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Commodities Briefing - Category | Market Moves more

Commodities Jump Most Since February as Corn, Soybeans Rally

Posted on 01 July 2015 by VRS  |  Email |Print

The outlook for smaller crop supplies sent corn and soybean prices surging, spurring the biggest gain for raw-material prices since February. The Bloomberg Commodity Index of 22 components rose 1.9 percent to 102.69 as of 3:30 p.m. in New York, on pace for the largest advance since Feb. 3. Corn soared the most since 2010, climbing 7.7 percent, the biggest gain among the asset class on Tuesday.
Heavy rains have slowed crop planting across the U.S. Midwest, while expanding livestock herds mean that there’s more grain being used in feed supplies. American farmers planted fewer corn acres than estimated three months ago, and domestic inventories as of June 1 were smaller than analysts were forecasting, a report from the U.S. Department of Agriculture showed Tuesday………………………………………..Full Article: Source

Basic Materials: China Slowdown Weighs on Commodities (With One Exception)

Posted on 01 July 2015 by VRS  |  Email |Print

We expect coal, copper, and iron ore prices to remain below long-term averages as China continues to shift away from an investment-led economy. The basic materials sector is trading close to our aggregate fair values at a median price/fair value of 0.97 compared with a market price/fair value of 0.99.
Mined commodity prices tied to China’s sun setting infrastructure and housing boom are unlikely to recover, but we see uranium as an exception to this story as China builds out its fleet of nuclear reactors. While we expect China’s housing market to eventually falter, the outlook for U.S. residential construction is better than most think, with implications for lumber and coatings companies………………………………………..Full Article: Source

New oil bull market in sight as Brazil, Iraq cut output targets

Posted on 01 July 2015 by VRS  |  Email |Print

Massive downward revisions to oil output in Brazil and Iraq have increased the risks for oil markets of going from the current feast to famine within just a few years, leading to a price spike that would give a new boost to the U.S. shale industry.
Brazil and Iraq had been expected to add over 2 million barrels per day to global supply by 2020 and another 2.5 million by 2025, becoming the two biggest contributors to help meet rising global demand, according to the long-term forecast of the International Energy Agency………………………………………..Full Article: Source

Is there a huge investing opportunity in the oil markets?

Posted on 01 July 2015 by VRS  |  Email |Print

A rare occurrence now happening on oil markets might be a huge opportunity for investors who play it right, says Tim Pickering, president and chief investment officer at Auspice Capital Advisors Ltd.
Pickering said Canadian crude prices are currently in “backwardation,” which means the future price is expected to be lower than the spot price, but every other crude oil market in the world is in contango, meaning the future price is expected to be higher than the spot. “For long-term investors in oil, this is a positive thing because it means they will not lose money as the market rolls over time,” he said in a commentary to clients………………………………………..Full Article: Source

Nickel Slides to 6-Year Low as Shanghai Eases Constraint

Posted on 01 July 2015 by VRS  |  Email |Print

Industrial metals from aluminum to tin capped the longest run of quarterly losses since 2001 on concern that a sputtering economy will erode demand in China, the world’s top consumer, while turmoil in Greece mounts.
This quarter, the London Metal Exchange’s gauge of six prices fell 5.5 percent, the fourth straight decline and the longest slump since September 2001. On June 27, China’s central bank cut its benchmark lending rate to a record and lowered reserve-requirement ratios for some lenders after equities plunged and local government bond sales drained liquidity………………………………………..Full Article: Source

Commodities Drop as Greek Turmoil Spurs Concern Demand Will Wane

Posted on 30 June 2015 by VRS  |  Email |Print

Commodities fell the most in a week on concern that Greece’s deepening financial crisis will threaten global economic growth and demand for energy and metals. The Bloomberg Commodity Index of 22 raw materials lost as much as 0.9 percent, the most since June 19. Energy products and industrial metals led declines, with crude oil dropping to a three-week low and nickel slumping to the lowest since 2009.
Greece shut its banks and imposed capital controls in a bid to avert the collapse of its financial system, increasing the risk that it will be forced out of the euro. After failing to reach a deal with creditors, the country will vote in a July 5 referendum on proposals needed to restore bailout aid………………………………………..Full Article: Source

Greece and China weigh on commodities

Posted on 30 June 2015 by VRS  |  Email |Print

Commodities did not escape the market turmoil caused by Greece’s capital controls and a hefty drop in Chinese equities, with the stronger dollar and risk aversion hitting raw materials led by oil and metals. ICE August Brent, the international benchmark that has traded within a tight range of $61-$66 a barrel for several weeks, fell $1.41 a barrel to $61.86. In the US, Nymex August West Texas Intermediate fell $1.23 a barrel to $58.40.
On the London Metal Exchange, amid a sea of red for industrial metals prices, nickel plumbed a six-year low. The metal, an ingredient for stainless steel, fell 4.6 per cent to $11,855 a tonne, while aluminium was off 1.5 per cent, copper fell 0.5 per cent, and tin dropped 2.5 per cent………………………………………..Full Article: Source

How Will An Iran Deal Impact The Global Oil Market?

Posted on 30 June 2015 by VRS  |  Email |Print

Analysts at Morgan Stanley Research recently polled 299 investors about the impact that a potential Iranian nuclear deal would have on the global oil market. Analyst Haythem Rashed summarized the survey results and noted important upcoming deadlines for oil investors to watch when it comes to the Iran negotiations.
Morgan Stanley asked poll participants how much Iranian oil exports will increase by the end of 2015 and into 2016. The most popular choice for 2015 was an incremental Iranian export increase of 200kb/d. Nearly 40 percent of respondents anticipate Iranian exports to increase by 200-300kb/d, while 15 percent of those polled see no change to Iran’s oil exports this year………………………………………..Full Article: Source

Jim Rogers Gold Correction Forecast

Posted on 30 June 2015 by VRS  |  Email |Print

A Jim Rogers gold prediction is taken seriously by investors. And today (Friday) we got a fresh Jim Rogers gold prediction courtesy of a MarketWatch interview. “Gold is in a correction, and the correction has gone on for four years,” Rogers said.
“Although I am not buying gold, I am expecting an opportunity to buy gold sometime in the next year or two. For instance, if gold goes under $1,000, I hope I’m smart enough to buy a lot more gold.” When Jim Rogers speaks, he is taken seriously by investors – and for good reason………………………………………..Full Article: Source

India: Agri commodities decline on higher acreage, favourable monsoon

Posted on 29 June 2015 by VRS  |  Email |Print

Prices of agri commodities declined by upto 14% so far this month on prospects of bumper output this kharif season following better than forecast monsoon rainfalls and higher acreage. While soybean price fell by 14% to trade at Rs 3444 a quintal in Indore mandi, chana slumped by 13% to Rs 4162 a quintal in New Delhi market. Jeera prices in Unjha (Gujarat) slipped by 11% to Rs 16035 a quintal. Others commodities also followed suit.
As per latest sowing data released by the Ministry of Agriculture, total area sown till June 26 stood at 16.56 million hectares, up by a staggering 23% from the same time last year. Kharif crop sowing picked up during last week following spread of rainfalls. While pulses sowing moved up by 80%, cereals and oilseeds sowing rose by 15% and 427% respectively………………………………………..Full Article: Source

Saudi Kingdom, Russia vie for global oil market foothold

Posted on 29 June 2015 by VRS  |  Email |Print

In the rapidly changing geopolitical environment, Saudi Arabia and Russia are forging ahead - fostering a closer relationship - in major sectors including the all important energy sector. When the Saudi Deputy Crown prince Mohammad bin Salman, accompanied not only by the Foreign Minister Adel bin Jubeir but also the Petroleum Minister Ali Al-Naimi called on Russian President Vladimir Putin in St. Petersburg on June 18, six major deals were signed between the world’s two top crude producers.
The deals ranged from agreement in defense sector to enhanced cooperation in energy development. It also covered greater cooperation on nuclear energy development. Citing unnamed sources, Al-Arabiya reported the kingdom planned to build 16 nuclear reactors and Russia has agreed to play a significant role in operating them………………………………………..Full Article: Source

US becomes biggest oil producer in 2014, surpasses Saudi Arabia

Posted on 29 June 2015 by VRS  |  Email |Print

The United States has overtaken Saudi Arabia as the world’s biggest oil producer in 2014 while India has recorded the highest growth in energy consumption among major economies. The US produced 15.9 per cent more oil in 2014 at 11.6 million barrels of oil per day to topple Saudi Arabia’s 11.5 million bpd production, according to BP Plc’s Statistical Review of World Energy released on Wednesday.
Russia with 10.8 million bpd oil production was placed third. The US surpassed Russia as the world’s largest producer of oil and gas, producing 1,250.4 million tons of oil and oil equivalent natural gas in 2014. This compared with Russia’s 1,062 million tons of oil equivalent. BP said the US shale revolution helped it overtake “Saudi Arabia as the world’s biggest oil producer and surpass Russia as the world’s largest producer of oil and gas.”……………………………………….Full Article: Source

This could be the tipping point for oil prices

Posted on 29 June 2015 by VRS  |  Email |Print

Record oil production meeting a wave of surprisingly strong demand has reined in world oil prices, creating a delicate balance that could be tipped either way—and the most immediate catalyst may be Iran’s nuclear talks.
The market has been awaiting the outcome of the negotiations ahead of a June 30 deadline, as an agreement could put 1 million barrels of Iranian crude back on the market eventually. U.S. crude futures have been locked between $57 and $62 per barrel—since late April………………………………………..Full Article: Source

OPEC crude market share shrinks to 12-year low

Posted on 29 June 2015 by VRS  |  Email |Print

Booming U.S. shale production helped cut OPEC’s global crude market share to a 12 year low last year. According to OPEC’s Annual Statistical Bulletin, the group’s share of the global crude market sank to 41.8 percent in 2014, down from 43.3 percent the year before.
The 1.5 percent slide marks OPEC’s lowest crude market share level since 2003, Bloomberg News said. According to the bulletin, Libya accounted for over half of OPEC’s output decline as two rival governments continue to fight for control of the oil rich country………………………………………..Full Article: Source

Silver Prices About to Hit $50.00?

Posted on 29 June 2015 by VRS  |  Email |Print

Silver is one of the most underappreciated commodities around. Back in 2011, an ounce of gold was worth 32 ounces of silver. Today, that same ounce of gold translates to 74 ounces of the grey metal. Does that mean gold has gotten more valuable or that silver has gotten cheaper?
Since its peak a few years ago, silver prices have dropped nearly 70%. Gold prices have also fallen by an astonishing 35% during the same period, which convinces me that investors got overly pessimistic about silver during the pullback. So, what should the true price of silver be?……………………………………….Full Article: Source

Oil Tankers Are Filling Up and Raking It In

Posted on 26 June 2015 by VRS  |  Email |Print

The oil-tanker market is heating up, a development some analysts say is a warning flare that signals further price declines for crude. The Baltic Dirty Tanker Index, which tracks the rates to hire oil tankers plying 16 routes, has shot up 25% this month, as global oil output continues to grow. The index is now at its highest level since January 2014.
But an increasing number of these oil cargoes have nowhere to go. Oil producers and traders are rushing to lease tankers while they scramble to find buyers, effectively turning these ships into floating storage facilities. The oil-supply glut has worsened since the Organization of the Petroleum Exporting Countries earlier this month decided to maintain crude-output levels………………………………………..Full Article: Source

ICBC interested in joining London gold price benchmark

Posted on 26 June 2015 by VRS  |  Email |Print

China’s Industrial and Commercial Bank of China (ICBC) is interested in participating in the London gold price benchmarking process, the bank said. “While many western banks are exiting the commodity business, Chinese banks see it as a great opportunity,” Zhou Ming, ICBC general manager, said on Thursday.
Last week, Bank of China (BOC) became the first Chinese bank to participate in the LBMA Gold Price, which formally replaced the near-century-old London Gold Fix on March 20. Standard Chartered and Morgan Stanley have also signed up, the LBMA said on Monday this week, bringing the total number of participants to 10 alongside JP Morgan Chase Bank, Scotiabank, HSBC, Société Générale, UBS, Barclays and Goldman Sachs………………………………………..Full Article: Source

US economy contracts 0.2% in first quarter

Posted on 25 June 2015 by VRS  |  Email |Print

The US economy contracted in the first three months of the year, just not as much as previously estimated. The Commerce Department says gross domestic product shrank at a seasonally adjusted annual rate of 0.2 per cent from January through March. That’s better than last month’s estimate of a 0.7 per cent decrease.
Harsh winter weather slowed spending by keeping US consumers away from shopping malls and car dealerships. The US trade deficit ballooned, slicing growth by the most since 1985 as exports fell and imports rose. Imports increased 7.1 per cent in the first quarter, while exports fell 5.9 per cent………………………………………..Full Article: Source

OPEC’s crude market share fell to lowest since ’03 last year

Posted on 25 June 2015 by VRS  |  Email |Print

OPEC said its share of the global crude oil market last year declined to the lowest level since 2003, underscoring the motive for the group’s current push to defend sales volumes. The Organization of Petroleum Exporting Countries’ share of the global crude market dwindled to 41.8% in 2014, from 43.3% the previous year, according to the group’s Annual Statistical Bulletin.
Libya accounted for more than half the output reduction. OPEC’s 12 members pumped an average of 30.68 MMbopd last year, according to the report by the group’s Vienna-based secretariat………………………………………..Full Article: Source

OPEC’s Strategy and Iran’s Sanctions Impact the Crude Oil Market

Posted on 25 June 2015 by VRS  |  Email |Print

OPEC (Organization of the Petroleum Exporting Countries) produces 40% of the global crude oil production. It has a 60% share in global crude oil exports. OPEC member nations produced 31.2 MMbpd (million barrels per day) of crude oil in May 2015—compared to its target of 30 MMbpd.
On June 5, 2015, OPEC decided to maintain its collective output target of 30 MMbpd of crude oil for the next six months. The consensus of a massive production strategy will drive crude oil prices lower. Lower oil prices impact US shale oil producers like Whiting Petroleum (WLL), Continental Resources (CLR), and Marathon Oil (MRO). They also impact oil and gas ETFs like the SPDR S&P Oil & Gas Exploration & Production ETF (XOP) and the Select Sector SPDR Fund ETF (XLE)………………………………………..Full Article: Source

Indian gold industry hoping for government to limit cheap imports, boost prices

Posted on 25 June 2015 by VRS  |  Email |Print

The gold industry in India is hoping the government will restrict cheap imports from Southeast Asian countries that have soared recently under free trade agreements, and help struggling dealers and jewellers suffering from low prices, sources said.
India’s finance ministry and foreign trade departments are currently in discussions over renegotiations of its free trade agreements with Thailand and ASEAN countries, which currently benefit from import duties as low as 1%, according to sources. “There are mixed reactions but most people are said to be on side for license/control for import of dore bars and jewellery,” said a dealer in Ahmedabad and a member of the city’s gold council………………………………………..Full Article: Source

China’s Gold Demand Seen Getting a Boost If Stock Rally Fades

Posted on 25 June 2015 by VRS  |  Email |Print

China’s gold demand may rise if the country’s stock market reverses its rally, according to the World Gold Council. Demand in the world’s largest user may rise as high as 1,000 metric tons, a nearly 3 percent increase from last year, Roland Wang, China director of the London-based group, told reporters in Shanghai on Wednesday.
Consumption sank in the first quarter as investors flocked to the Shanghai Composite Index’s 16 percent gain while bullion prices stalled. “We will be more confident to say China’s demand in 2015 will beat 2014 if we see an end of the stock market rally and a start of a gold price surge,” Wang said………………………………………..Full Article: Source

Kuwait oil minister says oil price drop unlikely

Posted on 24 June 2015 by VRS  |  Email |Print

Kuwait’s oil minister said on Tuesday he expected oil prices to continue rising, predicting gains in the final quarter of 2015 on the back of global growth. “All indicators point to an improvement in prices … today we have reached the stage where a fall is difficult, a fall has now become unlikely,” Ali Saleh al-Omair told reporters.
Omair also said costs for the country’s al-Zour refinery were expected to increase by around 1 billion Kuwaiti dinars ($3.31 billion) pushing up total cost to more than 5 billion dinars. A Kuwait National Petroleum Company spokesman had said on Monday the start-up of the refinery would be delayed as the company was seeking more financing on the back of rising construction costs………………………………………..Full Article: Source

Oil price to reach $82 per barrel in early 2016, hedge fund says

Posted on 24 June 2015 by VRS  |  Email |Print

Insch Capital Management, a Swiss hedge fund, said that the market is oversold and projected that crude oil will be trading at more than $80 per barrel by early 2016. Such an increase would equate to a near-50 percent surge in price. The optimistic forecast forms the basis of Insch Capital Management plans to increase its positions in the sector.
The hedge fund said it is looking to add oil properties to its portfolio, as some producers will be forced to sell off assets at bargain prices to cover lower income. “After the recent crude oil price declines, the oil rig count has dropped precipitously,” Insch said. “Many oil companies are being forced to sell properties in order to repay bank debt.”……………………………………….Full Article: Source

Russia Pips Saudi Arabia in Race to Grab China Oil Market Share

Posted on 24 June 2015 by VRS  |  Email |Print

Russia surpassed Saudi Arabia to become China’s top crude supplier as the fight for market share in the world’s second-largest oil consumer intensifies. China imported a record 3.92 million metric tons from its northern neighbor in May, according to data emailed by the Beijing-based General Administration of Customs on Tuesday.
That’s equivalent to 927,000 barrels a day, a 20 percent increase from the previous month. Saudi sales slumped 42 percent from April to 3.05 million tons. China is becoming a key market for global oil exporters as surging output from shale fields from Texas to North Dakota allows the U.S., the biggest crude consumer, to rely less on overseas supplies……………………………………….Full Article: Source

The world is awash in oil — is Canada making it worse?

Posted on 24 June 2015 by VRS  |  Email |Print

Collectively, Canada’s energy sector lost more than $600 million in the first three months of this year, and the Canadian economy shrank in the same period, as the collapse in oil prices took its toll. Now, nearly 18 months after it started, the oil glut continues.
At its worst point this spring, the world was producing four million barrels per day more than was being consumed. And Canada is playing a role in that oversupply. Just last week, in fact, Imperial Oil announced that the second phase of its Kearl oilsands operation had started production ahead of schedule. When it fully ramps up in the coming months, the expansion alone will add 110,000 barrels per day to Kearl’s production. That’s around 40 million barrels in a year just from one expansion………………………………………..Full Article: Source

Gold Market To Watch Greece Turmoil, U.S. Dollar

Posted on 24 June 2015 by VRS  |  Email |Print

Gold is expected to remain caught in a tug of war between the U.S. dollar and safe-haven demand as Greece’s repayment deadline quickly approaches, according to commodity analysts. Gold is ending its second consecutive week in positive territory; the market managed to hold on to most of its gains from Thursday’s 1.5% rally. Comex August gold futures settled Friday’s session at $1,201.90 an ounce, up almost 2% since Monday.
The rally in gold also appears to have helped drive silver prices higher as it managed to end its four-week slump. Comex July futures settled Friday at $16.109, up 1.3% on the week. Looking ahead, despite gold’s strong late-week performance, retail investors are still negative on the metal while commodity analysts have moved to the sidelines, according to the results of Kitco News’ Wall Street vs Main Street Weekly Gold Survey………………………………………..Full Article: Source

Morgan Stanley Commodity Outlook Lifts Vale as Ibovespa Declines

Posted on 24 June 2015 by VRS  |  Email |Print

Morgan Stanley’s improved forecast for steel sparked a rally in Vale SA, the world’s largest iron-ore producer. The Ibovespa retreated as Petroleo Brasileiro SA wiped out its earlier advance. Vale extended this month’s gain after the New York-based firm said construction plans in China, Brazil’s top trading partner, will boost demand for the steelmaking ingredient.
A Goldman Sachs Group Inc.’s report predicting lower prices for iron ore had sent the shares down on Monday. “Iron ore has somehow stabilized after all that pessimism,” Otavio Vieira, who helps oversee 250 million reais ($80.5 million) as a partner at Fides Asset Management, said by phone from Rio de Janeiro………………………………………..Full Article: Source

The Potential Impact Of Easing Indonesian Nickel Export Restrictions On Vale

Posted on 24 June 2015 by VRS  |  Email |Print

Vale is a diversified mining company and the world’s largest iron ore producer. Though iron ore sales account for a majority of the company’s revenues, Vale also has interests in the mining of base metals, particularly copper and nickel.
Vale is among the world’s largest producers of nickel, and prices of the metal can have a significant impact upon the company’s stock price. Nickel is mainly used in the production of stainless steel. With demand for stainless steel mainly correlated with industrial activity, prices of the metal have suffered due to weakness in Chinese economic growth………………………………………..Full Article: Source

Currency Markets Check Plumbing on Potential Greek Spasm

Posted on 24 June 2015 by VRS  |  Email |Print

The operator of a key piece of the foreign-exchange market’s financial plumbing says it’s readying its systems for potential spasms in trading if Greece leaves the euro. “It makes sense to prepare your systems for all eventualities,” said Dino Kos, the head of global regulatory affairs at CLS Group Holdings AG. “We are certainly doing so at CLS.”
CLS settles more than $5 trillion of currency transactions every day. It was established in 2002 to eliminate the risk that a party to a currency trade would fail to deliver an asset after the transaction had been executed. U.S. regulators have designated it a Systemically Important Financial Market Utility whose failure could threaten market stability………………………………………..Full Article: Source

Oil markets stable, Russian minister says

Posted on 23 June 2015 by VRS  |  Email |Print

From the Russian perspective, the situation in the global crude oil market is starting to stabilize, the minister of economic development said. Crude oil prices starting in June 2014 began a steady decline, dropping from levels above the $100 per barrel mark to below $50 per barrel in early 2015. A year on, Russian Minister for Economic Development Alexei Ulyukayev said “the oil market has attained certain stability.”
Brent crude oil prices have hovered in a range between $63 per barrel and $65 per barrel for most of June. Oil prices have been responding to signs an oversupplied market scenario was easing in a tepid, but steadily growing, global economy………………………………………..Full Article: Source

Decline in Oil Prices Has No Serious Impact on Russian Economy – BP Chief

Posted on 22 June 2015 by VRS  |  Email |Print

The weakening of the ruble helped Russia deal with the recent decline in global oil prices much better than other countries, BP CEO Robert Dudley said. Russia is dealing with the price shock over the decline in global oil prices much better than other countries because of the weaker ruble, Robert Dudley, CEO of British oil-giant BP, said during the International Economic Forum in St. Petersburg.
According to Dudley, cost adjustment is now highly needed in the oil industry, because hopes for increasing prices cannot be used as a real strategy. “We are getting out of the heavy shock period after the decline in oil prices,” he said……………………………………….Full Article: Source

Shale Watch: Lower Breakeven Prices Mean U.S. Can Keep Oil Flowing

Posted on 22 June 2015 by VRS  |  Email |Print

U.S. shale has nothing to fear from the current low oil price environment, which has seen crude prices fall 40 percent since June last year. Research by Bloomberg New Energy Finance shows that a reduction in the cost of drilling and completing wells has brought breakeven prices for the big tight oil plays several dollars below the current WTI price of around $60 a barrel.
The “Big Three” U.S. light tight oil plays — the Eagle Ford, Bakken and Permian — all break even several dollars below WTI, at $47, $53 and $52 a barrel, respectively, according to BNEF research. The collapse in oil prices has led to a corresponding downturn in the costs of drilling and completion services. This means that the same well that may have cost $8 million when oil was trading cost $6 million. This, in turn, means that breakeven prices have come down by as much as $20 a barrel………………………………………..Full Article: Source

Yellen Surprises Gold Bulls in Retreat by Reigniting Price Rally

Posted on 22 June 2015 by VRS  |  Email |Print

Janet Yellen took the gold market by surprise. Bullion had its biggest rally in a month after Federal Reserve Chair Yellen and her fellow policy makers cut their long-term projections for U.S. interest rates. Money managers had anticipated officials would tighten monetary policy faster and reduced their net-long position in gold to a five-week low the day before the central bank’s statement.
The outlook for gradual rate increases sparked renewed investor interest, and more than $880 million was added last week to the value of assets in exchange-traded products backed by the metal. Higher rates curb bullion’s allure because the commodity doesn’t pay interest or give returns like other assets such as bonds and equities. The Bloomberg Dollar Spot Index fell for two straight weeks………………………………………..Full Article: Source

All eyes on Greece for base metals’ movement

Posted on 22 June 2015 by VRS  |  Email |Print

Base metals are likely to remain sideways in the coming weeks due the fear of a default by Greece and weakening demand from China, the world’s largest consumer. Euro zone leaders have convened an emergency meeting on Monday to try to avert a Greek default and achieve a resolution with creditors. Meanwhile, bank withdrawals accelerated resulting into falling government’s revenue as Athens and other international creditors remained deadlocked over the debt deal.
Also, weakness in Chinese demand has created a pressure on base metals. Consequently, copper prices fell by 3.83 per cent last week to settle on Friday at $5,663 a tonne. Nickel and aluminium also moved down by 3.56 per cent and three per cent to end the week at $12,600 a tonne and $1,650.5 a tonne, respectively. Other metals also followed suit………………………………………..Full Article: Source

Falling commodity prices slow New Zealand economy

Posted on 19 June 2015 by VRS  |  Email |Print

New Zealand’s economy grew slower than expected in the quarter ending March, prompting analysts to forecast another interest rate cut next month. Gross domestic product (GDP) rose by 0.2 percent in the March quarter, down from 0.7 percent in the previous quarter, the government statistics agency said Thursday.
The lower growth reflected a 2.9-percent fall in primary industries, the largest fall since September 2010, according to Statistics New Zealand. “Oil and gas were big factors in the lower GDP growth this quarter,” national accounts manager Gary Dunnet said. “There was less extraction and exploration, as international prices fell.”……………………………………….Full Article: Source

Saudis seen escalating battle for global oil market share

Posted on 19 June 2015 by VRS  |  Email |Print

Not content with the blow it’s dealt to US oil drillers, Saudi Arabia is set to escalate the battle for market share by raising production to maximum levels. The world’s largest oil exporter has already increased output to a 30-year high of 10.3 million barrels a day in a bid to check growth from nations including the US, Canada and Brazil. It will add even more to the global glut, according to Goldman Sachs Group.
Citigroup predicts the kingdom will push toward its maximum daily capacity, which the bank estimates at about 11 million barrels, in the second half of 2015. Saudi Arabia steered the Organisation of Petroleum Exporting Countries in November to protect its market share in the face of swelling US crude output, rather than cut supplies to shore up prices as it did in the past………………………………………..Full Article: Source

Saudis Said to Discuss Sweetening India Oil Deals With Own Ships

Posted on 19 June 2015 by VRS  |  Email |Print

Saudi Arabia is said to be in talks with Indian oil buyers to ship crude on the Middle East supplier’s own tankers, potentially cutting the cost of cargoes. While the world’s biggest crude exporter won’t offer to sell its crude at a discount to its official selling price, it may pass on the benefit of lower shipping costs, four people with knowledge of the matter said, asking not to be identified because the talks are confidential.
The use of vessels owned by Saudi Arabia may reduce the cost of its supplies by 25 to 30 cents a barrel, two officials at two Indian refiners said. OPEC’s biggest member is seeking to defend market share amid competition from other suppliers and as refiners across Asia look for bargains from Europe to Mexico………………………………………..Full Article: Source

Gold price: Hedge funds scramble to cover 233 tonnes

Posted on 19 June 2015 by VRS  |  Email |Print

Gold on Thursday was clawing its way back to the $1,200 an ounce level, buoyed by dovish comments from the US Federal Reserve about the pacing of interest rate cuts which took some shine of the strong dollar. In brisk afternoon trade in New York, gold for delivery in August, the most active contract, added $25.50 an ounce or 2.2% from Wednesday’s close to exchange hands for $1,202.40 an ounce, the best level since May 22.
Lower-for-longer interest rates add to the allure of gold which produces no income and relies on price appreciation to attract investors. Worries about the economic impact of the Greek debt crisis and a weaker dollar also boosted the yellow metal which usually moves in the opposite direction to the greenback………………………………………..Full Article: Source

The commodities supercycle’s not dead, it has evolved - Barings

Posted on 18 June 2015 by VRS  |  Email |Print

With Chinese GDP growth moderating and demand for many commodities still lacklustre, it is understandable that the commodities supercyle’s obituary continues to be written. But, there are those that see it less as a death and more like a pupation, with the commodities complex in the midst of a transformation from a coal and iron ore driven caterpillar to a zinc and aluminium winged butterfly.
The Barings commodities team is one of those, pointing out in a note yesterday that the sharp falls in the prices of commodities like iron ore, thermal coal and oil, have prompted many observers to conclude that the cause for the falls (and, indeed the death of the supercycle) lies with China’s faltering economic activity………………………………………..Full Article: Source

Banks Balk at China Commodities Deals

Posted on 18 June 2015 by VRS  |  Email |Print

Once bitten, twice shy. Banks are wary of commodities deals in China a year after officials started investigating alleged fraud that led to a $193 million writedown for Standard Chartered Plc and $147 million at Standard Bank Group Ltd.
Traders in the world’s biggest consumer of metals are finding it harder to get credit from lenders after the probe at the eastern ports of Qingdao and Penglai, according to Guotai & Junan Futures Co. and Everbright Futures Co., Chinese commodity brokers whose clients include trading companies and financial institutions………………………………………..Full Article: Source

Forget $100: Will the oil market remember $80?

Posted on 18 June 2015 by VRS  |  Email |Print

May felt like a déjà vu month in the oil markets with crude attempting another rally, much like the one we saw in February, albeit at slightly higher levels, and once again failing to lift off. A strengthening US dollar and renewed focus on bearish supply-side fundamentals took the bounce out of Brent, which at one point in early May was perched at the year’s high within sight of $68/barrel.
The 5 June decision by the Organization of the Petroleum Exporting Countries (Opec) to leave its production ceiling untouched—predictable as it was—dragged the benchmark light sweet crude back to $62/barrel levels as the second week of June got underway………………………………………..Full Article: Source

Rouhani: Iran isolated from weak oil market

Posted on 18 June 2015 by VRS  |  Email |Print

Iran is less squeezed by the low price of oil than other export-dependent nations because of budgetary moves away from energy, the country’s president said. Iranian President Hassan Rouhani said the budget for the current Iranian year, which started March 21, is the least dependent on oil revenue ever for the country.
Crude oil prices are robbing major exporters like Russia of revenue, though Iran’s president said his country was largely shielded from those constraints. “All oil exporting countries, even those who plotted for an oil price decline, are facing problems due to this issue and our problems might be even less than this group,” he said………………………………………..Full Article: Source

Russia’s Sechin says U.S., not OPEC, rules oil markets

Posted on 18 June 2015 by VRS  |  Email |Print

Igor Sechin, the head of Russia’s top oil producer Rosneft, said on Wednesday the United States is calling the shots on global oil markets, while the influence of OPEC has shrunk. The United States emerged with renewed vigour as a top producer thanks to its shale boom. By refusing to curb its output to prop up oil prices, OPEC has tried to maintain its share in the global market, shrugging off lower prices which damage U.S. producers.
“In essence, the sole market, which has all the sets of financial and technological tools, is the U.S. market, which has became the key regulator,” Sechin told reporters, adding that oil prices in the United States set the tone of the global industry………………………………………..Full Article: Source

El Niño’s Pacific typhoon link threatens energy and shipping

Posted on 17 June 2015 by VRS  |  Email |Print

A strong El Niño phenomenon this year is expected to increase the number of cyclones and typhoons in the Pacific and Indian oceans, leading to disruptions in energy and shipping markets.
The climatic event tends to dampen hurricane activity in the Atlantic, reducing the risk to US oil markets serviced by refineries in the Gulf of Mexico. However, the hurricane season in the Pacific is likely to affect crude oil and product supply chains, according to commodity brokers Marex Spectron………………………………………..Full Article: Source

Gold Market Drivers Are Changing, Says HSBC

Posted on 17 June 2015 by VRS  |  Email |Print

Drivers of the gold market are changing, says HSBC. During the rally up to 2012, investment demand set the tone, but now demand from emerging markets is increasing its influence. Jewelry demand in Asia, particularly in India, remains robust even as investors sell out of their positions.
“These [emerging market] buyers and sellers hunt for bargains, and are hugely price sensitive. They now largely define the range for gold,” says HSBC. Furthermore, central banks in emerging markets are likely to increase their gold purchases by 25% this year, the bank says. Spot gold is trading down 0.2% at $1,183.26/oz………………………………………..Full Article: Source

How Important Is Brazil To The World’s Oil Market?

Posted on 16 June 2015 by VRS  |  Email |Print

Two things put Brazil’s oil wealth in the public eye again this year. One good. One not so good. First the not so good: Petrobras. The state-owned oil firm is up to its eyeballs in scandal. It’s led to the bankruptcy of around four Petrobras partner firms, and the arrest of dozens of executives, including high level Petrobras managers implicated in money laundering and accounting fraud.
So that’s the bad side of Brazil’s oil business. Then the good side. That was brought to light recently when Shell Oil bought out the BG Group, a U.K. driller that partners with Petrobras on four wells in the Atlantic Ocean. Shell’s CEO Ben van Beurden said that one of the most attractive aspects of the BG deal was Petrobras………………………………………..Full Article: Source

A Funny Thing Happened on the Way to an Oil Market Rebalance

Posted on 16 June 2015 by VRS  |  Email |Print

As oil prices collapsed last fall and winter, conventional wisdom in the market held that the global glut of crude would stop growing in the second half of 2015 and then shrink as demand picked up, bringing the market back into balance.
Mid-year is now just two weeks away, but the expected re-balance is nowhere in sight. Two data points tell the story: The Organization of the Petroleum Exporting Countries is continuing to produce well above its quota, and U.S. output is still rising even as the industry slashes infrastructure tied to production………………………………………..Full Article: Source

Saudi market opening can end ‘oil only’ story, says T Rowe star

Posted on 16 June 2015 by VRS  |  Email |Print

The opening of the Saudi Arabian market can help the country further push away from the international belief it is only a play on its oil-rich image, T Rowe Price’s Oliver Bell has said. Citywire A-rated Bell made the comments in an investor update for the T Rowe Price Africa & Middle East fund.
His comments coincide with the Saudi market announcing on June 15 it had formally opened its stock exchange to foreign traders for the first time. Bell said, while many investors will set their sights on accessing the country’s world famous oil and gas sector, the reality means the prime investment areas lie elsewhere and the Saudi government is aware of this………………………………………..Full Article: Source

Platinum Prices Hit Six-Year Low

Posted on 16 June 2015 by VRS  |  Email |Print

Platinum prices fell to a six-year low on Monday on concerns over growing supplies of the precious metal. Platinum for July delivery, the most actively traded contract, closed down 0.8% at $1,088.60 a troy ounce on the Comex division of the New York Mercantile Exchange, the lowest settlement since March 18, 2009.
Investors are worried about platinum stockpiles, which are growing as miners in South Africa ramp up output following a five-month strike in 2014. South Africa is the world’s largest producer of the metal, and Barclays estimated platinum production from the country is on track to hit a five-year high in 2016………………………………………..Full Article: Source

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