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VRS - who has written 46083 posts on Opalesque Commodities Briefing.


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Federal election 2016: Greg Hunt denies carbon tax by stealth

Posted on 25 May 2016

New safeguard measures to boost the Coalition’s Direct Action plan on climate change are not an emissions trading scheme or carbon tax by stealth, Environment Minister Greg Hunt says.

Falling Commodity Prices Weigh on Asia Resources Stocks

Posted on 24 May 2016

Declining commodity prices weighed on Asia’s resource stocks Monday, while the Japanese share market slipped amid a lack of major consensus from the Group of Seven meetings between finance ministers and central bankers.

Commodities on the rise?

Posted on 24 May 2016

Are commodities finally on the rise after years of being in the doldrums? We would all agree that prices in the grocery store continue to rise on many things, but commodity tracking indexes show quite a different story.

Commodities Prices Will Remain Low For Some Time, Here’s Why

Posted on 24 May 2016

The oil price is recovering. As I wrote in previous pieces, low oil prices are a cure for low oil prices. This is because energy is the foundation of economic activity. Cheap energy is great, but the principle of the ‘greedy algorithm’ where grabbing as much as you can is the way to prosper means it can’t stay extremely cheap for very long.

Defaults Have Already Spread Outside Commodities

Posted on 24 May 2016

Bond investors appear to have placed their faith in commodities exceptionalism, with many positing that the recent pick-up in U.S. default rates will defy historical trends and remain confined to that industry.

Oil will soon stage a ‘fundamental price recovery’: Analyst

Posted on 24 May 2016

Supply outages and growing demand from China mean crude prices will come into “much better balance” in the next few months, an energy analyst told CNBC. Jefferies’ Jason Gammel told CNBC on Monday the oil market had swung from oversupply to undersupply in April thanks to disruptions in production in Nigeria and Alberta, Canada, taking around 2 million barrels per day out of the market.

The oil market’s biggest problem is still far from solved

Posted on 24 May 2016

The worst of the crude oil supply glut may not be over. In the last few weeks, sentiment about the oil market has improved. This happened, in part, after supply disruptions hit Nigeria and Canada. Additionally, Goldman Sachs analysts said the imbalance between supply and demand may be correcting faster than they had expected.

The Market May Crowd Out the OPEC Cartel

Posted on 24 May 2016

Daniel Yergin’s excellent “Where Oil Prices go From Here” (op-ed, May 16) suggests that shale-oil production in the U.S. will increase once the world’s crude-oil supply and consumption return to balance later this year. This is a very optimistic scenario as it is unlikely that the Saudis will reverse their production policy.

What Does The Next OPEC Meeting Have In Store?

Posted on 24 May 2016

The next OPEC meeting on the 2nd of June will act as little more than a forum for continued altercations between Saudi Arabia and Iran. The 2 June 2016 OPEC meeting will be held amid a backdrop of oil prices near $50 per barrel, a sharp drop in Nigerian production due to sabotage, turmoil in Venezuela, Saudi Arabia operating with a new oil minister, and Iran aggressively pumping close to pre-sanction levels.

Jim Rickards makes the case for gold at $10,000 US an ounce

Posted on 24 May 2016

Gold is often seen as a safe investment in times of economic uncertainty, and prominent investors, such as George Soros, are placing big bets on the precious metal. Gold prices of have been surging lately and gold stocks are among the top performers in 2016.

This could send gold tumbling below $1,000 again, Citi says

Posted on 24 May 2016

Investors could be forgiven for not being able to recall the last time gold prices traded below $1,000-an-ounce, considering they’d have to scroll back to September 2009 before running into that level. But don’t think gold is so far removed from that sub-$1,000 level that it can’t revisit that nadir in short order, warned analysts at Citigroup in a note on Monday. And they said it’s all about the dollar.

Avoid gold until Fed moves: Gartman

Posted on 24 May 2016

Owning the metal in dollars will be for the brave until the US central bank pulls the interest rate trigger, the respected US investor says. Those trading gold should probably do it in something other than dollars while the theme of higher US rates plays out.

Asia alumina: Buyers dragged down by Chinese output, LME aluminum

Posted on 24 May 2016

The Platts Australian alumina daily assessment fell 50 cents/mt Monday from last Friday to be assessed at $258.50/mt FOB, netting a $2.50/mt decline in the last week. India’s Nalco awarded a sell tender at $258.50-$258.75/mt FOB Visakhapatnam to Vitol for a 30,000 mt alumina parcel scheduled to load between June 3 and 7, sources close to the trade said. The deadline for bids was May 18 with bids required to be valid until May 20.

The ETF Hedge That’s Lost Its Edge

Posted on 24 May 2016

Currency-hedged ETFs are intended to be the solution to a problem that’s always existed, but really wasn’t on most investors’ radar until recent years—that of the impact of currency on foreign security returns. Currencies are known as one of the most difficult markets to time, and an asset that’s practically impossible to forecast. That’ll never change.

Investors Embrace This ETF To Fight Inflation

Posted on 24 May 2016

Last week, the federal government reported that the core Consumer Price Index in April rose by 2.1% year-over-year, above the Federal Reserve’s 2% target. There has been a recent string of reports that inflation is creeping higher.

Fund Selector: Is the risk worth the reward?

Posted on 24 May 2016

My interest in commodities was recently piqued after receiving some emails from well-meaning individuals within the fund sales community, pointing out that their commodity funds were, by far, the best performing funds year to date and I should, of course, be assessing these portfolios.

A Rare Look Inside China’s Central Bank Shows Slackening Resolve to Revamp Yuan

Posted on 24 May 2016

Behind closed doors in March, some of China’s most prominent economists and bankers bluntly asked the People’s Bank of China to stop fighting the financial markets and let the value of the nation’s currency fall.

HKEX Gets Approval to Launch Four New Renminbi Currency Futures

Posted on 24 May 2016

Euro, Japanese yen, United States dollar, and Australian dollar futures will be launched against the Chinese renminbi (CNH or offshore RMB) by Hong Kong Exchanges and Clearing (HKEX) which today announced that it received regulatory approval to offer the four new RMB currency futures set to go live on May 30th, 2016.

State AGs call on EPA to stop working on stayed climate rules

Posted on 24 May 2016

Several states say the Environmental Protection Agency’s continued work on implementing climate rules for power plants, despite a Supreme Court stay, is bordering on the edge of violating the law.

Is the UK really racing ahead of Europe with its climate and clean energy policies?

Posted on 24 May 2016

Despite claims UK is hampering its competitiveness by adopting overly ambitious climate policies, new ECIU report argues UK performance is “distinctly average” compared to EU neighbours.

Are Weak Commodities Prices the New Normal?

Posted on 23 May 2016

Along with an increasingly optimistic outlook for commodities, especially for coal and base metals, this has led to some analysts claiming that both stocks will continue to rally. In fact, some analysts have gone as far as to claim that Teck’s price could even double over the course of 2016, making now the optimal time to invest. While there have been some positive developments for both companies and other mining stocks, the outlook is not as rosy as some analysts would have you believe.

Greenback To Pressure Commodities

Posted on 23 May 2016

The US dollar will now be the major driver for commodity prices after last week’s rather blatant move by the US Federal Reserve to return a rate rise to centre stage. While an increase is possible at next month’s Fed meeting, the July and September meetings look more likely candidates.

India Inc Modified?

Posted on 23 May 2016

While the Modi government had its hits and misses, India Inc has found the going quite tough over the last two years. This was mainly due to several external factors. One, slowing global growth resulted in exports consistently trending lower. This impacted sectors such as information technology, pharmaceuticals and auto and auto component makers.

Energy Expert Says Oil Prices Won’t Top $100 a Barrel

Posted on 23 May 2016

Following a stunning decline, oil prices have clawed back near the $50 level this year. Production boomed in the U.S. but is now slumping. Globally, OPEC is in disarray and major producers can’t agree on steps to boost prices. Daniel Yergin is the vice chairman of research firm IHS Inc. He has written two books on energy, including the Pulitzer-winning opus “The Prize: The Epic Quest for Oil, Money and Power,” which is essential reading for anyone interested in the subject.

Tom Ward: The ‘dirty little secret’ about $50 oil

Posted on 23 May 2016

Chesapeake Energy co-founder Tom Ward said Friday that oil prices need to recover to about $75 a barrel in order for most drillers to ramp up production. Crude futures have recently approached $50 a barrel after rebounding more than 80 percent from this year’s lows in the mid-$20 range.

Iran Won’t Freeze Oil Output Before OPEC Meeting

Posted on 23 May 2016

Iran, which is due to meet with OPEC partners on June 2, has no plan to join any freeze in crude output as the country won’t be done ramping up oil exports to pre-sanctions levels before the second half of the year, the head of the state oil company said.

Kuwait wants Iran in oil freeze deal

Posted on 23 May 2016

Kuwait said on Friday that it is in favor of signing an agreement to freeze oil production at the OPEC summit in early June, but emphasized that such an agreement will be impossible without the participation of Iran.

OPEC Set for Another Meeting With No Deal After Doha Failure

Posted on 23 May 2016

After failing to reach an accord on oil supply in Doha last month, OPEC is poised to go another meeting with no agreement on how much crude to produce. All but 1 of 27 analysts surveyed by Bloomberg said the Organization of Petroleum Exporting Countries won’t set an output target on June 2, as it sticks with Saudi Arabia’s strategy to squeeze out rivals including U.S. shale drillers by pumping near-record volumes.

How The U.S. Dollar Influences Oil Prices

Posted on 23 May 2016

Crude oil has reached a critical technical level, which is likely to test the resolve of the bulls to push prices higher. The bulls have a favorable tailwind with production outages reducing the supply glut. Till about two weeks ago, the drop in the U.S. dollar was also supportive of the crude oil prices, but since then, the dollar has recovered, putting pressure on the crude oil prices.

Gold Fever: Why Investors Rush to Buy Gold

Posted on 23 May 2016

Demand for gold rose by 21 percent in the first quarter of 2016. Recently, billionaire George Soros invested nearly $390 in gold stocks, having decreased investments in other assets. Shortly after, large hedge-funds followed the example of the legendary US investor.

Why gold makes sense for investors

Posted on 23 May 2016

The price of gold rose more in the first quarter of 2016 than during any quarter since the third quarter of 1986. As a result, should advisers be educating their clients about including this rather unique commodity as part of their investing tool box, particularly now that a variety of gold ETFs are so readily available?

When’s it safe to buy gold? After the Fed hikes, Gartman says

Posted on 23 May 2016

Something strange is happening right now in the gold market, and it has commodities investor Dennis Gartman erring on the side of caution. Gold ended Friday with its biggest weekly drop in two months, and its third straight week of losses. Conversely, the dollar saw its third straight week of gains following comments from New York Federal Reserve President William Dudley.

After the gold rush — Paul Rollinson

Posted on 23 May 2016

When Paul Rollinson took over as chief executive of Kinross Gold four years ago the end was in sight for the biggest gold boom in history — and for some of the people who were part of it. After rising 500 per cent in a decade, the market price of the precious metal had peaked. In the rush to exploit the boom, mining investments and costs had spun out of control.

Zinc on a strong footing

Posted on 23 May 2016

Zinc has outperformed other base metals with a strong 17 per cent rally so far this year. The metal’s spot price on the London Metal Exchange (LME) has now surged to $1,861 from $1,593 per tonne in December. On the domestic front, the zinc futures contract traded on the Multi Commodity Exchange (MCX) has risen 18 per cent this year.

Sluggish Chinese demand, new battery tax weighs on lead

Posted on 23 May 2016

Lead, the worst performing industrial metal on the London Metal Exchange this year, is set to stay under pressure due to weak demand in China, where a new tax has been slapped on lead-acid batteries and authorities are cracking down on electric-bikes. Lead depends on lead-acid batteries for about 80 percent of demand in top consumer China.

G-7 Shows Gaps on Currency Tactics as Leaders’ Summit Looms

Posted on 23 May 2016

Two days of talks between finance chiefs from the world’s biggest advanced economies at a hot springs resort in northern Japan were marked by some of the sharpest dissonance in years between the U.S. and Japan over exchange-rate policies.

Carbon trading fails to take root in Korea

Posted on 23 May 2016

Korean companies have rarely traded their carbon emission rights on the South Korean main bourse this year due to a weak supply, data showed Sunday. According to the Korea Exchange, the total volume of traded emission rights stood at 1.08 million tons as of Thursday, a combined figure of 113,000 Korean allowance units and 968,000 Korean credit units.

How European carbon broker’s offshore account trade may boost Chinese markets

Posted on 23 May 2016

China’s carbon markets may gain more participants after the successful closing of European carbon broker Virtuse Group’s first deal through its offshore account on Shenzhen’s emissions market, the China Emissions Exchange .

Global Economy to Slow in 2016 Amid Commodity Price Slump

Posted on 20 May 2016

The Moody’s Investors Service international credit rating agency has forecast diminishing global growth in 2016, citing the slump in commodity prices and weaker emerging market performance as the main causes of the slowdown. The G20 emerging markets’ growth will amount to 4.2 percent in 2016, down from 4.4 percent last year, while G20 developed countries are expected to grow 1.7 percent, down from last year’s 1.9 percent, the agency said.

Commodity Cycles 1970-2016: Characteristics Of A Bull Market

Posted on 20 May 2016

Commodities as an asset class experienced the 5th year of a severe bear market. But despite the performance of gold and crude, broad commodity markets didn’t attract investors’ favor. The key question investors are demanding to be answered is: which set of factors is needed to initiate a new commodity bull market in which commodity prices are not rising by 10-15% but offer the potential to double.

Chinese commodities fall on oversupply concerns

Posted on 20 May 2016

Most Chinese commodities futures fell on Thursday, amid cautious sentiment caused by a supply glut for some industrial metals and a possible U.S. interest rate hike. Some traders are concerned that China’s own interest rate easing cycle could be over, limiting the prospects for the world’s No. 2 economy and prompting investors to become bearish on commodities amid concerns on demand recovery.

Saudi Kills US Shale Oil Industry and Buys it for Pennies

Posted on 20 May 2016

The Saudi Kingdom saw American oil companies invest in the research and development of oil fields and fracking, and then crashed the market so they could scavenge US natural resources and technology on the cheap.

Oil could easily be headed back to $35 a barrel

Posted on 20 May 2016

After a long and eventful decline in prices, the crude-oil market has suddenly been experiencing the other side of the supply-demand coin, something that it has not had to deal with in a while: a bull run cobbled together from a series of unplanned supply outages.

Oil prices have probably bottomed: Woodside

Posted on 20 May 2016

Woodside Petroleum chief Peter Coleman says oil prices have probably bottomed and are likely to firm, but he doesn’t think a strong rebound is on the cards, warning prices will remain “rangebound” as gains inspire more production.

What Does The Next OPEC Meeting Have In Store?

Posted on 20 May 2016

The next OPEC meeting on the 2nd of June will act as little more than a forum for continued altercations between Saudi Arabia and Iran. The 2 June 2016 OPEC meeting will be held amid a backdrop of oil prices near $50 per barrel, a sharp drop in Nigerian production due to sabotage, turmoil in Venezuela, Saudi Arabia operating with a new oil minister, and Iran aggressively pumping close to pre-sanction levels.

OPEC strategy working as Kuwait sees oil rising to $50

Posted on 20 May 2016

OPEC’s strategy to defend market share rather than target a price is working as crude gains amid rising demand and declining output from producers including U.S. shale wells, Kuwait’s acting oil minister said.

Will oil at $50/barrel worry India?

Posted on 20 May 2016

While oil that plunged below $30 a few months ago helped India contain inflation and shrink its trade deficit, a rebound to $50 has other advantages for the world’s fastest-growing importer of crude. More cash for fuel exporters could boost global growth, lure commodity-dependent sovereign wealth funds back to emerging markets and increase demand for Indian-made goods, including petroleum products.

Huge Trend Changes Point To Something Big In The Gold Market

Posted on 20 May 2016

Very few precious metals investors realize how recent trend changes will greatly impact the gold market going forward. The reason many investors fail to grasp the huge change in the gold market is that they look at data or information on an individual basis. To really understand what is going on, we must look at how all segments of the market compare to each other… a BIRD’S EYE VIEW.

Gold Bulls Could Lead M&A Stampede

Posted on 20 May 2016

Gold producers have a new spring in their step following a rebound in the value of the precious metal, and it is an optimism that could trigger deals. The price of gold has risen more than 18% since the turn of the year, filling the coffers of producers whose balance sheets had already been strengthened by a focus on debt repayments and years of cost cutting following a downturn in prices in 2013.

Positive on precious metals, see gold at $1370 by 2017 end: ABN

Posted on 20 May 2016

Financial markets had not anticipated a rate hike in June and the US dollar has moved high while some of the commodity prices have been under pressure on the back of this news, says Georgette Boele of ABN AMRO Group.

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