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OPEC Says Shale Drillers First Affected by Oil-Price Drop

Posted on 30 October 2014 by VRS  |  Email |Print

Shale oil drillers will be hurt by the fall in crude prices before members of OPEC because their costs are higher, according to the group’s Secretary-General. As much as 50 percent of tight oil output will be “out of the market” at current prices, while the Organization of Petroleum Exporting Countries is not in a critical situation, Abdalla El-Badri said at the Oil & Money conference in London.
“First of all, will be the tight oil” affected by the drop in prices, El-Badri said. “If prices stay at $85, we will see a lot of investment, a lot of projects, a lot of oil going out of the market.”……………………………………….Full Article: Source

OPEC unable to rebalance oil markets, price to be the leveller: PIRA Energy

Posted on 30 October 2014 by VRS  |  Email |Print

NYC-based PIRA Energy Group believes that cyclical strengthening is currently underway in the global economy with the U.S. in a better position to support global growth. In the U.S., stock excess modestly widens. In Japan, crude runs ease, but crude stocks draw. Specifically, PIRA’s analysis of the oil market fundamentals has revealed the following:
World oil market forecast. Cyclical strengthening is currently underway in the global economy with the U.S. in a better position to support global growth. OPEC cannot rebalance oil markets because the surplus is too large………………………………………..Full Article: Source

PwC: US oil, gas transaction value hits 10-year high in 3Q

Posted on 30 October 2014 by VRS  |  Email |Print

Driven by a rise in billion-dollar deals, midstream activity, and interest in upstream shale plays from foreign buyers, mergers and acquisitions in the US oil and gas industry reached the highest levels in the past decade during the third quarter, according to a quarterly report from PwC US Energy Practice.
During the 3-month period ending Sept. 30, 78 oil and gas deals with values of more than $50 million took place, accounting for $123 billion in total value, compared with 43 deals worth just $16.4 billion in last year’s third quarter. That represents 649% growth in total deal value………………………………………..Full Article: Source

OPEC: Hobbit Or Orc?

Posted on 29 October 2014 by VRS  |  Email |Print

The recent drop of $20 or so in oil prices from near all-time highs has pundits racing for their typewriters. Okay, laptops or something. Many have declared OPEC dead or ineffective, and one academic has noted that OPEC almost always produces over quota, proving it’s not a competent cartel.
Needless to say, aged methane emissions like me tend to sigh in our beards when we read this. OPEC has been declared dead more times than Mark Twain or the Boston Red Sox (next year for sure!) and yet it continues to hold meetings and set production quotas, as if thousands of pundits aren’t shoveling dirt on their coffin………………………………………..Full Article: Source

Global Commodities Drop to Five Year Low

Posted on 28 October 2014 by VRS  |  Email |Print

Commodities slumped to a five-year low led by gasoline and agriculture products grown in Brazil on speculation a slump in the country’s currency will fuel exports. The Bloomberg Commodity Index dropped 0.6 percent at 1:56 p.m. in London after falling to the lowest since July 2009. Raw sugar futures fell 1.6 percent and soybeans dropped 0.4 percent. Brazil is the biggest exporter of both commodities.
Brazil President Dilma Rousseff’s re-election damped speculation for a change in policies, sending the real down 2.1 percent today. The real weakened 33 percent against the dollar since Rousseff took office in January 2011. Declines in the Brazilian currency tend to encourage export sales of products traded in dollars………………………………………..Full Article: Source

Iran says OPEC meeting unlikely to lower output ceiling

Posted on 28 October 2014 by VRS  |  Email |Print

OPEC is unlikely to lower its oil production ceiling when the group meets in November, a senior Iranian oil official said, in comments that reduced the likelihood of any collective OPEC action to support prices.
Iran is normally among the first members of the Organization of the Petroleum Exporting Countries to call for action to support prices. Iran needs relatively high prices as Western sanctions limit its oil exports, analysts say………………………………………..Full Article: Source

Large Speculators Build Bullish Gold Positions For Second Week In Latest CFTC Data

Posted on 28 October 2014 by VRS  |  Email |Print

For the second straight week, large speculators added to their bullish Comex gold futures and options holdings as prices rose during the timeframe covered by the Commodity Futures Trading Commission weekly data. Gold was the only metal to see a rise in bullish positions in the disaggregated and legacy reports for the time period ending Oct. 21.
As it was in the previous report, the situation was mixed for rest of the metals complex. In silver, funds trimmed a net-short position in the disaggregated report and reduced a net-bullish position in the legacy data. In the platinum group metals, large speculators cut bullish exposure in both reports, while in copper, funds raised their net-short position………………………………………..Full Article: Source

Overview of the Gold Market in Q4 2014

Posted on 28 October 2014 by VRS  |  Email |Print

Geopolitical and risk events initially provided some lift at the start of the third quarter but gold failed to clear $1,350 per ounce, prompting further stale liquidation from institutional investors. Resurgent dollar sentiment, coupled with growing signs the US Federal Reserve will begin a cycle of monetary tighten from next year triggered a deeper correction to $1,200 by the end of the quarter.
Gold has found strong jewellery and retail investment demand towards $1,200, which should help limit any further falls, but gold is approaching a key double bottom around $1,180. A breach of that level could threaten a deeper correction towards $1,100………………………………………..Full Article: Source

What a commodity bust would mean for Canada’s economy

Posted on 27 October 2014 by VRS  |  Email |Print

The past few months have brought shock and upheaval to energy markets, as well as angst to many corners of the Canadian economy. Since June, the U.S. price of oil has plunged more than 20 per cent, briefly tumbling below US$80 a barrel last week.
The decline has weighed heavily on Canadian stocks, which were already caught in the downdraft of a global stock market correction. Even after several days of recovery, the S&P/TSX index was, as of Tuesday, still below the peak it reached just before the Great Recession six years ago………………………………………..Full Article: Source

India: Domestic gold market sparkles on festival demand

Posted on 27 October 2014 by VRS  |  Email |Print

The demand for gold is once again sparkling this Diwali. According to the All India Gems and Jewellery Trade Federation, gold sales this Diwali were 20 per cent higher than the previous year. Since the Indian rupee is range-bound between 61 and 62 over the last few weeks, the domestic gold price is now largely influenced and moves more in tandem with the global price.
The probability is high for the market to remain stable at least until the US Federal Reserve meeting on Wednesday. The outcome of this meeting is expected to increase the volatility in the market. Also, it could set the short-term trend for the gold price………………………………………..Full Article: Source

Why it’s time to watch silver

Posted on 27 October 2014 by VRS  |  Email |Print

Battered silver remains deeply out of favour, recently plumbing miserable new lows after drifting sideways for most of 2014. This metal’s relentless and oppressive weakness continues to break the wills of long-suffering contrarians. But professional investors are taking advantage of the epically-bearish psychology plaguing silver. They’ve been steadily accumulating positions all year long in massive stealth buying.
Silver certainly wasn’t always a loathed market pariah. Back in early 2011, silver blasted up above $48 on widespread enthusiasm from investors and speculators. It was one of the 2000s’ greatest bull markets, up an astounding 1105% during a 9.4-year span where the benchmark S&P 500 limped to a 20% gain. The brave contrarians fighting the herd to buy silver low in the early 2000s greatly multiplied their wealth………………………………………..Full Article: Source

Commodities: A partial pump primer

Posted on 24 October 2014 by VRS  |  Email |Print

Few economic forces are more important than commodity prices. When they rise they transfer riches and power from consumers to producers; when they fall, it is as near as anything in economics to a free lunch for consumers. With so much at stake, turning points are important for the global economy. Such a moment appears to be at hand.
Across a wide range of commodities, prices are falling and sometimes falling fast. The Bloomberg commodity index – which acts as a benchmark for commodity investments – fell to its lowest level in five years this week. Prices are being pushed down by the increasing supply of most commodities and a weakening global economy, including a slowing China, the world’s largest consumer for many of these raw materials. Whether it is oil, corn, iron ore, coal, cotton or copper, prices are falling quickly………………………………………..Full Article: Source

Russians Make Largest Gold Purchase In 15 Years: What Does It Mean For Gold Investors?

Posted on 24 October 2014 by VRS  |  Email |Print

Russian central bank purchases 1.2 million ounces of gold in September. This is the largest gold purchase by Russia in over 15 years. If the Russian central bank keeps up monthly gold purchases of this size then it will impact total annual gold demand.
There may also be significant political motivations in publicly announcing this large gold purchase. A few days ago the Russian central bank released its gold reserve data that showed a tremendous increase in gold reserves during the month of September………………………………………..Full Article: Source

All About Liquid Commodities

Posted on 23 October 2014 by VRS  |  Email |Print

Liquid Commodities are widely traded at huge volumes by investors, hedgers, speculators/traders and arbitrageurs both in cash and derivative markets. Crude Oil, Natural Gas, Gold, Wheat, Corn and Copper are among the leading commodities that are traded globally at huge volumes.
The Deutsche Bank Liquidity Commodity Index (DBLCI) tracks the performance of six commodities in the energy (WTI crude oil and heating oil), precious metals (gold), industrial metals (aluminum) and grain sectors (corn, wheat). Generally, the commodities are classified as energy, metal, bullion and agro. Energy Commodities: Crude oil, natural gas and heating oil are the leading energy commodities………………………………………..Full Article: Source

Falling Commodity Prices Lift India’s Economy

Posted on 23 October 2014 by VRS  |  Email |Print

The slump in global commodity prices, especially for energy, is proving a boon to India. The country’s economy is one of the world’s most sensitive to energy prices because India is a heavy importer of fuel. Growth in Indian gross domestic product has sagged in recent years, crippled by the soaring cost of oil and gas on international markets.
The recent slump in prices means consumers are spending less on imported fuel and more on other items produced domestically. The government’s finances have benefited as well………………………………………..Full Article: Source

The Better Short: Gold Or Silver?

Posted on 23 October 2014 by VRS  |  Email |Print

The fundamentals for the precious metals are weak. This has been highlighted in recent weeks by the lack of a major rally in Gold and the losses in Silver despite a spike in volatility to its highest since 2011.
Improving economic data, the tapering of QE, and discussion of when the first rate hike will be have resulted in heavy losses over the past two years in the precious metals, and are to blame for the poor performance in the recent risk off market conditions stemming from the Ebola fears. These overwhelmingly bearish fundamentals are the reason that we have taken short positions on the precious metals sector and why we intend to continue to do so………………………………………..Full Article: Source

Nickel’s Slide Extends Roller-Coaster Ride

Posted on 23 October 2014 by VRS  |  Email |Print

Nickel prices have sunk to their lowest level since March, as slowing economies in Europe and China rattle investors, while a financing scandal in China has prompted companies to dump tons of nickel and other metals on the market.
The slide extends this year’s roller-coaster ride for traders in the metal, which is used to produce stainless and heat-resisting steel. Nickel futures have tumbled more than 20% since early September. That followed a monthslong rally, as a ban on nickel-ore shipments by No. 1 exporter Indonesia drove a 50% jump in prices from January to mid-May………………………………………..Full Article: Source

Global commodity markets hit by demand slowdown

Posted on 22 October 2014 by VRS  |  Email |Print

Global commodity markets are currently going through a period of turmoil. The tug-of-war between supply and demand is palpable. Several uncertainties that impacted the market in recent years continue to play out differently.
In the last two years, markets were driven by a series of concerns and uncertainties covering global economic growth, geopolitical instabilities, contrasting monetary policies by different countries, currency gyrations and weather. There is no denying that a substantial part of the commodity price boom was liquidity driven, thanks to the US Fed’s ultra-liberal monetary policy………………………………………..Full Article: Source

OPEC can respond to excess oil supply: Algerian official

Posted on 22 October 2014 by VRS  |  Email |Print

OPEC could in the future take action to respond to the recent fall in oil prices, Algerian energy ministry official Ali Hached said in Paris Tuesday. “Collectively OPEC can respond to the excess supply that we have on the market,” he said. Answering questions at the 19th Gas and Electricity Summit organized by Petrostrategies, Hached said “this situation is not new” and added that “we’ve already faced major fluctuations in oil prices” in the past.
He noted comments earlier in the meeting from Olivier Appert, head of the IFP Energies Nouvelles research institute. Appert had recalled the oil price falls of 1985/86, as well as the way that OPEC had reacted to the dramatic fall in prices in the immediate aftermath of the global financial crisis in 2008………………………………………..Full Article: Source

With US shale gas revolution, has OPEC become a paper tiger?

Posted on 22 October 2014 by VRS  |  Email |Print

But an even bigger part of the reason is that the shale revolution in North America is utterly changing the supply-demand dynamic. Since 2008, says Bernard Weinstein, an energy expert at Southern Methodist University, oil production in the United States is up 60 percent. That’s an additional 3 million barrels a day.
Within a few years, predicts Morse, America will overtake Russia and Saudi Arabia and become the world’s largest oil producer. What’s more, according to another article Morse wrote, this one for Foreign Affairs magazine, “the costs of finding and producing oil and gas in shale and tight rock formations are steadily going down and will drop even more in the years to come.”……………………………………….Full Article: Source

Exposure on Chinese commodities not for risk-averse

Posted on 21 October 2014 by VRS  |  Email |Print

Millions of Chinese are planning to leave China. Why? Where are they going? What do they plan to do? Run your eye down the list of nationalities taking advantage of the “golden visa” schemes across Europe and you will find that the majority of those buying relatively expensive property to be able to apply for residency are Chinese — 81 per cent so far in Portugal’s scheme.
That might be just about the nice weather in Lisbon, the semi-democracy offered by the EU and the lower levels of air pollution in the west. But it might also be to do with the fact that China’s economy isn’t quite what it was………………………………………..Full Article: Source

Iran Shuns Image as OPEC Hawk While Seeking Sanctions End

Posted on 21 October 2014 by VRS  |  Email |Print

Iran, eager for an end to sanctions that have restricted its oil exports, is shunning its image as OPEC’s price hawk by avoiding calls for an emergency session of the group to support prices. Oil Minister Bijan Namdar Zanganeh consulted with Iranian President Hassan Rouhani about political and economic reasons for the price collapse, the ministry’s news website Shana reported.
No emergency meeting of the Organization of Petroleum Exporting Countries is necessary to discuss the slide, Shana said. Rouhani told Zanganeh to use the “oil diplomacy tool” to try to prevent a further decrease, the state-run Mehr news agency said Oct. 19, without elaborating………………………………………..Full Article: Source

Why some global commodities players are shipping less Canadian crude by rail now

Posted on 21 October 2014 by VRS  |  Email |Print

Spot crude-by-rail volumes are down in Canada as traders and marketers including Glencore PLC are deterred by stronger heavy oil prices that have erased arbitrage opportunities to ship cheap crude from landlocked Alberta to higher-priced U.S. markets, industry sources said.
Since early August, heavy Canadian crude’s discount to U.S. futures has narrowed to about half of what it was last year, barely covering rail shipping costs, mainly due to extra demand to fill Enbridge Inc’s new pipeline to flow the Canadian glut to U.S. Gulf Coast refining hub………………………………………..Full Article: Source

Refined lead market to show ‘modest’ deficit in 2014, 2015: ILZSG

Posted on 21 October 2014 by VRS  |  Email |Print

Global demand for refined lead metal will continue to exceed supply by a modest amount in both 2014 and 2015, the International Lead and Zinc Study Group said Monday, forecasting a deficit of 38,000 mt this year and 23,000 mt in 2015.
Global demand for refined lead metal is forecast to rise by 1.4% to 11.33 million mt this year and by a further 2.1% to 11.56 million mt in 2015, the ILZSG said. “In China, despite a further increase in automotive output and an expansion in the construction of mobile phone base stations that require industrial lead-acid batteries for back-up power, demand growth is expected to slow to 2.5% in 2014 and 2.9% in 2015,” the group said in a statement………………………………………..Full Article: Source

Citi buys Deutsche commodities trading book in expansion push

Posted on 21 October 2014 by VRS  |  Email |Print

Citigroup Inc has bought Deutsche Bank AG’s energy and metals book, a source familiar with the matter said, in the latest sign of expansion from the U.S. firm in commodities trading as rivals retrench.
Citi won Deutsche’s oil, metals and power books this summer and autumn, the source said, after a bidding round that saw several Wall Street firms and trading houses chasing the opportunity to take on the positions of a once top-five commodities bank………………………………………..Full Article: Source

Volatility is spice of life in commodities market

Posted on 20 October 2014 by VRS  |  Email |Print

On the eastern side of Australia this week, the opening of a new mine in an oversupplied commodity sector was warmly welcomed as a humanitarian act that was providing jobs and hope. Over on the nation’s western coast, plans to increase supply into another oversupplied commodity were sharply criticised as a “flawed strategy” that was harming the local jurisdiction.
The two commentators were, famously, elected statesmen from the same political church, yet political discourse was not the only place where wild volatility was the order of the day. Amid gyrations in global markets, prices for some of the commodities with the biggest influence on the Australian economy, particularly oil and iron ore, were tracking unpredictable paths………………………………………..Full Article: Source

Commodities haunted by demand fears as outlook darkens

Posted on 20 October 2014 by VRS  |  Email |Print

Commodity markets were haunted by demand fears this week in the face of mounting global economic worries, with crude oil prices striking four-year lows and base metals also suffering heavy falls. Markets around the world have been hammered by worries about the global economy as the eurozone, China and Japan struggle to reignite growth.
Those fears increased this week when data from the United States, which has been the only economy showing signs of strength, came in well below expectations. The oil market was also rocked by persistent worries over abundant supplies. OIL: Brent hit a fresh four-year low after another sharp sell-off in equities………………………………………..Full Article: Source

Saudi Arabia tests US ties with oil price

Posted on 17 October 2014 by VRS  |  Email |Print

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.
At a time when the US and Saudi Arabia are fighting a new war together in Iraq and Syria, the Saudis have taken the bold step of asserting their pivotal role in the oil market and subtly squeezing the finances of some of America’s fledgling shale companies………………………………………..Full Article: Source

Saudis, other Gulf states to oppose OPEC output cuts

Posted on 17 October 2014 by VRS  |  Email |Print

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.
“Saudi Arabia and the rest of the Gulf countries have no intention whatsoever to accept the idea of a cut at the November meeting,” a Gulf OPEC official said……………………………………….Full Article: Source

Is gold set for a bull run?

Posted on 17 October 2014 by VRS  |  Email |Print

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.
At the same time, gold prices reached a month high after dropping drastically since the year-peak it saw back in March – many investors turn to the precious metal as a safe haven in rocky periods………………………………………..Full Article: Source

LBMA names Morgan Stanley as gold, silver market maker

Posted on 17 October 2014 by VRS  |  Email |Print

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.
LBMA said it named Morgan Stanley & Co International, a unit of US investment bank Morgan Stanley, as a spot and options market-making member effective Thursday. Currently, LBMA has 13 market makers which serve in either one, two or all three of the spot, options and forwards markets. They make markets by quoting two-way prices in both gold and silver products to other market makers………………………………………..Full Article: Source

The next paradigm in commodities: Trade houses vs banks

Posted on 16 October 2014 by VRS  |  Email |Print

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.
The last two years have witnessed a lot of activity in this point of intersection where there has been a flight of human and financial capital from banks to trade houses. In this article, I will focus on the key reason on such a paradigm shift, and also predict a futuristic scenario how these two service industries will evolve given the technological advance………………………………………..Full Article: Source

Commodities Sink to Five-Year Low Led by Metals Declines

Posted on 16 October 2014 by VRS  |  Email |Print

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.
Raw materials slumped 7 percent this year, headed for a fourth annual decline and the longest slump since at least 1991, amid concern that economic growth is weakening as global equity markets lost $1.5 trillion last week. A stronger dollar has curbed demand for commodities as alternative assets………………………………………..Full Article: Source

Flat commodities may be investors’ chance

Posted on 16 October 2014 by VRS  |  Email |Print

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.
Ric Spooner, chief market analyst at CMC Markets, explains iron ore prices are suffering from rising supply and slowing demand. “It’s been a long time coming but we have passed the inflection point where supply capacity exceeds demand. In these circumstances it can be very difficult to forecast where prices will bottom………………………………………..Full Article: Source

Winners and losers from oil price plunge

Posted on 16 October 2014 by VRS  |  Email |Print

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?
One thing is certain: even the current lower prices are rapidly creating winners and losers. Losers are producers, countries and governments. If Brent falls to $80, Opec countries would lose some $200bn of their recent $1tn in earnings, affecting not only their ability to earn enough to cover the post-Arab Spring expanded budgets, but also their capacity to service debt without triggering defaults………………………………………..Full Article: Source

Oil market proves mightier than OPEC: Kemp

Posted on 16 October 2014 by VRS  |  Email |Print

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.
“If the shale revolution can be sustained in the United States, and successfully exported to other countries, some combination of OPEC production cuts or lower oil prices to encourage demand and forestall more investment, will be inevitable by 2015-16,” I wrote last year……………………………………….Full Article: Source

Gold, silver doldrums to continue in 2015 - Natixis

Posted on 16 October 2014 by VRS  |  Email |Print

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.
“For physically backed gold ETPs, we expect that current gradual outflows will continue during 2015,” advised precious metals analyst Bernard Dahdah and head of commodities research, Nic Brown. “We do not expect sharp outflows as we believe that most institutional investors already exited their positions in 2013.”……………………………………….Full Article: Source

Societe Generale Trims Forecasts For Platinum, Palladium

Posted on 16 October 2014 by VRS  |  Email |Print

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.
South African production has ramped up from a strike faster than expected, and there is a realization existing above-ground stocks may be more than once thought, the bank says. Further, PGMs fell with gold as the dollar strengthened in recent weeks, although the opposite is the case so far Wednesday. Despite favorable supply/demand fundamentals, platinum is likely to come under pressure again if gold comes back under pressure, the bank says………………………………………..Full Article: Source

China commodities imports rebound on low prices, stimulus hopes

Posted on 14 October 2014 by VRS  |  Email |Print

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.
Crude oil imports also rose a stronger-than-expected 13 percent in September from August, but analysts said the country may be boosting its strategic reserves given demand growth in the world’s largest energy consumer remains subdued………………………………………..Full Article: Source

Banks and investors see appeal of commodity finance

Posted on 14 October 2014 by VRS  |  Email |Print

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.
Under assault from tighter regulation, falling revenues and higher capital requirements, banks across Europe and the US have been taking the axe to their commodity trading businesses during the past few years. But whereas commodity trading may have fallen out of favour, commodity finance remains very much in vogue………………………………………..Full Article: Source

Citi: It’s commodity bear market!

Posted on 14 October 2014 by VRS  |  Email |Print

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.
The two charts of gold and silver below show the 21-year uptrend in the 2-year moving average of each of those commodities. The fairly recent downturn implies that an entirely new ‘post-Supercycle’ phase lies ahead of us. It therefore seems easy to define gold and silver as being in a bear market right now and yet the 2-year moving average of the base metal index looks very similar………………………………………..Full Article: Source

Iraq Follows Saudi Price Cuts as Brent Oil Falls With WTI

Posted on 14 October 2014 by VRS  |  Email |Print

Iraq will sell its Basrah Light crude to Asia at the biggest discount since January 2009 as it follows Saudi Arabia and Iran in cutting prices amid a slump in Brent futures to the lowest in almost four years.
Brent crude, the European benchmark, fell 2 percent in London today while West Texas Intermediate lost 1.4 percent in New York. Iraq, the second-biggest producer in the Organization of Petroleum Exporting Countries, trimmed the price differentials for supplies to Asia and Europe for November, the country’s State Oil Marketing Co., known as SOMO, said………………………………………..Full Article: Source

OPEC’s Strife Deepens

Posted on 14 October 2014 by VRS  |  Email |Print

The latest comments from different OPEC sources suggest there is indeed a deep malaise within the cartel that for so long has been key to the path of oil prices. What seems increasingly clear is that OPEC members are in deep disarray over how to respond to the once-in-a-generation supply shock that is the U.S. shale revolution. Rather than looking to cooperate with each other to stem oil’s fall, individual cartel members are instead engaged in a desperate scramble for market share.
That means they are still pumping as much oil as they can, rather than working together to try to cap supply. And with OPEC in theory working these days to a collective supply quota, rather than setting individual output quotas for each country, the penalties for producing too much crude are much now weaker than in the past………………………………………..Full Article: Source

Gold Rises As Worries About World Economy Spur Safety Buying

Posted on 14 October 2014 by VRS  |  Email |Print

Gold prices rose to the highest level in nearly four weeks as growth jitters burnished the appeal of relatively safe investments. Investors in recent days have sold stocks and other assets sensitive to the outlook for the global economy, scooping up traditional havens such as Treasurys and the Japanese yen. That shift also has lifted prices of gold, which had fallen out of favor with many money managers in the past two years.
The prospect of higher interest rates in the U.S. has weighed on the gold market since early 2013, when Federal Reserve officials first hinted that the central bank would begin dialing back accommodative monetary policies in place since the financial crisis. That dulled the allure of gold, which yields nothing and costs money to hold………………………………………..Full Article: Source

Silver price set-up attracts China banks

Posted on 14 October 2014 by VRS  |  Email |Print

Several Chinese banks have expressed interest in participating in the new global price setting mechanism for silver, according to the head of the London Market Bullion Association. The LBMA ushered in a new era of electronic benchmarking for London’s precious metals market in August when an algorithm was used for the first time to set the benchmark price for silver.
But so far only five participants have signed up to the new process, with JPMorgan Chase joining on Monday. The LBMA Silver Price replaces a closed teleconference run by member banks that was criticised for being opaque and vulnerable to manipulation………………………………………..Full Article: Source

Commodities Drop Near 5-Year Low on Growth, Glut Concerns

Posted on 13 October 2014 by VRS  |  Email |Print

Commodities traded near the lowest since 2009 as oil extended a slide into a bear market amid signs of ample supplies, while industrial metals dropped on concern that slowing growth from Europe to China will sap demand.
The Bloomberg Commodity Index lost as much as 0.8 percent to 117.83, near a five-year low of 117.69 reached Oct. 3. The gauge fell the previous five weeks in the longest run of losses since April last year. It slid 12 percent last quarter, the most since 2008, on rising supplies of everything from oil to corn and as a stronger dollar made raw materials priced in greenbacks more expensive in terms of other monies………………………………………..Full Article: Source

Iran warns Opec indecision will hit oil prices as crude slumps

Posted on 13 October 2014 by VRS  |  Email |Print

Iranian oil adviser reminds group of production mistakes made in 1998 which sent crude to levels below $10 per barrel. Oil prices will slump further if the Organisation of Petroleum Exporting Countries (Opec) repeats its mistakes of the 1990s and fails to cuts its production fast enough to cope with a glut of crude now flooding the international market, Iran’s Oil Ministry has warned.
“In 1998 inadequate reaction by Opec sent oil prices to as low as $6 to $8 per barrel,” said Mehran Amirmoeini, a top energy adviser, quoted by the official Iranian Oil Ministry news service. “When the market is faced with falling demand and simultaneously rising supply, naturally some countries try to absorb customers by offering discounts.”……………………………………….Full Article: Source

Saudi Arabia Tells OPEC It Raised Output In Sept Despite Oil Drop

Posted on 13 October 2014 by VRS  |  Email |Print

The lack of a Saudi cut could add to perceptions of traders and analysts that the Kingdom is looking to defend market share, not prices. Top oil exporter Saudi Arabia told OPEC it raised its oil production in September by 100,000 barrels per day, adding to signs it has yet to respond to a drop in prices well below $100 a barrel by trimming output.
In a monthly report issued on Friday, the Organization of the Petroleum Exporting Countries (OPEC) said Saudi Arabia reported September production of 9.704 million barrels per day (bpd), up from 9.597 million in August………………………………………..Full Article: Source

Venezuela calls for OPEC emergency meeting

Posted on 13 October 2014 by VRS  |  Email |Print

Venezuela has called on the Organization of the Petroleum Exporting Countries (OPEC) to convene an emergency meeting to prevent sharp reduction in the oil prices in the global market. “We are going to ask for an extraordinary OPEC meeting. We need to try to coordinate some sort of action to stop falling oil prices,” Venezuela’s Foreign Minister Rafael Ramirez said at a Friday news conference in Caracas.
“I am convinced this is not due to market conditions, but is price manipulation to create economic problems for large oil-producing businesses,” Ramirez added………………………………………..Full Article: Source

Asian Market Hubs Move Into Gold

Posted on 13 October 2014 by VRS  |  Email |Print

Asians buy most of the world’s gold, but nearly all of it trades in London. Now, with Western investors souring on the metal, the region is making a bid for some of the action. Three big financial hubs in Asia are separately launching trading in a gold contract, each backed with physical gold.
If they draw enough investors, the contracts could influence the price of gold, which is set by a daily fix in London. “You now have a market that’s driven by Asia,” says Catherine Raw, who manages BlackRock Inc.’s $7 billion global mining fund………………………………………..Full Article: Source

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