Tue, Oct 21, 2014
A A A
Welcome kbr175@gmail.com
RSS

Commodities Briefing - Category | Market Moves more

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

Why the gold bear market may finally be over

Posted on 13 October 2014 by VRS  |  Email |Print

After three tough years for gold, could a bullion turnaround finally be in the cards? That’s the argument made by Lindsey Group’s chief market analyst, Peter Boockvar, who says that the Federal Reserve meeting minutes released this week point to a reversal for the precious metal.
“The three-year bear market in gold, in my opinion, is over, because yesterday in their minutes, the Fed officially threw their hat in the global-currency-war ring,” Boockvar said……………………………………….Full Article: Source

Standard Chartered strikes gold in China commodities

Posted on 13 October 2014 by VRS  |  Email |Print

While markets started the year range-bound, a surging dollar, weak economic data from Europe and the US – plus supply exceeding China demand – saw volatility return by the middle half of 2014 in a number of key commodities. Iron ore saw prices fall by 41% to reach a five-year low in mid-September, while protectionist moves by the Indonesian government requiring nickel to be smelted locally initially drove a spike in prices but this eventually reversed as Chinese firms offloaded supply into the global market, driving September prices 20% below their May high.
For banks, the global retreat from the commodities market continued. Credit Suisse closed down its commodities arm – a move that was felt particularly in Singapore, given the firm’s market-making role on the Singapore Exchange’s iron ore swap contract. The diminishing role of the global banks has been particularly felt in the oil derivative markets as the oil majors play an increasingly important role………………………………………..Full Article: Source

5 ways to avoid losses in commodity market

Posted on 10 October 2014 by VRS  |  Email |Print

Commodity markets have a tremendous impact on the economy and the life of people. Though demand-supply is the prime factor behind the price volatility, currency moves, geopolitical issues, economic growth and government policies are other factors influencing commodity prices. Typically, the commodities market is subject to rallies and crashes, so it is more susceptible to speculation than the stock markets.
Before participating in commodity futures, an investor or trader should be prepared and ready to learn how the market works. Futures contracts unlike stocks have different expiry periods. As the futures platforms are primarily intended for hedging with a view to reduce the risk in portfolio, those who are participating in the commodities segment without fully understanding the fundamentals of the contract will stand to lose their initial capital or a part thereof………………………………………..Full Article: Source

Commodity free fall

Posted on 10 October 2014 by VRS  |  Email |Print

The International Monetary Fund (IMF) expects commodity prices to decline till 2019 across fuel, metal and agricultural products. It expects inflation in emerging markets to decline due to softening prices, especially of food. That will be good news for India. Low energy prices will mean a lower current account deficit for the country.
Low inflation can mean lower interest rates, lower costs for producers and more money with consumers, leading to better corporate earnings growth. Nevertheless, IMF also cites the risks of oil prices rising due to geopolitical conflicts in Ukraine and the Middle East. And producers such as farmers and metal companies may feel the heat, and if they cut output, these projections will be at risk………………………………………..Full Article: Source

Oil market bulls say price war is unlikely

Posted on 10 October 2014 by VRS  |  Email |Print

Ignore the talk of an OPEC price war, say crude market bulls. Oil’s next move was spelled out in Saudi Arabia’s own words. Price cuts announced by the Saudis, including the biggest discounts for Asia since 2008, sparked speculation that the world’s biggest crude exporter would let oil tumble rather than cede market share to rivals in OPEC.
This is misguided, said UBS AG and BNP Paribas SA. Brent is below the $95-to-$110 range endorsed by Saudi Oil Minister Ali al-Naimi, ensuring the country will curb output, they said. Brent, the European benchmark, fell into a bear market amid a surplus of U.S. shale oil and weaker economic growth. The discounts prompted predictions that Saudi Arabia would tolerate lower prices to deter investment in higher-cost U.S. shale………………………………………..Full Article: Source

Will Zinc Price Rally in October?

Posted on 10 October 2014 by VRS  |  Email |Print

Zinc price in China’s domestic market is expected to trend higher in October, an analyst from Shanghai CIFCO Futures predicts in a most recent SMM’s interview. Orders at Chinese galvanizers and zinc oxide producers usually grow in Q4, and this will boost demand for zinc ingot, the analyst told SMM.
“Physical supply is tight now, with spot premiums in east China’s zinc market as high as 200 yuan per tonne”, he said. Concern over supply disruptions of zinc ore will continue to lure investors into zinc market, he added………………………………………..Full Article: Source

What are commodities and the dollar telling us?

Posted on 09 October 2014 by VRS  |  Email |Print

Commodity prices are tanking while the dollar soars, and this action tells volumes about market action and where new opportunities might be found. Here are some takeaways from action in commodities and the dollar:
Commodity prices rise and fall inversely to the strength of the dollar. Since Aug. 28, the dollar has been on a steady climb, so ETFs like the PowerShares Bullish Dollar UUP, -0.44% have been a good place to be as the ETF is up more than 7% since early August. This is likely to continue as quantitative easing comes to an end and the Fed moves toward raising interest rates………………………………………..Full Article: Source

Iran denies oil “price wars” as crude continues to slip

Posted on 09 October 2014 by VRS  |  Email |Print

Iran will not be reducing its oil prices in order to match its competitors on the global market, Iran’s oil minister said on Tuesday, amid fears that discounts offered by Saudi Arabia to US and Asian customers in November could trigger a price war among OPEC members.
“There is no oil price war in the [crude] market,” Iranian Minister of Petroleum Bijan Namdar Zanganeh told reporters on Tuesday, in comments carried by state-owned Iranian news channel Press TV. He added that Iran’s state-owned oil company, the National Iranian Oil Company, was currently setting prices in a “professional” manner………………………………………..Full Article: Source

SNC says commodity slump delaying infrastructure projects

Posted on 09 October 2014 by VRS  |  Email |Print

The global commodity slump and slowing growth in China will delay any significant uptick in oil and gas infrastructure projects until at least 2016, the head of Canada’s largest engineering firm says.
Robert Card, chief executive officer of SNC-Lavalin Group Inc., said there are a handful of bright spots for new oil and gas development in parts of the United States and Canada, where unconventional drilling is under way, but aside from that “there isn’t anything happening anywhere.”……………………………………….Full Article: Source

Commodity themes 2015: Expect metals to be bullish, Oil to fall further

Posted on 08 October 2014 by VRS  |  Email |Print

Amidst a strengthening US dollar, rise in equity markets, commodities are likely to underperform in the coming months. However, metals complex appears bullish,according to a new report titled Commodity Themes 2015 released by Deutsche Bank.
Brent oil physical fundamentals are weak and appearance of contango in Brent oil market will eventually be met with OPEC production cuts to tighten fundamentals and restore backwardation.Falling Brent crude oil prices are already impacting budgetary positions among the major oil producers. History shows that when OPEC takes action and cuts production, their efforts to stabilise and push oil prices are successful. However, this is contingent on world GDP growth in excess of 2.5%………………………………………..Full Article: Source

Saudi Arabia initiating a price war among OPEC members?

Posted on 08 October 2014 by VRS  |  Email |Print

Crude oil is poised to extend the biggest slump in more than two years after Saudi Arabia signaled it is ready for a price war with other OPEC members. Saudi Aramco, the state-run oil producer of the world’s biggest exporter, cut prices on October 1 for all its exports, reducing those for Asia to the lowest level since 2008. The move suggests that the biggest member of the Organization of Petroleum Exporting Countries is prepared to let prices fall rather than cede market share by paring output to clear a supply surplus.
Aramco reduced official selling prices, or OSPs, for all grades of crudes to all regions for November. It lowered the OSP for Arab Light to Asia by $1/bbl to a discount of $1.05 to the average of Oman and Dubai crude, the lowest level since December 2008. OSPs are regional adjustments Aramco makes to price formulas to compete against oil from other countries………………………………………..Full Article: Source

Gold Has Most Challenged Fundamentals In Precious Metals Sector – BoAML

Posted on 08 October 2014 by VRS  |  Email |Print

Of all the precious metals, gold has “the most challenged fundamentals,” said analysts at Bank of America Merrill Lynch on Tuesday, as rising interest rates, stronger equities and the rising U.S. dollar all weigh on the yellow metal.
Adding to gold’s weakness is the reduced Chinese purchases year-over-year, they said. The combination all of these forces suggests that “prices may touch $1,100/oz at some stage next year,” the analysts said in a research note. While all of these factors contribute to weaker prices, gold has some supportive supply and demand aspects which could give the metal some support around $1,200, the bank said………………………………………..Full Article: Source

Why Gold, Crude Prices Have Hit Multi-Year Lows

Posted on 07 October 2014 by VRS  |  Email |Print

Precious metals seem to have joined the global downturn in commodity prices, with gold tumbling to its lowest level in 15 months on Monday. The fall in commodity prices augurs well for the Indian economy and for also for corporate earnings.
Here are 10 things to know about the fall in commodity prices, 1) Cash Gold hit $1183.46 an ounce today, its weakest since June 2013. Other precious metals also fell tracking weak gold prices. Platinum touched its lowest since 2009, silver fell to its weakest since 2010, and palladium hit an 8-month low………………………………………..Full Article: Source

Production costs, physical demand key to gold price support – BARCLAYS

Posted on 07 October 2014 by VRS  |  Email |Print

The costs of production and physical demand can offer guidance to where price support may materialise for gold, Barclays said. Prices of $1,190 per ounce suggest that 15 percent of gold production is cash-negative on an all-in sustaining capex basis, the bank said in a note on Monday, while less than 1 percent is negative on a cash-cost basis.
“The sustaining cost of production is a clearer measurement of the cost pressures gold producers face,” it said. “Again, the strength of the dollar offers some respite to producers outside of the US, but given the weak demand environment, any cuts in production are unlikely to tighten the gold market immediately.” The marginal cash cost of production in gold is currently $988 per ounce, it said, with spot gold currently testing key levels around $1,194/1,194.80………………………………………..Full Article: Source

Time to buy commodities? Maybe, but not the old ways: Russell

Posted on 06 October 2014 by VRS  |  Email |Print

Crazy or brave? That might be the most logical thought if anybody told you now was a good time to invest in commodities, given the sharp declines in the main indexes in the past few months. But that’s exactly what the overwhelming majority of fund managers and bankers were advocating at last week’s World Commodities Week conference in London.
Their optimism was in contrast to the clutch of analysts who presented at the meeting, who generally reinforced the current bearish theme by pointing to softness in demand in top importer China, as well as plentiful supply for many commodities………………………………………..Full Article: Source

Emerging markets adapt to ‘new normal’ as commodities cycle ends

Posted on 06 October 2014 by VRS  |  Email |Print

Emerging market investors are in the grip of their third taper tantrum in 18 months. This time, however, “tantrum” – suggesting an all-consuming but shortlived emotional fit – may no longer be the right word. What’s happening now is more akin to a lasting personality change as markets adapt to a “ new normal” resulting from what many think will be structural rather than cyclical changes in conditions.
“There are so many layers of complexity,” says Luis Costa, a currency and credit strategist at Citi. “A lot of investors out there still think of emerging markets from the perspective of the commodities cycle. But the commodities cycle is over.”……………………………………….Full Article: Source

A moment of respite on commodity prices

Posted on 06 October 2014 by VRS  |  Email |Print

The price of a barrel of the benchmark Brent crude has dropped by more than $20 since June to its lowest level in 28 months. It is widely understood why the decline in global crude oil prices is good news for the Indian economy. As we had argued in these columns on 21 August, lower energy prices take pressure off the fiscal deficit, the current account deficit and inflation.
A further source of relief is the fact the commodity prices in general have been coming down as global demand has faltered. Gold is losing its lustre. Global food prices have also softened though our protected markets for food ensure that domestic food prices do not adjust to global price trends as easily as they do for industrial commodities………………………………………..Full Article: Source

Gold poised at the brink

Posted on 06 October 2014 by VRS  |  Email |Print

Gold had another forgettable week in global markets, registering a negative close below the psychological $1,200 per ounce mark at $1,191.42, down 2.2 per cent. Mixed data releases from the US prompted gold to register volatile trades between $1,204 and $1,223 until Thursday.
The trigger for the sharp fall came on Friday in the form of the US non-farm payroll (NFP) and unemployment data. The NFP increased in September by 248,000 as against the market expectation for a 216,000 rise. Also, the unemployment rate in the US fell below 6 per cent for the first time since July 2008 to 5.9 per cent in September from 6.1 per cent in the previous month………………………………………..Full Article: Source

India Looking at Merging Commodity Market Regulator With Sebi

Posted on 06 October 2014 by VRS  |  Email |Print

The government is considering a proposal to merge the Forward Markets Commission (FMC) with the Securities and Exchange Board of India (Sebi) to ensure better monitoring of the commodity futures market. “One of the options being considered by the government is merging FMC with Sebi,” a senior Finance Ministry official said.
Alternatively, the official said, the government may also pursue the long-pending proposal to give more powers to FMC by amending the Forward Contract Regulation Act (FCRA) Amendment Bill. While FMC is the regulator for commodities trading, Sebi regulates the capital markets………………………………………..Full Article: Source

Commodity prices: Oil and trouble

Posted on 03 October 2014 by VRS  |  Email |Print

Give commodity markets credit: they are anything but boring. Between 2000 and 2011 broad indices of commodity prices tripled, easily outpacing global growth and stoking Malthusian hysteria. Jeremy Grantham, a wealthy financier, noted at the time that it was not so much “peak oil” that would undo humanity but “peak everything else”.
Yet since then commodity prices have slumped by about a quarter, and roughly 11% since June alone. That is not, however, an unalloyed good. This reversal of fortunes, naturally, is much better news for net importers of resources than for net exporters. For consumers, a drop in the price of natural gas or rice is like a tax cut: it leaves households with more disposable income………………………………………..Full Article: Source

banner
October 2014
S M T W T F S
« Sep    
 1234
567891011
12131415161718
19202122232425
262728293031