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Commodity Shipping Measure Falls to 28-Year Low on China Demand

Posted on 30 January 2015 by VRS  |  Email |Print

A measure of global shipping costs for commodities fell to a 28-year low as slowing growth in China’s demand for cargoes compounds the effect a fleet glut. The Baltic Dry Index plunged 5.1 percent to 632 points, the lowest since Aug. 22, 1986, according to data from the Baltic Exchange in London on Thursday. Freight rates for all the vessel types within the measure declined.
China, the world’s biggest buyer of of coal and iron ore, will increase imports of the two commodities by 6 percent this year, down from a growth rate of 8.7 percent in 2014, according to estimates from Clarkson Plc, the world’s largest shipbroker. The nation’s economic expansion this year will be the slowest since 1990, the average of 67 economists’ forecasts compiled by Bloomberg shows………………………………………..Full Article: Source

Commodities, Geneva and the Swiss franc

Posted on 30 January 2015 by VRS  |  Email |Print

Bunge, the international agricultural trader, is closing its sugar and ethanol operations in London and moving them to Geneva, the home of its grain trading hub. Its decision is counterintuitive, especially at a time when the jump in the currency after the Swiss ditched their franc cap has pushed.
Bunge says the move will “improve efficiency and further integrate with our core trading businesses”, and there are worse places in the world to work. Commodities traders have a long history in Switzerland, especially in Geneva. Easy access to finance, low taxes and relatively light regulation have made it a good place to do business………………………………………..Full Article: Source

Why the OPEC Secretary General Believes Oil Prices Have Bottomed

Posted on 30 January 2015 by VRS  |  Email |Print

Nowadays, you’ll find plenty of predictions about the future direction of oil prices. But some are worth paying particular attention to. On Monday, Abdullah al-Badri, the Secretary-General of OPEC, said that he expects oil prices to bottom out around current levels. He would know as well as anyone. That said, what makes US$45 per barrel such a logical bottom for oil prices? Is there a risk that prices could fall lower? And how should you react as an investor?
There are reasons to believe the Secretary-General. With such low prices, producers have already been cutting back. According to oil services giant Baker Hughes, the number of oil rigs fell for the seventh straight week, and is now at its lowest level since January 2013………………………………………..Full Article: Source

Goldman puts end date on commodities slump

Posted on 29 January 2015 by VRS  |  Email |Print

The light at the end of the tunnel for commodities may be but one year away. Goldman Sachs is sceptical that there will be any gains for commodities over the next three months, but is much more optimistic there will be gains over the next 12 months. In the short-term, things could get worse.
“Despite the large declines in commodity prices, we see risks as still skewed to the downside over the near-term,” Goldman Sachs advised. Much is down to oil. The plunge in oil prices will weigh on investment indexes based on commodities in the short-term. Until oil settles or starts to rise, there will be downward pressure in copper and gold markets, according to the bank………………………………………..Full Article: Source

China insolvencies to hit commodities

Posted on 29 January 2015 by VRS  |  Email |Print

Insolvencies are to increase in China, Hong Kong and Taiwan this year, with traders facing greater challenges than ever in accessing finance. Euler Hermes, the Paris-based trade credit insurance provider, warned that it expects the number of Chinese companies filing for bankruptcy to increase by 5% in 2015, with a similar rise predicted in Hong Kong.
“The credit conditions are already tight, especially for any projects financed by non-bank institutions. The regulatory bias is likely to be towards tightening further to contain financing risk,” the company’s senior economist for Asia, Mahamoud Islam, tells GTR………………………………………..Full Article: Source

Former US Official Says OPEC Can No Longer Control Oil Price

Posted on 29 January 2015 by VRS  |  Email |Print

The Organization of the Petroleum Exporting Countries (OPEC) can no longer control the oil price, as there are new independent markets, such as those in Russia and the United States, Charles McConnell, a former Obama administration energy official told RIA Novosti.
“Forty years ago they [Middle Eastern oil producers] formed a cartel. And they controlled the price, and the entire world was dependent. And control from the Middle East is no longer true. The world has changed — Russia has and produces significant volumes of oil, as does the US and Canada,” he stated………………………………………..Full Article: Source

Commodities collapse could wipe out entire year’s profits at Standard Chartered

Posted on 29 January 2015 by VRS  |  Email |Print

Macquarie analysis predicts that 1980s-style oil price slump and default spike will mean huge losses at under-pressure bank. Standard Chartered faces losing a year’s profits from the recent collapse in commodity prices as loan defaults spike in a repeat of the 1980s crisis, according to the Australian bank Macquarie.
The Asia-focused British bank is believed to be one of the biggest losers from the slump in oil, iron ore and copper prices, with $61bn (£40.2bn) of exposures to producers and traders………………………………………..Full Article: Source

China commodity trade data show winners are scarce: Russell

Posted on 28 January 2015 by VRS  |  Email |Print

China’s detailed commodity trade figures for 2014 do much to confirm that the trend has changed to higher import volumes being dependent on lower commodity prices, but there are a few notable exceptions.
Major commodities such as crude oil, iron ore and copper all showed increased imports on the back of falling prices, illustrating the changed dynamic in commodity markets whereby supply became the dominant driver of prices………………………………………..Full Article: Source

Copper slips to new five-year low

Posted on 28 January 2015 by VRS  |  Email |Print

Copper futures have closed significantly lower on the London Metal Exchange with the release of worse-than-expected economic data out of the US sending prices tumbling to near five-and-a-half-year lows. The LME’s three-month copper contract was down 2.8 per cent at $US5,425.00 a metric tonne at Tuesday’s PM kerb close - having been down almost three per cent at an intra-day low of $US5,418.00 a tonne.
Copper prices plunged again as sellers came back into the market thanks to an apparent growth slowdown to come in the US, according to Jasper Lawler, a market analyst at CMC Markets………………………………………..Full Article: Source

Commodities? Brazil Iron-Ore Startup Says Cosmetics a Better Bet

Posted on 28 January 2015 by VRS  |  Email |Print

Things are so bad for mining projects in Brazil that startup All Ore Mineracao SA (AORE3) is changing its line of business for something more glamorous: cosmetics. All Ore, whose 2009 listing made it the last iron-ore company to start trading on the Sao Paulo stock exchange, said it’s abandoning commodities to focus instead in the beauty and health-care market.
The company, which hadn’t yet started operations at iron-ore and gold projects in northern Brazil, will buy a cosmetic producer and change its corporate purpose, it said in a regulatory filing Tuesday. Investors approved. Shares jumped as much as 70 percent………………………………………..Full Article: Source

Opec’s Badri expects some oil price rebound soon

Posted on 27 January 2015 by VRS  |  Email |Print

Oil prices at current levels may have reached a floor and could move higher very soon, Opec Secretary-General Abdullah al-Badri said on Monday. “Now the prices are around US$45-US$55 and I think maybe they reached the bottom and will see some rebound very soon,” Mr Badri said in an interview.
Asked about the prospects for Saudi Arabian oil policy under a new king, Mr Badri said: “Saudi Arabia is a stable country, is a stable government, and I think things will be normal.”……………………………………….Full Article: Source

Goldman Sachs: Coal hits ‘retirement age;’ IEA disagrees

Posted on 27 January 2015 by VRS  |  Email |Print

If Vegas bookmakers were taking bets on whether Gateway Pacific Terminal would be built, the odds would have been getting longer in the past few months. Earlier this month came the ostensible bombshell that opponents of SSA Marine’s proposed coal terminal at Cherry Point have been waiting for: A clear request from Lummi Nation to the U.S. Army Corps of Engineers to deny a federal permit for the terminal.
Case history has been favorable to Indian tribes, and Lummi Nation in particular, when it comes to protecting the traditional fishing grounds granted by treaty. In November, a financial expert from an organization that seeks to wean the world off coal told a Bellingham audience the end was near for the fossil fuel. ……………………………………….Full Article: Source

Gold Eases as Greece Uncertainty Fades

Posted on 27 January 2015 by VRS  |  Email |Print

Gold prices fell Monday, as investors took profits on the metal’s recent rally after a victorious antiausterity party in Greece didn’t appear inclined to take the country out of the eurozone. Gold for February delivery, the most actively traded contract, closed down $13.20, or 1%, at $1,279.40 a troy ounce on the Comex division of the New York Mercantile Exchange.
Prices hit $1,307.80 an ounce last week, their highest level since August, in part on worries that if the leftist Syriza party won Sunday’s election, party leaders would want Greece to exit the eurozone. Some investors like to shift their money to gold in turbulent times………………………………………..Full Article: Source

Japanese aluminum stocks hit all-time high, putting pressure on prices

Posted on 27 January 2015 by VRS  |  Email |Print

Aluminum stocks had risen to 413,000-419,900 mt in Japan, which is an all-time high, putting pressure on local prices as some companies want to destock before March, the end of the Japanese financial year, market sources said Monday, January 26. Aluminum stocks at three main Japanese ports had swollen by the end of December, according to trading house surveys.
Some recent buy tenders settled low as a result, traders said. Two Japanese consumers were seeking 500-1,000 mt lots via tender last week, traders said. They were seeking deliveries into Nagoya and Yokohama………………………………………..Full Article: Source

OPEC is in for long war with US shale producers

Posted on 26 January 2015 by VRS  |  Email |Print

It is in the interests of the Organisation of the Petroleum Exporting Countries to slow that process. The situation is analogous to chemotherapy: OPEC hopes low oil prices will curtail shale before they destroy its own finances. That explains why the death of Saudi Arabia’s King Abdullah is unlikely to mean a shift in strategy. But OPEC could be in for a longer struggle than many expect.
Oil’s collapse is affecting drilling. By Friday, the US rig count had fallen by 15 per cent since its most recent peak in September, according to Baker Hughes. Meanwhile, surveying 50 North American exploration and production companies that have ­issued guidance so far, Tudor, Pickering, Holt & Co finds their aggregate capital expenditure budget for 2015 is about a third lower than last year………………………………………..Full Article: Source

Best and worst commodities in 2014

Posted on 23 January 2015 by VRS  |  Email |Print

Commodities are hugely cyclical as is all too evident at the moment, with oil and metal prices in steep decline. A look at what did well in 2014 and what didn’t reveals how fortunes change and unearths a number of surprises. Website Visual Capitalist has run an infographic illustrating the annual returns for all commodities last year - the Periodic Table of Commodity Returns - with accompanying comment.
First, the two worst performers in 2014 were the two best performers the previous year: oil and natural gas. This speaks to the short-term volatility of commodities, as well to the fact that investors need to be looking to the long term. While something may swing up and down in a short time horizon, in the long term it may prove to fulfill the investment thesis based on supply and demand fundamentals……………………………………….Full Article: Source

OPEC Will Blink in Battle With U.S. Shale Drillers, Poll Shows

Posted on 23 January 2015 by VRS  |  Email |Print

U.S. shale drillers won’t scale back output quickly enough for OPEC to avoid production cuts this year, according to a quarterly poll of Bloomberg subscribers.
Forty-nine percent of analysts, traders and investors surveyed said the Organization of Petroleum Exporting Countries will have to lower its production target this year, while 34 percent said shale drillers will lower output in time. Seventeen percent weren’t sure………………………………………..Full Article: Source

Gold Prices Get a Boost While Oil Spirals Downwards

Posted on 23 January 2015 by VRS  |  Email |Print

Gold’s relationship to oil has been turned on its head. Investors who saw little value in the metal last month, as plunging energy costs curbed inflation, have started buying in January even as crude continues to tumble. Bullion is off to its best start to a year since 1980 while West Texas Intermediate is trading near the lowest since April 2009.
The correlation between the two commodities that reached a 16-month high in December is now the weakest in five months. The about-face reflects an investor shift in focus away from the benefits of cheap fuel to the risk of economy-damaging deflation. Oil costs are so low that gold buyers are seeking a hedge against prolonged declines in consumer prices………………………………………..Full Article: Source

Is this the start of a gold bull market?

Posted on 23 January 2015 by VRS  |  Email |Print

Many strategists are saying a gold bull market has just begun, as investors crowd into the one asset that isn’t getting debased by central banks. Chart analyst point to the price breaking out of long-term resistance levels.
“The breakout above technical re-entrance levels ($1,250) has placed a new floor from which the rally is likely to continue,” said Peter Cardillo, chief market economist at Rockwell Global Capital. “We look for a climb towards to $1,325-$1,350 in the near term.”……………………………………….Full Article: Source

OPEC, oil companies clash at Davos over price collapse

Posted on 22 January 2015 by VRS  |  Email |Print

OPEC defended on Wednesday its decision not to intervene to halt the oil price collapse, shrugging off warnings by top energy firms that the cartel’s policy could lead to a huge supply shortage as investments dry up.
The strain the halving of oil prices since June is putting on producers was laid bare when non-member Oman voiced its first direct, public criticism of the Organization of the Petroleum Exporting Countries’ November decision not to cut production but instead to focus on market share………………………………………..Full Article: Source

Oman Joins Other Oil Nations Saying OPEC Decision Wrong

Posted on 22 January 2015 by VRS  |  Email |Print

Oman, the biggest Middle Eastern oil producer that’s not a member of OPEC, joined Venezuela and Iran in questioning the group’s decision to keep its output target unchanged even with crude prices falling.
Oman is having a “really difficult time” because of low oil prices, Oman’s Oil Minister Mohammed Al-Rumhy said at a conference in Kuwait City. Standard & Poor’s lowered the country’s outlook to negative from stable on Dec. 5, citing a risk that oil may drop more than expected………………………………………..Full Article: Source

Gold fifth best performing commodity of 2014

Posted on 22 January 2015 by VRS  |  Email |Print

Before you gold bulls out there cry ‘rubbish’ it should be borne in mind that last year was a disastrous year for virtually all commodities across the board. Only four internationally traded commodities showed gains over the year, while gold was the least bad negative performer among the rest with a drop of only 1.7% – but has shot up nearly 10% since the start of the year.
Indeed, as we pointed out in a recent article, gold performed positively over 2014 in virtually every currency other than the U.S. dollar. So despite being a disappointing year for dollar area gold bulls, it will have been a positive year in all non-dollar tied nations………………………………………..Full Article: Source

Commodities, Currency Commotion Brings Volatility

Posted on 21 January 2015 by VRS  |  Email |Print

Traders return from a long holiday weekend already riding a slippery slope of volatility greased by international events and uncertainty heading into the depths of earnings season. In fact, volatility is higher across many asset classes.
For starters, the CBOE Volatility Index (VIX), which tracks the implied volatility priced into S&P 500 Index (SPX) options, hit a three-week high of 23.43 Friday as the SPX was at risk of a six-day losing skid. But true to Freaky Friday form, the broader market rebounded late in the day. SPX support now lies at 2000, with resistance hovering at 2022………………………………………..Full Article: Source

IMF lowers growth outlook for commodity exporters

Posted on 21 January 2015 by VRS  |  Email |Print

The International Monetary Fund (IMF) has lowered its 2015 growth forecasts for commodity exporters, including South Africa, saying the projected growth rebound for commodity-exporting developing countries will be weaker than had been forecast in the fund’s October World Economic Outlook (WEO).
The WEO Update, released on January 20, lowered South Africa’s 2015 gross domestic product (GDP) projection to 2.1% from 2.3% in October, which was in line with the IMF’s 2014 Article IV Staff Report on South Africa released in December. The fund decreased its 2016 GDP growth projection for South Africa by 0.3 of a percentage point to 2.5%………………………………………..Full Article: Source

Oil slides as IMF cuts global growth forecast

Posted on 21 January 2015 by VRS  |  Email |Print

World oil prices fell on Tuesday after the International Monetary Fund slashed its world economic growth forecast, stoking fresh fears over the strength of global crude demand. In late afternoon London deals, Brent North Sea crude for delivery in March dropped 55 cents to US$48.29 (S$64.60) a barrel.
US benchmark West Texas Intermediate for February sank US$1.97 to trade at US$46.72 per barrel. “Oil prices fell back … dented by the global demand outlook suggested by the IMF,” said Jasper Lawler, analyst at CMC Markets………………………………………..Full Article: Source

Iran Sees ‘No Threat’ From Oil at $25 as Prices Keep Falling

Posted on 21 January 2015 by VRS  |  Email |Print

OPEC has no immediate plan to cut its output target for crude, and Iran is strong enough to withstand a deeper slump in prices even if the country must sell at $25 a barrel, Oil Minister Bijan Namdar Zanganeh said.
“If the oil prices drop to $25 a barrel, there will yet again be no threat posed to Iran’s oil industry,” Zanganeh told reporters on Jan. 19 at a conference in Tehran, according to the state-run Fars news agency………………………………………..Full Article: Source

How to benefit from commodities in 2015

Posted on 20 January 2015 by VRS  |  Email |Print

Probably every investor knows that the worst performing commodity in 2014 was Brent which lost 48.08% of its value. However, what many investors do not know is that the best performing commodity last year was coffee which returned 37.74%. The reason was that Brazil (which is the world’s biggest producer of coffee) suffered a severe drought which threatened this year’s crop.
Subsequently traders drove the price of coffee higher in the expectation of a shortage. Investors are now interested to know which commodity could generate attractive returns in 2015 now that that a potential shortage in coffee is priced in and the oil price is expected to remain in bear market territory, at least for the short term………………………………………..Full Article: Source

Tough Times Ahead For Commodities After Harsh Shakeout

Posted on 20 January 2015 by VRS  |  Email |Print

After one of the worst years in memory for commodity funds, even the few managers who found a way to make money last year say they expect a difficult start to 2015. Collapsing oil and grain prices caused havoc for commodity funds in 2014, with the average actively managed fund in the Lipper Global Commodity sector losing 14.35 percent. Big names abandoned the field altogether, and investors redeemed billions.
A handful of managers were nevertheless able to exploit the sudden mid-year surge in volatility and the fall in prices. But even they expect a difficult 2015 with pressure on prices to fall further………………………………………..Full Article: Source

LBMA top gold forecaster: gold price to average $1,321 in 2015, silver $18.56

Posted on 20 January 2015 by VRS  |  Email |Print

LBMA’s top gold forecaster over the years, Sharps Pixley’s Ross Norman, is bucking the analyst consensus with a $1,321 average gold price forecast for 2015. Silver $18.56, Platinum $1,268, Palladium $876.
In his submissions to this year’s LBMA precious metals forecasting competition, Ross Norman who heads up London bullion broker Sharps Pixley, and who has been probably the most successful forecaster in the LBMA panel in the past, says he is going out on a limb with his forecast for the gold price average this year at $1321………………………………………..Full Article: Source

Copper Finds a Friend in Morgan Stanley

Posted on 20 January 2015 by VRS  |  Email |Print

It’s when you’re down that you know who your friends are. Copper’s sharp decline to a five-and-a-half-year low on Wednesday prompted an outflow of negative sentiment. Furthermore, in the wake of oil prices slipping lower, some market participants have been comparing the trajectory of the red metal with that of black gold.
Others, however, are standing by the metal. “We were surprised by last week’s 6% correction in copper, but with no evidence of impaired trade or a collapse in demand, we remain bullish on the copper outlook,” said Morgan Stanley in a research note………………………………………..Full Article: Source

Drought, Floods and Cold Save a Few Commodities From Rout

Posted on 19 January 2015 by VRS  |  Email |Print

Commodity investors at least have the weather on their side. While most raw materials are mired in bear markets, from oil to nickel to corn, cold spells and droughts are fueling a few rallies. The promise of a deep freeze last week in the U.S. sent natural-gas futures to their biggest gain in 11 months. Dry weather in Brazil, the top grower of coffee and sugar cane, sparked advances for both crops. Unusually heavy monsoon rains in Malaysia sent palm oil to the highest since July.
“The weather is always unpredictable and a wild card,” Donald Selkin, the chief market strategist at New York-based National Securities Corp., which oversees $3 billion, said in a telephone interview Jan. 16. “These products are marching to their own tune — for now.”……………………………………….Full Article: Source

Saudis Kept Oil Exports at 7-Month High as OPEC Met

Posted on 19 January 2015 by VRS  |  Email |Print

Saudi Arabia’s oil exports rose to a seven-month high in November when it led OPEC to keep production unchanged as the largest crude shipper fought to keep market share with output rising from the U.S. to Russia.
Saudi Arabia’s oil exports rose to 7.3 million barrels a day from 6.9 million barrels in October, according to data yesterday on the website of the Joint Organisations Data Initiative. Crude stockpiles at the end of the month stood at 305.8 million barrels, the highest level since at least January 2002, figures on the group’s website showed………………………………………..Full Article: Source

December Sees Further Consolidation in Commodity Markets

Posted on 16 January 2015 by VRS  |  Email |Print

Commodities were lower in December, largely characterized by fundamental factors, according to Credit Suisse Asset Management. The Bloomberg Commodity Index Total Return performance was negative for the month, with 16 out of 22. Index constituents trading lower. Credit Suisse Asset Management observed the following: Energy was the worst performing sector, down 22.06%, led lower by Natural Gas.
Crude oil and petroleum products also declined due to increasing production amid expectations for weaker oil demand growth. Livestock declined 4.84%, led lower by Lean Hogs, as cheaper feed costs allowed farmers to achieve heavier hog weights, which increased pork supply expectations throughout the period. Industrial Metals ended the period 4.34% lower. Weak economic data out of China, including lower-than-expected Industrial Production data for November, heightened demand concerns for base metals. (Press Release)

Opec claims first blood in oil war with US frackers

Posted on 16 January 2015 by VRS  |  Email |Print

Oil production growth outside Opec seen to slow this year as Opec price takes its toll on US shale frackers. Opec has given the first indication that it may be winning its price war with US shale oil producers as it now forecasts that growth production outside the cartel will slow this year.
The 12-member Organisation of the Petroleum Exporting Countries (Opec) said in its latest market report that producers outside the group will pump additional 1.28m barrels per day (bpd) in 2015, which represents a downward revision of 800,000 bpd from its previous estimate………………………………………..Full Article: Source

Gold Demand Seen Expanding 15% by HSBC on Asia-to-ETP Buying

Posted on 16 January 2015 by VRS  |  Email |Print

Gold demand will rebound in 2015 as bullion consumption in Asia increases and investors return to exchange-traded products backed by the metal, according to HSBC Securities (USA) Inc.
Global demand may rise 15 percent to 4,127 metric tons this year, analysts James Steel and Howard Wen wrote in a report dated Jan. 14. Consumption reached a record 4,582.3 tons in 2011, when prices climbed to a peak of $1,921.17 an ounce, according to data from the World Gold Council………………………………………..Full Article: Source

Will Silver Turn Things Around in 2015?

Posted on 16 January 2015 by VRS  |  Email |Print

Silver had a tough 2014. Prices peaked around $22 last February, and except for a couple of stronger months over the summer, silver was mostly in a downward trend to end the year under $16.
As 2014 came to a close, so did the weakness in silver prices that had been plaguing the market for the last few months. Shares of many silver-related stocks were priced for a disaster. The new year is still young, but silver prices have bucked the weakness in oil and moved higher in the first few weeks of 2015………………………………………..Full Article: Source

Investors Get Commodities Super-Slump Jitters

Posted on 15 January 2015 by VRS  |  Email |Print

From super cycle to super slump. Europe’s top mining companies and steel makers bore the brunt of heavy selling on stock markets Wednesday as the renewed slump in commodity prices caught investors off guard amid an increasingly bearish outlook for global economic growth.
Slowing demand for raw materials like iron, copper, coal, nickel, and steel as well as oil—all the life blood of global industry–are making investors reassess the earnings and dividend prospects across the resources sector. With oil prices falling further below $50 a barrel, copper prices, in particular, fell sharply late Tuesday and Wednesday, ensnaring other commodities in their wake………………………………………..Full Article: Source

Commodities Sink To 12-Year Low as Copper, Oil Slump

Posted on 15 January 2015 by VRS  |  Email |Print

Commodities slumped to a 12-year low, led by the biggest plunge in copper since 2011, after a report from the World Bank fanned concerns of a global economic slowdown.
Copper futures for March delivery tumbled five percent to $2.5125 a pound as of 11:45 a.m. in New York, set for a fourth day of losses. Nickel erased more than 2 percent, while oil reversed earlier declines, with West Texas Intermediate trading little changed at $45.88 a barrel……………………………………….Full Article: Source

‘Crude’ Dismantling of The Commodities Supercycle

Posted on 15 January 2015 by VRS  |  Email |Print

It has barely been a few weeks into the new trading year and the Brent front month oil futures contract is already down by over 11% on its opening level for 2 January. Together with the WTI and OPEC basket of crude oil, the global proxy benchmark is well below $50 per barrel with airwaves and internet forums full of chatter about new “six-year lows.”
In more ways than one, the sense of false shock and horror expressed by some commentators is mildly amusing. Saudi pricing strategy coupled with leading oil producers pumping out more and more of the crude stuff have made yet newer record lows all but inevitable until a supply correction kicks in at some point around the midway point of this year………………………………………..Full Article: Source

A guide to the inner workings of Opec

Posted on 15 January 2015 by VRS  |  Email |Print

Opec was founded in 1960 to help governments gain a bigger share of revenue from oil production in their own countries. At the time, the oil companies in places such as Saudi Arabia and Venezuela were owned by the oil majors – for example, Shell, Exxon and BP. The dominant global producer of oil was Texas, and its ability to produce unlimited volumes enabled the international oil companies to drive hard bargains with the governments of the countries which would ultimately come to form Opec.
Opec was intended as a counterweight to Anglo-American dominance. For the exporting countries, the early decades of Opec were scrappy – a fight against far better financed, politically connected and technologically sophisticated western oil companies………………………………………..Full Article: Source

Copper takes a beating – but it may be a panic reaction

Posted on 15 January 2015 by VRS  |  Email |Print

Fears grow over global economic health as copper leads a commodities sell-off after the World Bank cuts growth forecasts. Copper prices, seen as a barometer of industrial demand around the world, plunged to a five-and-a-half low on Wednesday as fears grew over the health of the global economy.
Amid a wider commodities sell-off the metal was down more than 8% at one point at $5,353.25 (£3,531.38) a tonne – a level last seen during the depths of the financial crisis in July 2009………………………………………..Full Article: Source

The Commodity Super-Cycle Wasn’t So Super

Posted on 14 January 2015 by VRS  |  Email |Print

Last year on numerous occasions, I argued that the commodity super-cycle wasn’t so super. It lasted roughly 10 years. It started when the CRB raw industrials spot price index (which does not include petroleum) troughed at 214 on November 5, 2001, coinciding with China joining the World Trade Organization on December 11 of that year.
It rose 198% to peak at 638 on April 11, 2011. It dropped sharply that year and has been range-bound between approximately 500-550 since then. On Friday, it was down to 490, which may signal a breakdown………………………………………..Full Article: Source

Investors go long gold, short copper in oil freefall

Posted on 14 January 2015 by VRS  |  Email |Print

Gold has extended gains to climb to its highest level since last October as investor demand for safe havens is on the rise as the price of oil continues its tail-spin.
New data on gold positioning shows investors are increasing their long positions, or bets that the yellow metal will increase in price, with gold net longs at peaks not seen since August last year according to UBS………………………………………..Full Article: Source

Global Economic Prospects to Improve in 2015, But Divergent Trends Pose Downside Risks, Says WB

Posted on 14 January 2015 by VRS  |  Email |Print

Following another disappointing year in 2014, developing countries should see an uptick in growth this year, boosted in part by soft oil prices, a stronger U.S. economy, continued low global interest rates, and receding domestic headwinds in several large emerging markets, says the World Bank Group’s Global Economic Prospects (GEP) report.
After growing by an estimated 2.6 percent in 2014, the global economy is projected to expand by 3 percent this year, 3.3 percent in 2016 and 3.2 percent in 2017 [1], predicts the Bank’s twice-yearly flagship. Developing countries grew by 4.4 percent in 2014 and are expected to edge up to 4.8 percent in 2015, strengthening to 5.3 and 5.4 percent in 2016 and 2017, respectively………………………………………..Full Article: Source

Commodities Drop to 12-Year Low as Oil Slumps Amid Global Glut

Posted on 13 January 2015 by VRS  |  Email |Print

Commodities fell to a 12-year low on concern that the global surplus in crude oil will continue, while slowing economic growth in China and Europe means less demand for raw materials.
The Bloomberg Commodity Index (BCOM) of 22 energy, agriculture and metal prices dropped as much as 1.6 percent to 101.95, the lowest since November 2002. In 2014, the gauge declined 17 percent, the most since the global financial crisis in 2008. The measure rose to a record in July 2008, more than doubling from the start of 2000………………………………………..Full Article: Source

Gold glistens in commodities gloom

Posted on 13 January 2015 by VRS  |  Email |Print

Questions abound over just what is going on with gold. Concerns about deflation and slowing global growth do not necessarily augur well for the precious metal. Nor does a strengthening US dollar, which has an historic tendency to dent all commodities on the way up. Gold, however, is proving remarkably resilient.
It has maintained its grip on US$1,200 an ounce and, in euro terms, has just broken above resistance that built last year at €1,000 (HK$9,185). In the near term, gold now looks overstretched, but from a medium-term view, gold’s relative momentum within the commodity universe has become markedly more positive………………………………………..Full Article: Source

StanChart faces $4.4 billion commodities hit, may need to raise cash - analysts

Posted on 13 January 2015 by VRS  |  Email |Print

Asia-focused bank Standard Chartered could need $4.4 billion (2.9 billion pounds) of extra provisions to cover losses from commodities loans, potentially forcing it to raise billions of dollars from investors, analysts said on Monday.
Credit Suisse analysts said the losses could force Standard Chartered to raise $6.9 billion to improve its core capital ratio to 11 percent by the end of the year. “We think the needed provisioning could be large enough to require further capital measures, such as further equity raisin, and/or dividend reductions,” analyst Carla Antunes-Silva said in a note………………………………………..Full Article: Source

Soft outlook for commodities in 2015: Analysts

Posted on 12 January 2015 by VRS  |  Email |Print

2015 looks to be a somewhat lacklustre year for commodities - global demand remains weak while an appreciating US dollar makes them more expensive. Palm oil prices are being supported by a supply shock, but analysts said they expect prices to follow in trend with other commodities.
With China’s growth on a moderating trend, global demand for commodities appears to be softening. Analysts said this, coupled with a supply glut - particularly in crude oil - would keep commodity prices low in the near-to-mid term………………………………………..Full Article: Source

Venezuela’s Maduro seeks support from Saudi Arabia on oil prices

Posted on 12 January 2015 by VRS  |  Email |Print

Venezuelan President Nicolas Maduro met Saudi Arabia’s Crown Prince Salman in Riyadh on Sunday as part of a diplomatic tour of OPEC members to discuss falling oil prices, which have hit its economy hard.
The Saudi side in the meeting included Oil Minister Ali al-Naimi and several princes including Deputy Crown Prince Muqrin, intelligence chief Prince Khaled bin Bandar and three sons of King Abdullah, who is in hospital, state media reported………………………………………..Full Article: Source

Will The Gold To Silver Ratio Peak In 2015?

Posted on 12 January 2015 by VRS  |  Email |Print

Both gold and silver have been under selling pressure for a majority of the past few years. However, last year, silver prices were hit much harder than gold prices. In fact, gold was down just over one percent on the year while silver fell nearly 20 percent. This got me thinking about the gold to silver ratio (price per ounce of gold divided by price per ounce of silver).
Silver’s underperformance in 2014 is pretty glaring. And this acceleration has pushed the gold to silver ratio toward an extreme. Based on the chart below, it is likely that silver will begin to outperform gold at some point in 2015. This is due to the Relative Strength Index (RSI) of the ratio nearing a point where a reverse in trend has occurred in the past………………………………………..Full Article: Source

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