posted on 17 October 2014

The U.S. Treasury refrained on Wednesday from labeling any major trading partner a currency manipulator, but said that the currencies of China and South Korea should strengthen. In its twice-a-year assessment of international foreign exchange,Treasury once again said no country had met the statutory test of manipulation. The U.S. last cited China as a manipulator in 1994.

Merkel says Europe must reform emissions trading scheme quickly

Posted on 17 October 2014

German Chancellor Angela Merkel said on Thursday that Europe must agree quickly on a reform of the Emissions Trading Scheme (ETS) and as part of that, surplus CO2 certificates must be reduced.
“The German government will push for a clear signal for a quick and sustainable reform of the Emission Trading Scheme. It is and remains the central instrument to fight climate change in Europe,” Merkel told the Bundestag lower house of parliament in a speech………………………………………..Full Article: Source

Steelmakers must embrace low carbon shift if they are to secure their future

Posted on 17 October 2014

The EU steel industry’s future depends on working with policy-makers to embrace low carbon and energy efficient practices, a new study has concluded. Research partnership Climate Strategies this week outlined how investment in exploiting the remaining energy efficiency potential of the industry, shifting from coal to gas-fired energy, and deploying carbon capture technology can help create a sustainable competitive advantage for the European steel sector.

The next paradigm in commodities: Trade houses vs banks

Posted on 16 October 2014

Agri-business services are dominated by two industries: First, trade houses provide services that vertically integrate from farmers to consumers. Second, financial institutions horizontally integrate the value chain by facilitating an efficient transfer of capital. There is a sweet spot where these two industries intersect in their service offerings: Risk management and Trade financing.

Commodities Sink to Five-Year Low Led by Metals Declines

Posted on 16 October 2014

Commodities dropped to a five-year low on growing concern that slower economic growth will cool demand in China, the world’s top consumer of metals, grains and energy. The Bloomberg Commodity Index (BCOM) of 22 raw materials fell as much as much as 1.3 percent yesterday to the lowest since July 2009. Copper futures dropped by the most since March on the Comex, while hog prices posted the biggest loss in 25 months.

Investors cooling towards commodities

Posted on 16 October 2014

Investors have been showing a more negative sentiment towards commodities in the past few weeks, ETF Securities has found. In its latest 10-page research note, the exchange-traded fund provider also noted that improvement in the US economy and labour market should benefit cyclical assets.

Flat commodities may be investors’ chance

Posted on 16 October 2014

The drop in the iron ore, oil and coal prices has spooked the local market, prompting a selloff of local resources businesses. While the outlook for these commodities remains subdued, this could prompt buying opportunities if shares whose prices are affected by movements in commodity prices continue to fall.

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.

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