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Is $50 Oil The New $100? (Depends On What You Think $100 Was)

Posted on 03 May 2016 by VRS  |  Email |Print

The rise in the price of oil to $45 from a low of $25 is probably not seeing champagne corks popping in Houston (and definitely not in Riyadh), but it is probably letting a lot of producers (and their bankers) breathe easier.
And various pundits have started to suggest that this is the point where markets will stabilize (a sustainable price, as the kids say), allowing just enough for many companies to invest and, if not expand, at least maintain production, while not drowning the oil market in light crudes from U.S. shales………………………………………..Full Article: Source

Gold hits 15-month high above $1,300/oz as dollar wilts

Posted on 03 May 2016 by VRS  |  Email |Print

Gold rose to a fresh 15-month high on Monday above $1,300 an ounce, supported by renewed weakness in the dollar, but action was muted because of a holiday in some markets. Many Asian markets and London were closed for national holidays, dampening momentum in the precious metal, which posted its biggest weekly rally since early February last week, up more than 5 per cent.
That was chiefly driven by weakness in the dollar, which had its worst week since 2008 versus the Japanese yen after the Bank of Japan unexpectedly opted against further monetary easing. The US currency stayed on the back foot on Monday………………………………………..Full Article: Source

Global commodity bust boosts India Inc’s profits

Posted on 02 May 2016 by VRS  |  Email |Print

The downward cycle in the global commodity market, which has severely impacted several economies, including the behemoth China, has come to the rescue of India Inc as the March quarter performance of companies that have declared results shows.
The aggregate operating profit of 156 companies (excluding banks and financials) that are listed on the Indian bourses and have announced results has grown by an impressive 17 per cent year-on-year.Even as the larger economy continues to grapple with a demand slowdown, as evident from the tepid 2.6 per cent rise in revenue, the weakness in global commodity prices has been the saving grace for the import-dependent economy………………………………………..Full Article: Source

Oil market déjà vu triggers predictions of a return to $30

Posted on 02 May 2016 by VRS  |  Email |Print

Oil’s climb above $45 a barrel is reassuring influential figures from BP PLC to the International Energy Agency that the industry finally is recovering from the worst slump in a generation. Others, though, say the market is about to fall into the same trap as last year.
There’s a sense of déjà vu at Commerzbank AG, BNP Paribas SA and UBS Group AG, which say crude’s gain of about 70 percent from a 12-year low in January resembles the recovery that took hold this time last year — only to sputter out by May as the supply glut endured. Prices will sink back toward $30 a barrel in the coming weeks, BNP and UBS warn………………………………………..Full Article: Source

Oil markets to rebalance in the second half of this year

Posted on 02 May 2016 by VRS  |  Email |Print

Oil markets are expected to rebalance in the second half of this year as oil supplies decrease due to massive cuts in capital expenditure by oil and gas companies, analysts said.
From less than $30 (Dh110) per barrel in January, oil prices have recovered and moved towards $50 per barrel with Brent trading at $48.50 on Friday due to optimism that global oil glut will ease. “We believe under normal conditions towards the end of this year, second half of this year but latest 2017, markets will rebalance,” International Energy Agency (IEA) chief Fatih Birol said on Sunday………………………………………..Full Article: Source

Saudi Russia Fight For China Market Make Oil Price A Sham

Posted on 02 May 2016 by VRS  |  Email |Print

Oil closing in on $50 per barrel has little to do with supply. Sure, stocks have dwindled somewhat in the U.S. and China is slowing down but what about the fact that three of the world’s biggest oil producers are in a pumping war to capture market share in China and Europe?
Russia seems to have discovered China about a year or two ago. It’s building new pipelines. It’s signing deals between state owned enterprises. Oil is flowing. The Saudis are getting nervous as Russia eats into its China market. They’re shipping even more crude to China and some say they are doing it below market prices, taking a loss just to keep Aramco in China’s good graces………………………………………..Full Article: Source

How to avoid the commodities curse

Posted on 29 April 2016 by VRS  |  Email |Print

Papua New Guinea lays out the challenges in stark and basic terms following slump in prices. If you want evidence of the “commodities curse”, look no further than Port Moresby, the raggle-taggle capital of Papua New Guinea.
Of course, the curse is not Papua New Guinea’s problem alone – the global collapse in prices of so many key commodities is creating wrenching challenges in economies ranging from Venezuela, Peru and Brazil to Mozambique, Indonesia and Russia – but Papua New Guinea lays out the challenges in stark and basic terms………………………………………..Full Article: Source

Opec bid to throw US out of oil market seems to have backfired

Posted on 29 April 2016 by VRS  |  Email |Print

Crude oil prices continued to trend higher for the second consecutive fortnight in a row, as Brent rose more than 7.5 per cent while WTI gained 10.10 per cent over the same period.
On MCX, oil prices have risen by around 11.85 per cent in the same time frame. The rally in oil prices is triggered by a combination of factors such as increased optimism that prices may have bottomed out and also increased speculative behaviour by fund managers………………………………………..Full Article: Source

Oil market to face lack of supply in 3 years: Total CEO

Posted on 29 April 2016 by VRS  |  Email |Print

The global oil market will face a lack of supply in three years’ time due to expenditure cuts and postponements in mega projects, Patrick Pouyanne, chairman of the Board and CEO of French oil giant Total said.
Speaking at 2016 Columbia Global Energy Summit, Pouyanne talked about the difficulties that oil companies are facing under low oil prices. “Fifteen days after I became the CEO of Total, oil prices collapsed … and we lost $10 billion in cash flows in two months,” he said. “Due to the huge drop in oil prices, most of the players had to squeeze their cash flows and investments,” he added………………………………………..Full Article: Source

Gold to leave three-year rout behind as Fed rate expectations fade: poll

Posted on 29 April 2016 by VRS  |  Email |Print

After three straight years of losses, analysts are finally prepared to say gold prices have found a bottom, with rising prices seen this year and next as concerns over the pace of U.S. monetary policy tightening fade.
Gold analysts polled by Reuters have hiked their forecasts for the precious metal by nearly $100 an ounce since the start of the year after it posted its biggest quarterly rise in nearly 30 years in the three months to March………………………………………..Full Article: Source

Iron Ore Bear Holds Fast Even After `the Market Got It So Wrong’

Posted on 29 April 2016 by VRS  |  Email |Print

Iron ore’s surprise rally may be a thing of the past in just three months. Rising supply will top demand once more and the sudden jump in speculative trading in China that’s helped support gains is set to fizzle out, according to Brazil’s Itau Unibanco Holding SA.
The commodity will probably soon be back below $50 a metric ton, and may end the year at about $42, Artur Manoel Passos, an economist in Sao Paulo at Latin America’s largest bank by market value, said in an interview. Last week, iron ore traded as high as $70.46………………………………………..Full Article: Source

Iron ore, steel lead China commodities retreat as curbs bite

Posted on 28 April 2016 by VRS  |  Email |Print

A major Chinese commodities exchange took further steps to calm volatile markets on Wednesday, hiking transaction fees and widening trade limits in a move that could make exiting futures contracts more orderly.
Iron ore and steel futures fell again in reaction to higher trading costs, brought in to deter speculative investors believed to be behind last week’s spike in prices and volumes that had stoked fears of a destabilizing crash. The Dalian Commodity Exchange said it would double the transaction fees on steelmaking raw materials coking coal and coke futures from Thursday, the fourth increase in a week………………………………………..Full Article: Source

Speculators march into China commodities

Posted on 28 April 2016 by VRS  |  Email |Print

At the start of the year western commodity traders knew China, the world’s biggest consumer of raw materials, would play a decisive role in the direction of markets. What they did not know was that it would be Chinese investors as much the country’s economic prospects driving prices.
In the past month near mania has gripped China’s commodity futures markets with day traders and yield-hungry wealth managers pouring into a lightly regulated sector, often with astonishing results………………………………………..Full Article: Source

Saudi Arabia will struggle to kick its addiction to oil: Kemp

Posted on 28 April 2016 by VRS  |  Email |Print

“King Abdulaziz and the men who worked with him for the establishment of the state did not depend on oil and they established the kingdom without oil, and they ran this state without oil, and they lived in this state without oil,” Saudi Deputy Crown Prince Mohammed bin Salman said in an televised interview on Monday.
The deputy crown prince criticised the kingdom’s subsequent “addiction” to oil which has “disrupted the development of many sectors in the past years” implying this was a relatively recent problem………………………………………..Full Article: Source

China acts to cool frenzied speculation in commodities

Posted on 27 April 2016 by VRS  |  Email |Print

China has moved to clamp down on excessive speculation in commodities after weeks of frenzied trading boosted prices and ignited fears of another bubble in its domestic markets.
Iron ore and steel futures in China fell back again yesterday after the authorities raised transaction costs to cool rapid gains that had raised concerns that an unstable speculative bubble was forming. However, other commodity futures, including coking coal, kept surging………………………………………..Full Article: Source

All that glitters isn’t gold. It’s silver

Posted on 27 April 2016 by VRS  |  Email |Print

Silver has given a 14.3% returns in April alone, over the first quarter of 2016, riding on Chinese demand which is likely to spark interest among investors who had missed the recent rally in the metal.
“The metal is on consolidation mode and the current upside is expected to continue, and investors are likely to participate in the metal in the coming weeks,” Himanshu Gupta, senior market strategist, Karvy Commodities Broking, said………………………………………..Full Article: Source

Steel Speculation Obscures Signals About Chinese Economy

Posted on 27 April 2016 by VRS  |  Email |Print

Investors searching for clues about China’s economy have looked to commodities like iron ore and rebar as a sign of industrial health. Now, speculation in the market is obscuring those signals, some say.
Trading of iron ore futures on the Dalian exchange is up fivefold from a year ago, according to Goldman Sachs Group Inc. Volumes during two days in the past month surpassed the amount of iron ore actually imported by China last year, the bank’s analysts say………………………………………..Full Article: Source

China’s commodities rebound: it’s for real

Posted on 26 April 2016 by VRS  |  Email |Print

Recent signs of a revival in Chinese demand for commodities such as iron ore have been met with scepticism. But there may be stronger grounds for optimism than many think, according to analysis by FT Confidential Research, a unit of the Financial Times.
Behind the argument against a recovery in China’s demand is the idea that the structure of its economy has changed to one that uses substantially smaller amounts of commodities. Proponents of this view argue that the economy is shifting from one driven by fixed-asset investment and industrial output, to less commodity-intensive areas such as consumer spending and services………………………………………..Full Article: Source

Morgan Stanley Says China Commodity Jump Stuns World Markets

Posted on 26 April 2016 by VRS  |  Email |Print

The recent spike in speculative trading in commodities in China has stunned global markets, according to Morgan Stanley, which cited a jump in local activity for steel, iron ore and cotton as well as eggs and garlic. “Now China’s speculators engage commodities,” analysts including Tom Price and Joel Crane said in an e-mailed note on Monday. “China’s latest speculative spike has stunned global markets.”
Trading in China of commodity derivatives including steel rebar surged last week after data showing a rise in credit in the world’s top commodity user spurred speculation that prices may extend gains as demand improved………………………………………..Full Article: Source

Commodities react like a canary in a coal mine

Posted on 26 April 2016 by VRS  |  Email |Print

Commodities are suffering from a negative sector sentiment, independent of supply and demand dynamics. This is largely because concerns about Europe and the US getting trapped into recession and Chinese President Xi Jinping’s ability to steer the country’s economy into soft landing refuse to go away.
No doubt commodities will be the first in the line of price collapse if recession hits the world. That is why Vedanta Resources chief executive officer Tom Albanese loves to describe the “commodities sector as a canary in a coal mine”. Albanese doesn’t think global recession will happen. But, the thought of demand could take a hit is leading people to cut their commodities exposure………………………………………..Full Article: Source

When commodity prices plunge

Posted on 26 April 2016 by VRS  |  Email |Print

The steady decline in primary commodity prices over the past four years, especially last year, shows financialisation of commodities has amplified instabilities. There was a period in the 2000s when primary commodity prices appeared to have bucked their long-term trend of stagnation or decline.
Between the trough of December 2001 and the peak of August 2008, the price index for all primary commodities (in US dollar terms) rose by 445 per cent — nearly four and a half times. This increase came after a decade of relative stagnation in nominal dollar prices (which reflected a decrease in relative prices of commodities) over the previous decade………………………………………..Full Article: Source

Commodity turnaround sparks bonds bounce and opportunities for the brave

Posted on 26 April 2016 by VRS  |  Email |Print

Commodity prices have rallied over the past few months, as have shares in the miners who extract them. It has been a fantastic ride if you managed to get on board at the low point.
Just to put it into perspective, the price of iron ore recorded in the Mid-Year Economic and Fiscal Outlook just before Christmas at an assumed $US39 a tonne has recently climbed to about $US70. You would have had to be brave and, just like riding the crest of those big waves in Hawaii, could have suffered a serious crash. So you are justly rewarded for taking the risk………………………………………..Full Article: Source

Saudi Arabia’s Break-Even Oil Price Plunges as Spending Drops

Posted on 26 April 2016 by VRS  |  Email |Print

Saudi Arabia will see the biggest drop this year in the oil price needed to balance its budget as Riyadh curbs spending amid the crude-market rout. The kingdom’s fiscal break-even will fall to $66.70 a barrel from $94.80 in 2015, the International Monetary Fund said on Monday.
The 30 percent drop is the steepest among a group of Middle East and North African OPEC members reviewed by the IMF. While that break-even remains above current market prices, the trend shows Saudi Arabia is adjusting to the slump in crude triggered by its November 2014 decision to push the Organization of Petroleum Exporting Countries to change strategy and fight for market share. ……………………………………….Full Article: Source

OPEC’s grip might loosen, but it still has pull

Posted on 26 April 2016 by VRS  |  Email |Print

OPEC counts 13 countries among its membership, but one of them has long reigned as a first among equals. Saudi Arabia, with its production of around 10.2 million b/d representing about a third of the group’s output — and about 11% of world supply — has served as OPEC’s de facto leader, its swing capacity traditionally leading the organization’s efforts to manage the market.
But last week’s failed talks in Doha to enact a production freeze saw a potential new oil producer group emerge with another player in the room that could have changed the dynamics of the market and challenged Saudi political eminence in world oil affairs………………………………………..Full Article: Source

Without alliance with Russia, OPEC is powerless

Posted on 26 April 2016 by VRS  |  Email |Print

The failure at the Doha talks that were supposed to help put an end to oil price crisis showed to the whole world how divided the OPEC is. The agreement, that seemed to be almost there, was shattered, undermined by a longstanding Saudi-Iran rivalry.
Now, with a consensus once again pushed back, will the oil producers be able to find common ground? Why Saudi Arabia is putting its own economic wellbeing on the altar of political bickering? And finally, is the age of oil going through its final agony, or will the price for black gold rise again?……………………………………….Full Article: Source

Macro picture sees precious metal shine

Posted on 26 April 2016 by VRS  |  Email |Print

Gold generally finds favour among investors during periods of turbulence thanks to its reputation as a “safe haven” asset, so it is hardly surprising people are allocating to the metal once again this year.
Seven Investment Management’s multi-asset team has bought gold for the first time in three years, as reported by Investment Adviser earlier this month, showing fund managers are dipping their toes back into the asset class………………………………………..Full Article: Source

Goldman says commodities rally not backed by fundamentals

Posted on 25 April 2016 by VRS  |  Email |Print

The recent rally in commodity prices is not supported by fundamentals in the physical markets, Goldman Sachs said, adding that oil could see downside risks in the near term. “While this recent rally has the potential to run further to the upside … we believe that it is not yet driven by a sustainable shift in fundamentals,” Goldman Sachs analysts said in a note.
“Given the near-term and temporary nature of the current re-balancing and the lack of longer-term sustainable deficits in any of the markets, it is premature to embrace these ‘green shoots’ and shift to an ‘overweight’ recommendation in commodities.”……………………………………….Full Article: Source

China speculators drive commodities rally

Posted on 25 April 2016 by VRS  |  Email |Print

Higher oil price, signs of stronger growth and a wave of trading fuel recovery. Commodities from iron ore to aluminium have rallied this week driven by a sharp recovery in oil, signs of stronger growth, and a wave of trading on China’s exchanges.
Oil prices have risen for three straight weeks to top $45 a barrel. Many traders now expect the market to balance in the second half of this year following almost two years of oversupply — with recent low prices cutting into US output, slowing drilling worldwide, and bolstering demand………………………………………..Full Article: Source

Iran backs any move to stabilize oil market

Posted on 25 April 2016 by VRS  |  Email |Print

Minister of Petroleum Bijan Zangeneh says Iran will support any initiative to stabilize the oil market after recent talks in Qatar failed to freeze production. Zangeneh told reporters on the sidelines of a meeting with his South African counterpart in Tehran on Saturday that the meeting between OPEC and non-OPEC producers in Doha was a “good step.”
“Despite failing to have a result, the start of the negotiation was good for OPEC and non-OPEC to cooperate and for big OPEC producers to accept that they have to do something to change the situation,” he added………………………………………..Full Article: Source

Balanced oil market seen latest by 2017

Posted on 25 April 2016 by VRS  |  Email |Print

Crude market sentiments appear upbeat, despite the Doha debacle. Speculators are back in play, reports are asserting, betting that the worst is over and the glut may be easing. Strong gasoline consumption in the United States, increasing signs of declining production around the world and oilfield outages have underpinned a return to investment in the sector, traders are now insisting.
Oil prices were higher Friday as investors continued to buy back into commodities, betting oversupplied markets will ease later this year, Wall Street Journal said, quoting brokers and analysts. The rally now has oil up oil about 65% in two months, confounding all those who expected it to lose steam after OPEC failed to reach a deal to cap production………………………………………..Full Article: Source

Bullion Cues: China gets its own gold benchmark

Posted on 25 April 2016 by VRS  |  Email |Print

The new gold contract, based on the domestic market demand and supply dynamics, will help in better price discovery. China has launched a yuan-denominated gold contract which will act as the benchmark price for gold in the country.
It was only in November that the renminbi was included in the IMF’s SDR basket and it received the reserve currency status (to take effect in October 2016). The new gold contract, launched last week, is expected to help in better price discovery in gold as it will be based on the domestic market demand and supply………………………………………..Full Article: Source

Hong Kong’s local gold exchange to work with ICBC in launch of Shenzhen services

Posted on 25 April 2016 by VRS  |  Email |Print

Warehousing and physical settlement service planned for Qianhai free trade zone. The Hong Kong gold exchange has teamed up with Industrial and Commercial Bank of China (ICBC) to launch gold trading services in the Qianhai free trade zone in September, providing custodial and physical settlement service targeted at commercial users and precious metals traders, according to the exchange head.
Haywood Cheung Tak-hay, the honorary permanent president of the 105-year-old Chinese Gold and Silver Exchange Society, said the exchange has teamed up with ICBC to use its gold vault in Qianhai as a temporary bonded warehouse for Hong Kong traders and manufacturers to store their gold………………………………………..Full Article: Source

Commodities Rally Built on Shaky Foundations, Traders and Analysts Say

Posted on 22 April 2016 by VRS  |  Email |Print

A recent rally in agricultural commodities markets spurred by the prospect of weather damage to harvests looks vulnerable to a turnaround, traders and analysts said Thursday. “The chances of a correction are quite high,” said Fiona Boal, director at London-based Fulcrum Asset Management.
Flooding in Argentina is threatening to drown swaths of the soybean harvest, prompting traders to predict as much as 5% of the 2015-16 soybean crop—estimated by the USDA at 59 million metric tons—could be destroyed………………………………………..Full Article: Source

Oversupplied oil market to rebalance by next year, says IEA

Posted on 22 April 2016 by VRS  |  Email |Print

International Energy Agency expects production outside Opec cartel to fall sharply this year. The International Energy Agency (IEA) said it expects the oversupplied oil market to rebalance by next year, as non-Opec production records its biggest decline in a generation.
An oil glut has prompted a slump in crude prices from a peak of $115 (£80) a barrel in June 2014, but the IEA executive director, Fatih Birol, said on Thursday that production outside tOpec would fall sharply this year, by almost 700,000 barrels a day. He expects oil markets, and prices, to rebalance at the turn of this year, or by 2017 at the latest………………………………………..Full Article: Source

IEA predicts biggest non-Opec output fall in a quarter century

Posted on 22 April 2016 by VRS  |  Email |Print

The International Energy Agency (IEA) expects non-Opec output to fall this year by the most in 25 years. IEA chief, Faith Birol, added that low oil prices had cut investment by around 40 per cent over the past two years, particularly in the US, Canada, Latin America and Russia.
In its medium-term report released earlier this month, the IEA said that the oil market would gradually rebalance by 2017. Oil prices have tumbled around 60 per cent from over $110 per barrel in the middle of 2014………………………………………..Full Article: Source

China eyes more say in global gold pricing

Posted on 22 April 2016 by VRS  |  Email |Print

With the launch of its own gold price benchmark, China, the world’s biggest producer and consumer of gold, has more influence in the pricing of the precious metal. It will be some time, however, before “Shanghai Gold,” launched by the Shanghai Gold Exchange on Tuesday, can truly challenge the dominance of its international counterparts.
The fix, the Shanghai Gold Benchmark Price, was set at 260.39 yuan (US$40.20) per gram yesterday morning; by the afternoon the fix was 261.82 yuan. As the first gold price benchmark denominated in the Chinese currency, the fix is the quote for trading of 1 kilogram of 99.99 percent purity bullion, derived from multiple rounds of trading………………………………………..Full Article: Source

Commodities slump has not created a buyer’s market for mines

Posted on 21 April 2016 by VRS  |  Email |Print

Wanted: One mine, just started or close to production, preferably gold, must be in secure country with high-quality ore body and low costs. Also, must be cheap.
The above shopping list was the most common response from investors when quizzed about what they are looking for in the commodity sphere during last week’s Mining Investment Asia conference in Singapore. The near impossibility of satisfying the requirements probably explains why there aren’t that many mining deals actually being done, despite the low prices for many commodities………………………………………..Full Article: Source

Why the oil market didn’t need the Doha freeze after all

Posted on 21 April 2016 by VRS  |  Email |Print

When markets opened Monday morning, the price of oil dropped like a rock, as the market absorbed the news that the much anticipated oil production freeze meeting in Doha, Qatar didn’t amount to much. But oil soon recovered and traded Tuesday above $42 US a barrel.
Why? Is it because of a strike by oil workers in Kuwait? Or pipeline sabotage in Nigeria? Partly. But energy analysts say it’s also because the global oil market didn’t really need the Doha agreement. It’s already in the midst of re-balancing itself………………………………………..Full Article: Source

Oil market rebounds to 2016 highs as US data offers bullish surprise

Posted on 21 April 2016 by VRS  |  Email |Print

The oil market staged a dramatic rebound in late trade to return to 2016 highs after unexpectedly low US supply data trumped market concerns over the abrupt end to strike action in Kuwait.
The anticipated increase in Kuwaiti supply following the sooner than expected end to a three-day oil worker strike late on Tuesday pushed the benchmark Brent crude price down more than 2.5pc to lows of $43 a barrel by Wednesday morning. But a surprising weekly US oil stock report triggered a late 4.5pc surge to just over $45 by 18:00 BST………………………………………..Full Article: Source

Russia Energy Minister Unsure OPEC Will Agree to Freeze Oil Output

Posted on 21 April 2016 by VRS  |  Email |Print

Russian Energy Minister Alexander Novak told news agencies Wednesday that he wasn’t sure oil-producing countries would be able to reach a deal to freeze production, but that the need to do so might decrease in the coming months.
“I wouldn’t say now that we are sure they will be able to agree among themselves, because there are very diverse positions,” Mr. Novak said. He cautioned against dubbing the inconclusive meeting with the Organization of the Petroleum Exporting Countries in Doha last week a failure, but said Saudi Arabia had been “unauthorized” to change its position at the last minute………………………………………..Full Article: Source

Iraq Says OPEC, Others to Meet on Oil Freeze, Perhaps in May

Posted on 21 April 2016 by VRS  |  Email |Print

Major OPEC and other crude producers will meet in Russia, possibly next month, in a new push to agree on an output freeze to shore up oil prices, Iraq’s Deputy Oil Minister Fayyad Al-Nima said.
Iraq sees oil prices rising slowly despite the failure of OPEC and other producers including Russia to reach an agreement on an output freeze in Doha on April 17, Al-Nima, who assumed the duties of oil minister after Adel Abdul Mahdi suspended his participation in the cabinet last month, said in a phone interview on Wednesday. There is still no agreement on an oil meeting in May, Russian Energy Minister Alexander Novak said after Al-Nima’s comment………………………………………..Full Article: Source

Silver surges to best performing commodity

Posted on 21 April 2016 by VRS  |  Email |Print

Grey metal outpaces gold this year and is also ahead of equities. An explosive two-week rally has made silver one of the best performing commodities this year, fuelled by a surge in interest from hedge funds and Chinese traders after it fell to an uncommonly large discount to gold.
Silver has now outpaced gold in terms of gains as the metal has rallied 14 per cent in 11 days to $17.05 a troy ounce. This year it is up 23 per cent, the best performer in the Bloomberg commodity index, trouncing the 2.3 per cent for the FTSE All-World index of global shares………………………………………..Full Article: Source

Commodities Post Best Rally Since August as Citi Sees Gains

Posted on 20 April 2016 by VRS  |  Email |Print

Supply concerns are resurfacing for commodities from crude oil to soybeans, sparking the biggest rally for raw materials since August. The Bloomberg Commodity Index, a measure of returns for 22 components, jumped percent 2.4 to 82.6543 on Tuesday, the biggest gain since Aug. 27. Oil in New York climbed as much as 4.4 percent, corn reached a six-month high and silver entered a bull market.
After five straight years of losses, commodity markets are rebounding as supply overhangs start to subside. Unfavorable weather is threatening soybean output in South America, while the start of a La Nina pattern this year could bring dry weather to U.S. grain-producing regions………………………………………..Full Article: Source

Oil market in temporary balance as supply disruptions buoy price

Posted on 20 April 2016 by VRS  |  Email |Print

Strike in Kuwait and news of outages in Nigeria and Venezuela bolster crude market. A workers’ strike in Kuwait that has temporarily halved its crude output and a string of global supply disruptions propelled oil prices higher on Tuesday.
Brent, which had sunk to almost $40 a barrel on Monday after talks between some of the biggest producers in Doha collapsed, rose as much as $1.34 to $44.25 on Tuesday. West Texas Intermediate, the US benchmark, rose $1.49 to $41.26 a barrel………………………………………..Full Article: Source

Fumbled talks reveal much about OPEC, oil market

Posted on 20 April 2016 by VRS  |  Email |Print

​It’s difficult to see what purpose the once-mighty OPEC serves following Sunday’s spectacular flop of much-anticipated talks to freeze oil production and drive up prices. This was the first substantial effort in a decade and a half to co-ordinate both OPEC and non-OPEC countries in a freeze that would boost prices, yet it ended in only more confusion across energy markets.
Prices have been battered since late 2014 after OPEC rejected calls to rein in an oversupply of 1.3 million barrels a day — but they began rising sharply in recent weeks on rumours that top producers Saudi Arabia and non-OPEC Russia would push for the freeze………………………………………..Full Article: Source

Shanghai gold fix aims China towards global pricing power

Posted on 20 April 2016 by VRS  |  Email |Print

Yuan-denominated benchmark for the metal is a sign of China’s growing clout in the world. The yuan-denominated gold benchmark debuted in Shanghai yesterday as China took a step forward in vying to be a global price-setter for the precious metal.
The gold fix is also the latest sign that Beijing will continue to expand the role of its currency to match the country’s increasing economic might. The gold benchmark launched by the Shanghai Stock Exchange is based on a 1 kilogram-contract and was set at 256.92 yuan yesterday morning………………………………………..Full Article: Source

Silver’s Surge Means It’s Closing the Gap on Gold

Posted on 20 April 2016 by VRS  |  Email |Print

As gold prices have surged this year, silver has lagged far behind. Now, the metal known as “poor man’s gold” is starting to play catch up. On Tuesday, silver hit its highest level in more than 10 months, and its more than 4% gain helped silver narrow its price gap with gold.
The gold-to-silver ratio fell to its lowest level in four months on Tuesday at 74. In March, the ratio hit its highest level since 2008 at 83, according to FactSet data. That recent divergence in price has sparked some buying in silver, as traders bet that the ratio between gold and silver will revert back to its average level………………………………………..Full Article: Source

China alumina prices supported as SHFE aluminum hits 8-month high

Posted on 20 April 2016 by VRS  |  Email |Print

The Platts ex-works Shanxi alumina spot assessment stood at Yuan 1,980/mt ($306/mt) full cash terms on Tuesday, up Yuan 20 from Monday, up Yuan 30 on the week and Yuan 50 on the month. Alumina prices have been tracking domestic metal prices higher this week, and are expected to continue testing higher in the near term should aluminum prices remain supported, market participants said.
The front-month aluminum contract on the Shanghai Futures Exchange hit an eight-month high on Tuesday to close at Yuan 12,020/mt. The last time the SHFE price was above this level was on August 14, 2015, when the front-month price settled at Yuan 12,030/mt………………………………………..Full Article: Source

Weather May Threaten Commodity Markets

Posted on 20 April 2016 by VRS  |  Email |Print

When it comes to predicting commodity market moves for 2016, farmers and ranchers should look at past economic and weather trends across the globe. Jim Bower of Bower Trading says producers need to look on a more international scale than a local level for prices and risk management this year.
Bower: “The change in commodities is that it has gone very much international in scope. There is an international awareness. You really can’t get your pricing or your trading right unless you have the international backdrop. Now you can overlay it with technical factors which you can do yourself or with an advisor to fine tune your program. Don’t look at just the local or regional — look at the international that is where you get your success.”……………………………………….Full Article: Source

Commodities ‘humiliated’ while stocks head for record run

Posted on 19 April 2016 by VRS  |  Email |Print

Commodities have had a pretty humbling run recently. In fact, Bank of America Merrill Lynch calculates that long-term returns are now running at the weakest pace since… 1933. Time for the tide to turn? Chief investment strategist Michael Hartnett at the bank writes:
The most bullish argument for commodities today is “humiliation”. Similar to stocks in 2009, the rolling return from commodities is currently at a multi-decade low, indeed the lowest since 1933. And commodity producers and Emerging Markets at least offer the potential for lower rates and higher earnings per share over the medium term. The secular upside for commodities is thus greater than downside. We like gold………………………………………..Full Article: Source

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