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Commodities Briefing - Category | Market Moves more

Commodities rout brings global winners and losers

Posted on 03 August 2015 by VRS  |  Email |Print

The sell-off in commodities is terrible news for emerging market countries which depend on high resource prices. What happened to the summer lull? No sooner did it look like things were calming down in Greece and China than something new came along to rattle markets. The wild ride for commodities will ruin a few holidays this year but others won’t be surprised by the latest gyrations.
Cheaper natural resources are a two-edged sword and many investors will welcome the past month’s commodity crunch because it creates winners as well as losers. The commodity slump is important because, unlike the Greek debt negotiations and Shanghai’s bursting equity bubble, its impact is felt throughout the global economy………………………………………..Full Article: Source

Commodity prices fall hits capital expenditure

Posted on 03 August 2015 by VRS  |  Email |Print

A fall in commodity prices is shrinking global corporate spending, with capital expenditure predicted to fall this year and next, research to be published on Monday shows. The energy, chemicals and mining sector accounted for well over a third of global capital expenditure last year but rating agency Standard & Poor’s predicts that spending will fall more than 10 per cent this year and decline further in 2016.
Concerns over weaker Chinese growth and rising commodity supply has led to a sell-off in oil and a broader decline in copper, gold and other raw materials, pushing the Bloomberg commodities index to a six-year low………………………………………..Full Article: Source

Where to trade in commodities complex?

Posted on 03 August 2015 by VRS  |  Email |Print

In the backdrop of expectations of rising rates in the United States, precious metals have been on the backfoot, and so also is crude oil, which has been facing a supply overhang amid weak demand. However, experts feel that there still exist trading opportunities for traders and investors.
“We need to note that the word commodities’ goes beyond gold, silver and oil. There are industrial metals like copper, aluminium, zinc, lead, time and nickel and the entire gamut of agricultural commodities viz., soybean, corn, sugar, wheat, coffee, cocoa, etc that has much better potential,” Pradeep Unni, senior relationship manager, Richcomm Global Services told Gulf News. Even though there could be limited investment opportunities, but there could be good trading opportunities given the expectations of massive volatility………………………………………..Full Article: Source

Iran sees oil output up 1 mln bpd after curbs end

Posted on 03 August 2015 by VRS  |  Email |Print

Iran expects to raise oil output by 500,000 barrels per day (bpd) as soon as sanctions are lifted and by a million bpd within months, Oil Minister Bijan Zanganeh said in remarks broadcast on Sunday. “We are already doing marketing, and within a day after the lifting of sanctions we will raise (production) by 500,000 barrels per day,” Zanganeh said.
He said Iran’s crude production had fallen about one million bpd from about four million bpd under the sanctions, state television reported. “Within the next few months, we will return to the level of 3.8-3.9 million barrels,” Zanganeh added………………………………………..Full Article: Source

Iran warns Opec it plans to recapture market share

Posted on 03 August 2015 by VRS  |  Email |Print

Iran’s oil minister warned fellow Opec members that it aims to recapture market share and plans to step up oil output by 1 million barrels per day “within months” of sanctions being lifted, Iran state news organisations reported.
The Iranian oil minister Bijan Zanganeh was repeating the bullish output assessment he has been making for months. In June, for example, he said that Iran could increase production by 1 million bpd within seven months of sanctions being lifted, bringing it back to its 2011 pre-sanctions level of 3.7 million bpd………………………………………..Full Article: Source

OPEC says oil should not fall further, sees stability in 2016

Posted on 31 July 2015 by VRS  |  Email |Print

OPEC expects increasing oil demand to prevent a further fall in prices and sees a more balanced market in 2016, its secretary-general said on Thursday, the latest sign the group is sticking to its policy of defending market share.
Oil has dropped about 15 percent this month and halved in value in the past year but neither OPEC nor Russia, the world’s top producer, have cut output to support prices, hoping cheaper oil will hit U.S. shale and other rival sources. “I would not expect they (prices) are going to fall because demand is growing,” OPEC Secretary-General Abdullah al-Badri told reporters in Moscow. OPEC pumps around 40 percent of global oil production………………………………………..Full Article: Source

OPEC, Russia: ‘Oil market to stabilize’

Posted on 31 July 2015 by VRS  |  Email |Print

OPEC and Russia expressed confidence the global oil market would become more balanced and stable in 2016 after recent sharp drops. At a meeting between OPEC Secretary-General Abdullah El-Badri and Russian Energy Minister Alexander Novak in Moscow on Thursday, both sides made clear they didn’t expect oil prices to experience any more sharp falls.
While Badri and Novak insisted talks on possible cuts in oil output were not on the agenda, the OPEC representative reiterated the stance communicated at the cartel’s meeting earlier this year. “We met in December, and we met in June; and we decided to keep out production at 30 million barrels a day. And we’re not ready to reduce our production,” Badri said after the talks in Moscow………………………………………..Full Article: Source

Don’t confuse commodities hoarding as a sign of a market turnaround

Posted on 30 July 2015 by VRS  |  Email |Print

Canadian investors did pretty well during the rising tide of commodities prices a decade ago, but they are looking for signs of hope these days. With the S&P/TSX energy index down 20 per cent on the year, and the metals and mining index down by nearly a quarter, they could certainly use one or two.
Maybe investors can simply put their faith in the old adage that the cure for low prices is low prices. What’s supposed to happen is that low prices will discourage production and encourage consumption. That will raise prices, eventually. Then demand will inevitably wane in response and producers will overdo production, as they always do. Prices will decline again. It’s the cycle. Rinse and repeat………………………………………..Full Article: Source

Get ready to cash in on the bottom for commodities

Posted on 30 July 2015 by VRS  |  Email |Print

A five-day rout was put to rest yesterday, with a 1% gain for the S&P 500 and other indexes. Dead-cat bounce? The Federal Reserve may chart out the fortunes for this market, depending on what’s in its statement later. Investors will comb through the Fed’s words for clues to a September hike, though they may get fewer hints than they’re hoping for.
But they may stay away from Internet stocks, after Twitter’s earnings call got messy and Yelp disappointed. Can Facebook rally the sector with results later? The pressure is on, as those shares have run up 15% in the last three months. At least the social-media group now has a what-not-to-say-at-your-conference-call blueprint to work off. Here’s what to expect from Facebook………………………………………..Full Article: Source

Demand not enough to boost oil price

Posted on 30 July 2015 by VRS  |  Email |Print

Strong global demand for oil is insufficient to offset a robust supply outlook that has driven prices back below US$50 per barrel, and Saudi Arabia no longer appears to have the necessary market clout to change prices.
“This remains a supply-driven market,” said Michael Tran, a New York-based commodity strategist at RBC Capital Markets. “Supply drove us into this low price environment and supply will have to be what ultimately digs us out.” Tran thinks oil could retest the lows from earlier in 2015, but he thinks WTI prices will ultimately average somewhere in the low US$50s for the remainder of the year………………………………………..Full Article: Source

Russia has no plans to discuss oil output cuts with OPEC in Moscow

Posted on 30 July 2015 by VRS  |  Email |Print

Russia has no plans to discuss oil production cuts with OPEC during Secretary-General, Abdullah al-Badri, visit to Moscow on Thursday, Energy Minister Alexander Novak was quoted as saying.
Novak added that he saw no ‘abnormality’ on the oil markets, calling the oil price of between $50 to $65 per barrel as ‘expected’. OPEC decided to keep oil production unchanged, starting the battle to defend its market share. Russia, the world’s biggest oil producer, also refused to take any actions to support oil prices which more than halved since last year………………………………………..Full Article: Source

Understanding the Oil Market’s New Supply Dynamic (Video)

Posted on 30 July 2015 by VRS  |  Email |Print

Bloomberg’s Vincent Piazza explains the new supply dynamic in the oil market as producers continue increasing output while prices fall. He speaks on “Bloomberg Surveillance.”.………………………………………Full Article: Source

Zinc market could be facing concentrate supply deficit: Investec

Posted on 30 July 2015 by VRS  |  Email |Print

The zinc market could run into a concentrate shortfall in the coming months, leading to upward pressure on prices, Investec said Wednesday. “We see the zinc market as one of the few bright spots in the metals market right now given the natural attrition from old mines closing down,” Investec said in a research note, commenting on the decision by Australia’s MMG to push ahead with its Dugald River mine project.
“The development of Dugald River has long been expected but a considerable deficit of concentrate could yet emerge in the market in the next few months — a situation that in our view could lead to a squeeze on the zinc price,” Investec said. On Tuesday, MMG announced approval of an updated development plan for the Dugald River project in Queensland, Australia………………………………………..Full Article: Source

Despite bumpy June/July, CTAs hold on

Posted on 30 July 2015 by VRS  |  Email |Print

To say that things have been rocky in managed futures recently is putting it mildly. In June, the industry saw its worst month on a performance basis in the past four years. Then yesterday, S&P’s Jodie Gunzberg came out with the following data: “The S&P GSCI has lost 13.6% month-to-date through July 27, 2015, bringing its level to the lowest since February 25, 2002. It has now exceeded the bottom of the 2008 global financial crisis.”
That makes July the seventh worst performing month for the GSCI since 1970. In fact, it’s pretty bad across the board - again Gunzberg: “Every single one of the 24 commodities is negative for the month except lean hogs, which is just barely positive by 18 basis points BUT only when taking into account the positive roll yield; otherwise that is negative too, by 14.5%………………………………………..Full Article: Source

China paves a silk road for commodities

Posted on 29 July 2015 by VRS  |  Email |Print

The Silk Road may conjure up images of Marco Polo and ancient Chinese empires, but its infrastructure-driven 21st century version could be a long-term saviour for commodity prices. China’s plan to spend billions on transportation links to Europe via western Asia - primarily railways and highways but also ports - is finally underway and starting to attract international attention.
“The Silk Road initiative announced by Chinese President Xi Jinping in 2013 and implemented, beginning this year, contemplates so vast an investment in highways, ports and railways that it will transform the ancient Silk Road into a ribbon of gold for the surrounding countries,” said Yale Professor Valerie Hansen, writing in The Indian Express earlier this month………………………………………..Full Article: Source

Oil market is in the dreaded ‘double dip’ so brace for more losses to come, warns Bank of America

Posted on 29 July 2015 by VRS  |  Email |Print

Oil prices are experiencing a “double dip” and could extend losses as the supply glut persists for another 18 months, according to Bank of America Corp. Risks to growth in China, the prospect of increased Iranian exports after this month’s nuclear deal and a strengthening dollar “could continue to press oil lower,” the bank said in a note dated July 24. Bank of America cut its third-quarter estimate for Brent to US$50 a barrel from US$54, while West Texas Intermediate was lowered to US$45 from US$50.
Brent and WTI returned to bear markets in the past week after falling 20 per cent from peaks reached in June, as a plunge in China’s stock market sparked concern that oil demand in the world’s second-largest economy will falter. Brent traded close to US$53 a barrel on Tuesday and WTI near US$47………………………………………..Full Article: Source

Gold continues to shine in India, loses sheen in world

Posted on 29 July 2015 by VRS  |  Email |Print

World gold demand hit a six-year low in the April-June quarter of the current calendar year on weak demand from China. A survey conducted by global research firm Thomson Reuters GFMS showed that the world gold demand nose-dived 14 per cent during April-June 2015 at 858 tonnes compared with 1,000 tonnes in the corresponding quarter last year.
Gold demand in the April-June 2015 quarter showed a decline of 15 per cent from the previous quarter. Jewellery consumption in India rose 2.5 per cent year-on-year (y-o-y) to 158 tonnes. Retail investment was steady y-o-y at 50 tonnes. However, it surged from the first quarter on buying related to Akshaya Tritiya………………………………………..Full Article: Source

Oil Bulls Flee at Fastest Pace in Three Years as Glut Expands

Posted on 27 July 2015 by VRS  |  Email |Print

Speculators’ conviction that oil will rally weakened at the fastest pace in three years, just before futures tumbled into a bear market. The net-long position in West Texas Intermediate contracted 28 percent in the seven days ended July 21, U.S. Commodity Futures Trading Commission data show. Long positions dropped to a two-year low while short holdings climbed 25 percent.
Oil traded in New York fell more than 20 percent from its June high, meeting the common definition of a bear market. U.S. output has held near a four-decade high while the largest OPEC members pump at record rates, keeping the market oversupplied. The drop was part of a broader retreat in commodity prices to a 13-year low, driven by concern that slower economic growth in China and a stronger dollar will hurt demand………………………………………..Full Article: Source

Oil groups have shelved $200bn in new projects as low prices bite

Posted on 27 July 2015 by VRS  |  Email |Print

The world’s big energy groups have shelved $200bn of spending on new projects in an urgent round of cost-cutting aimed at protecting investors’ dividends as the oil price slumps for a second time this year.
The sell-off in oil has been matched by a broader slump in copper, gold and other raw materials, pushing the Bloomberg commodities index to a six-year low over concerns of weaker Chinese growth and rising supplies across the board………………………………………..Full Article: Source

Gold Slump Not Over as Speculators Go Net-Short for First Time

Posted on 27 July 2015 by VRS  |  Email |Print

The slump in gold that took prices to a five-year low may have further to run after hedge funds swung into a net-short position for the first time. The shift in New York futures and options came as speculators increased their bearish wagers to the highest since the U.S. government data begins in 2006. Long holdings declined for a fourth week.
Gold fell to the lowest since 2010 last week, and futures in New York are poised for the biggest monthly loss in two years. Prices are plunging amid mounting speculation that U.S. interest rates will climb this year, curbing the appeal of bullion because it doesn’t pay interest like competing assets. At the same time, China bought less of the metal than analysts were expecting, and the dollar is strengthening………………………………………..Full Article: Source

Moody’s Says Low Oil Price Here to Stay as Russia Bleeds Capital

Posted on 24 July 2015 by VRS  |  Email |Print

Low oil prices are just the tip of what ails Russia, according to Moody’s Investors Service. With its dependence on commodities and a slump in investment, Russia will have a hard time recovering from its record economic slump as global oil prices are bound to remain lower for a long time, Yves Lemay, managing director in the sovereign risk group at Moody’s in London, said in an interview on Wednesday.
As much as a quarter of Russia’s gross domestic product and two-thirds of its exports are linked to the energy industry, according to the rating company. “Our assessment is that low oil prices are here to stay,” Lemay said. “Without major investment in the infrastructure, modernizing the equipment, oil production in Russia is unlikely to rise and may slowly decline in the coming years.”……………………………………….Full Article: Source

Oil Returns to Bear Market as U.S., OPEC Output Prolongs Glut

Posted on 24 July 2015 by VRS  |  Email |Print

West Texas Intermediate futures dropped 1.5 percent Thursday to close at $48.45 a barrel. The grade has lost 21 percent in the past six weeks, meeting the common definition of a bear market. The slide in prices has cut the value of the crude futures market in half since 2013, exchange data shows.
Oil’s recovery has sputtered as U.S. oil production withstands lower prices, while OPEC members such as Saudi Arabia and Iraq push output to record levels in a bid to defend their market share. Prices were swept up in a broader selloff in raw materials, which have fallen to a 13-year low as the dollar strengthens and concerns grow over economic growth in China………………………………………..Full Article: Source

With Base Metals Leading Commodities Down, Prepare for More Market Volatility

Posted on 24 July 2015 by VRS  |  Email |Print

Commodities have been in a falling market since 2011, but, so far, this year has been more of a flat market for commodities. We expect to see some movement soon. The rising US dollar has been a key factor in driving commodities down and although the dollar still strong, it has been taking a break for the past seven months from its meteoric rise while posting a flatter trajectory.
Both, the dollar index (in green) and commodity Index (in blue) are within their one-year range. For the last couple of months, however, commodities are starting to fall again, approaching record lows while the dollar is rising again………………………………………..Full Article: Source

All commodity price indices to decline in 2015 – World Bank

Posted on 23 July 2015 by VRS  |  Email |Print

A new World Bank report forecasts that all main commodity price indices will decline in 2015, owing to “abundant supplies and, in the case of industrial commodities, weak demand”. The July Commodity Markets Outlook is particularly pessimistic on the outlook for metals prices, which are now projected to decline 17%, instead of the 12% forecast in April; a result of capacity increases and slowing Chinese demand.
The largest decline is expected for iron-ore, where a 46% slump is anticipated, owing to new low-cost mining capacity coming online, mainly in Australia. BHP Billiton reported a 13% increase in iron-ore production to a record 254-million tons for the year to June 30, while South Africa’s leading iron-ore producer Kumba Iron Ore has indicted that it is targeting a break-even cash iron-ore price of $45/t, with prices having fallen to around $50/t………………………………………..Full Article: Source

U.S. Winning Oil War Against Saudi Arabia

Posted on 23 July 2015 by VRS  |  Email |Print

Last year the Organization of the Petroleum Exporting Countries (OPEC), led by Saudi Arabia, initiated an economic oil war against the United States when it refused to cut production in November of 2014 like it usually does when oil prices drop. This was an attempt to drive some U.S. shale oil producers bankrupt and stem the flow of North American shale oil onto the global market.
In fact, OPEC actually increased oil production in November, which drove oil prices down to nearly $50/bbl, the price at which many shale producers can’t even break-even. But it hasn’t quite worked out the way they wanted………………………………………..Full Article: Source

Commodity selloff: What it means for Fed rate hike

Posted on 22 July 2015 by VRS  |  Email |Print

A broad selloff in commodities and dollar strength point to disinflationary pressures on the horizon that weaken the argument for a near-term rise in U.S. interest rates, according to some analysts. This week has seen gold prices tumble to five-year lows and U.S. oil prices dip below $50 a barrel for the first time since April, with prices stabilizing a little on Tuesday.
“Given that weak commodity prices are likely to prompt a ripple out disinflationary effect it is hard to see how the Fed (U.S. Federal Reserve) would even consider hiking rates against such a weak backdrop, something markets don’t appear to be considering at the moment,” Michael Hewson, chief market analyst at CMC Markets UK, said in a note on Tuesday………………………………………..Full Article: Source

Gold Falls to Five-Year Low as Traders Continue to Exit

Posted on 22 July 2015 by VRS  |  Email |Print

Gold prices lurched lower on Tuesday, extending the losing streak to nine consecutive trading days, as investors continued to stream out of the market amid expectations of higher interest rates in the U.S.
The most actively traded contract, for August delivery, fell $3.30, or 0.3%, to settle at $1,103.50 a troy ounce on the Comex division of the New York Mercantile Exchange. This was the lowest settlement since March 25, 2010, when prices closed at $1,102.90 an ounce………………………………………..Full Article: Source

Commodities are crashing to 13-year lows as investors dump gold ahead of Fed rate hike

Posted on 21 July 2015 by VRS  |  Email |Print

The rout in commodities deepened with prices heading for the lowest close since 2002 as the prospect of higher U.S. interest rates sent gold tumbling. Raw materials are losing favour with investors as the dollar gains amid signals from Federal Reserve Chair Janet Yellen that the central bank may raise rates this year on the back of an improving U.S. economy.
Higher borrowing costs curb the attractiveness of commodities such as gold, which doesn’t pay interest or give returns like assets including bonds and equities. The Bloomberg Commodity Index dropped as much as 1.1 per cent, falling for a fifth day in the longest stretch of declines since March………………………………………..Full Article: Source

Oil rebound? These banks think so

Posted on 21 July 2015 by VRS  |  Email |Print

Oil prices have faced something of a perfect storm over recent week, with the Greece crisis, high Saudi production and an Iran nuclear deal all weighing on the commodity. But despite its recent losing streak – which has seen Brent prices fall close to 10 percent over the past 30 days – a number of banks think oil prices are about to pick up.
Brent was trading around $56 per barrel on Monday morning, while West Texas Intermediate (WTI) was around $50. Although this is well off lows of around $45 and $42 hit earlier this year, it is still around 50 percent lower than in June last year………………………………………..Full Article: Source

Oil: Some crude numbers

Posted on 21 July 2015 by VRS  |  Email |Print

Having stabilised during the spring, crude oil is experiencing a summer swoon. The Brent oil benchmark has dropped to the mid-$50s a barrel after averaging about $65/bbl during Q2, while West Texas Intermediate is barely holding $50/bbl, about $10/bbl below its average in the second quarter.
And this sell-off has hit not just the flat price but is extending further out the curve: December 2018 Brent, for example, has dropped below $70/bbl, which is lower than it ever fell during the worst of last year’s crude collapse. The concerns that have driven prices lower are easy to find, but beyond the headlines they are hard to take too seriously. Take demand first………………………………………..Full Article: Source

Gold Leads Commodities ‘Mess’ That Has Many Investors Smarting

Posted on 21 July 2015 by VRS  |  Email |Print

Pity the commodity investor. The Bloomberg Commodities Index dropped to a 13-year low Monday, weaker than after the banking meltdown of 2008 and the euro-zone crisis of 2012. From oil to copper to sugar, little has escaped the rout in the year’s worst-performing asset class.
“Commodities are a mess,” said Walter “Bucky” Hellwig, who helps manage $17 billion at BB&T Wealth Management in Birmingham, Alabama, in a telephone interview. “We are not looking to add to positions.” Gold, the most heavily-weighted commodity in the index, is the latest to get hit hard, socked by a stronger dollar and concern about a slowdown in China………………………………………..Full Article: Source

Earnings should grab attention, but watch commodities

Posted on 20 July 2015 by VRS  |  Email |Print

About a quarter of S&P 500 companies report earnings in the coming week, and that could be a positive catalyst for stocks as worries about Greece and China drift into the background. So far, just several dozen companies have reported, and the usual 70 percent-plus beat on the top-line, while just about half beat on revenue. Among the names reporting next week are Apple, IBM, American Express, General Motors, Boeing, Coca-Cola and Amazon.com.
“The reaction to earnings has been relatively good,” said Paul Hickey, co-founder of Bespoke. “Coming into this earnings reporting period, analysts’ sentiment was negative. We were getting more downward revisions than upward revisions, and typically when you see that coming into a reporting period, the market performance is much better than when you see analysts upping their estimates.”……………………………………….Full Article: Source

Cheap Oil Should Fuel Economy at Last

Posted on 20 July 2015 by VRS  |  Email |Print

The drop in oil prices was supposed to help the economy, but so far has hurt it instead. Now the benefits should start rolling in. Lower oil prices have proven to be more of a bane than a boon for the U.S. economy. But that is about to change.
When the price of crude started dropping sharply last fall, most economists reckoned it would be a good thing. Sure, U.S. oil production had boomed due to the shale revolution, but the country was (and is) still a net importer of petroleum products. So, the thinking went, the losses from lower investment and lost jobs in the shale basins would be more than offset by the extra money that got spent on American goods and services rather than foreign oil………………………………………..Full Article: Source

Opec unwilling to flood finely balanced oil market

Posted on 20 July 2015 by VRS  |  Email |Print

Ample supply and the nuclear deal with Iran have pushed the price of West Texas Intermediate down about US$9 per barrel to just more than $50 since the beginning of this month. But the $30 per barrel levels predicted by some New York analysts are very unlikely to be seen.
The oil sanctions on Iran will not be lifted until the end of the year, only after the International Atomic Energy Agency issues a report in mid-December on Iranian compliance with the agreement reached last week in Vienna. That means it will be 2016 before any of the 0.5 million barrels per day (mbpd) of spare capacity promised by Iranian oil minister Bijan Zanganeh can be added to Opec supply………………………………………..Full Article: Source

Commodities supercycle unlikely to ever be repeated again

Posted on 17 July 2015 by VRS  |  Email |Print

The SLI multi-asset team believe the commodities supercycle of the 2000s is unlikely to ever be repeated again as India will not match up to demand once seen from China. Chris Faulkner McDonagh, market strategist, and Neil Richardson and David Bint, both multi-asset investment directors, said China was fuelling the previous super-cycle thanks to its booming infrastructure industry.
Now Chinese demand is slowing down, there is unlikely to be another region that can take its place. Richardson said: “There won’t be another commodities supercycle. The reason for the previous one was that China came onto the world stage and the industry was ill-equipped to cope with the demand shock so had to build new mines very quickly………………………………………..Full Article: Source

Iran Faces Battle to Win Back Asia Oil Market Share

Posted on 17 July 2015 by VRS  |  Email |Print

Iran may be hoping to claim back its share of Asia’s oil market now that the nuclear accord signed this week cleared the way to ramp up exports. But the competition is already getting tougher across the region.
Take India. The country has long been a key market for Iran’s National Iranian Oil Co., or NIOC. But last week, one of NIOC’s biggest customers, Essar Oil signed a 10-year crude purchase agreement with Russia’s largest oil exporter Rosneft, which will also take a 49% stake in the Indian refiner………………………………………..Full Article: Source

Commodities: Off the Boil

Posted on 16 July 2015 by VRS  |  Email |Print

The recent commodity price ‘rally’ as some have described it has come to a halt. Further significant price gains in the near-term are unlikely. However, H2 2015 may provide some support for fundamentals. Nevertheless, returns will remain meagre and warning signs emanating from the macro environment (Grexit etc.) allude to the short-term nature of commodity investment flows.
Net inflows to commodities of almost $7bn in Q1 2015, followed by a month (April) when commodities outperformed most other asset classes (registering double-digit returns as oil prices rose 20%) gave promise to markets. But no sooner had the commodity bulls returned than the spectre of continued sluggish growth and amply supply came back to dent sentiment. Lets face it, the majority of commodities remain in good supply and so the run-up in prices Q1 proved short-lived………………………………………..Full Article: Source

Iran oil boost on hold to 2016 as nuclear inspectors go to work

Posted on 16 July 2015 by VRS  |  Email |Print

Global oil markets won’t feel the real impact of Iran’s historic deal with world powers until 2016 as sanctions remain in place while nuclear inspectors go to work, said banks including Citigroup Inc., UBS Group AG and Commerzbank AG.
OPEC’s fourth-largest member won’t achieve a crude-export boost of more than 500,000 barrels a day, or about 50 percent, until next year as Iran’s compliance with curbs on its nuclear program is verified, the banks say. The nation will probably choose to gradually increase exports once sanctions are lifted, rather than risk lower prices by rapidly pushing crude into an oversupplied market, according to the International Energy Agency………………………………………..Full Article: Source

Look, Don’t Freak Out About Iranian Oil Flooding the Market

Posted on 16 July 2015 by VRS  |  Email |Print

Iranian oil will soon hit the global market, thanks to sanctions being lifted as part of the historic deal reached yesterday to regulate the country’s nuclear program. Some are suggesting that this will flood global markets with oil at a time when prices are already incredibly low (thanks, in part, to high production from the US and Saudi Arabia).
So, should you go out and buy a gas-guzzler and scrap your plans to save up for an electric car?Uh, no. To the extent that an increase in Iranian oil production will have an effect on the global price of gas, it will be slight and delayed.“Most of what is assumed can be delivered [from Iran] has already been priced into the market,” says Sarah Ladislaw, director of the Energy and National Security Program at the Center for Strategic & International Studies………………………………………..Full Article: Source

Rare earth protest fuels shadow lending fears

Posted on 16 July 2015 by VRS  |  Email |Print

Hundreds of frustrated Chinese investors protested this week outside a rare earth metals exchange in the south after it was unable to return their money, highlighting the risk of shadow lending in the country.
Investors said the Fanya Metal Exchange gradually refused to pay out on investment products — that had promised annual returns of 10 per cent or more — following a collapse in the price of rare metals, which were used as collateral against the customers’ funds………………………………………..Full Article: Source

Carl Icahn calls BlackRock a ‘dangerous’ company, cites ETF concerns

Posted on 16 July 2015 by VRS  |  Email |Print

Billionaire activist investor Carl Icahn on Wednesday lambasted BlackRock Inc, the world’s largest asset manager, as an “extremely dangerous company” because of the prevalence of its exchange-traded fund products, which Icahn deems illiquid.
“They sell liquidity,” Icahn said in reference to BlackRock’s ETF business. “There is no liquidity. That’s my point. And that’s what’s going to blow this up.” Icahn was speaking at the CNBC Institutional Investor Delivering Alpha Conference in New York, sharing the stage with Larry Fink, chief executive of BlackRock. Icahn said he was concerned about the amount of money invested in high-yield ETFs, which he called “overpriced.”……………………………………….Full Article: Source

What Iran’s Nuclear Deal Means for the Global Crude Oil Market

Posted on 15 July 2015 by VRS  |  Email |Print

The nuclear accord reached in Vienna on Tuesday could eventually reshape global oil markets. After almost two years of talks, the holder of the world’s fourth-biggest crude reserves will benefit from an easing of international sanctions on exports in return for curbs on its nuclear program.
How Much More Oil Can Iran Produce? Iranian Oil Minister Bijan Namdar Zanganeh says the country can increase exports by 500,000 barrels a day as soon as sanctions are lifted, then an additional 500,000 a day in the following six months. Iran produced an average of 2.8 million barrels a day this year………………………………………..Full Article: Source

Iran to return to oil market with maximum capacity

Posted on 15 July 2015 by VRS  |  Email |Print

Iran will return to the global oil market with maximum capacity once the sanctions against the country are lifted following Iran’s nuclear deal with world powers, a deputy oil minister was quoted as saying on Tuesday.
Iran and six major world powers reached a landmark nuclear deal on Tuesday, capping more than a decade of negotiations. Oil prices tumbled more than $1 on the news as the deal would see an easing of sanctions against Tehran and a gradual increase in its oil exports………………………………………..Full Article: Source

Iran’s return to oil market to weigh on crude prices

Posted on 15 July 2015 by VRS  |  Email |Print

After more than 10 years of diplomatic wrangling, the global oil and gas industry is ready to welcome Iran back to the market. The nuclear deal announced on Tuesday will eventually reopen Iran’s huge oil and gas reserves to the western companies, and bring Tehran closer to achieving its goals of rebuilding its economy, emerging from isolation and restoring crucial production and exports of its natural resources.
Iran has the world’s fourth-largest proven crude oil and the second-biggest natural gas reserves. Expectations of an agreement have already pulled oil prices lower, with ICE August Brent — the international benchmark — falling more than 10 per cent since the start of the month and trading below $57 a barrel on Tuesday………………………………………..Full Article: Source

OPEC Members Disagree Over Prospect of New Oil Supplies From Iran

Posted on 15 July 2015 by VRS  |  Email |Print

The nuclear agreement between Iran and six world powers has caused disagreement among Organization of the Petroleum Exporting Countries officials over how to react to new supplies of oil coming onto the export market.
As oil prices dropped Tuesday after the deal was announced, Algeria’s oil minister Salah Khabri said he may call for an emergency OPEC meeting to address the situation. In addition to the Iran development, the oil market has been affected by the Greek debt crisis and the Chinese stock market’s recent dive………………………………………..Full Article: Source

Slowing China, Supply Gluts Limit Upside for Commodities in Q3

Posted on 14 July 2015 by VRS  |  Email |Print

A slowdown in China, a strong dollar and high inventories will limit the upside for commodity price performance in coming months, although leading fund managers still see pockets of value in areas such as refined oil products. The bearish cocktail could choke off resurgent investor interest in commodities.
Net inflows topped $7.8 billion in the first half of the year, Barclays data showed, the highest in four years. Commodity price performance has also been relatively strong, with the S&P GSCI, a well-followed commodity index, up almost 9 per cent in the second quarter………………………………………..Full Article: Source

Bull market for soft commodities

Posted on 14 July 2015 by VRS  |  Email |Print

Metal and energy commodities may be in a bear market, but investor sentiment towards soft commodities is turning bullish indeed. Corn, soy, wheat, oilseed and cattle prices have all spiked, with only the price of milk powder dampening sentiment.
“The past month has seen a huge reversal of investor sentiment towards agricultural commodities,” said Capital Economics commodities economist Hamish Smith. “Surging grain and oilseed prices on account of poor growing conditions in the US and Europe in particular, have been the catalyst.”……………………………………….Full Article: Source

OPEC ups demand forecast, sees ‘balanced’ market

Posted on 14 July 2015 by VRS  |  Email |Print

The oil market should be more balanced next year as China and the developing world use more oil while supply of fuel from North American shale grows more slowly, OPEC said on Monday. In its monthly report, the 12-member Organization of the Petroleum Exporting Countries said it expected world oil demand to increase by 1.34 million barrels per day (bpd) in 2016, up from growth of 1.28 million bpd this year.
World oil demand growth should outpace any increase in oil supply from non-OPEC sources and ultra-light oils such as condensate, increasing consumption of OPEC crude, it said. “This would imply an improvement toward a more balanced market,” OPEC’s in-house economists said in the report………………………………………..Full Article: Source

Gold price: Hedge funds slash bullish bets 64%

Posted on 14 July 2015 by VRS  |  Email |Print

On Monday, gold went nowhere in New York with August deliveries priced at $1,155.30 an ounce in quiet afternoon trade, down a couple of dollars rom Friday’s close. Gold is down nearly 12% from its 2015 highs and the pervading negative sentiment – despite all the factors working in the precious metal’s favour – is nowhere more evident than in the positioning of speculators on the futures market.
Last week large gold futures investors such as hedge funds, referred to as “managed money”, slashed overall bullish positions by a whopping 64%………………………………………..Full Article: Source

China’s faltering economy may hit Indian metals industry

Posted on 14 July 2015 by VRS  |  Email |Print

Adverse economic developments in China, which accounts for 40 per cent consumption of major metals globally, will negatively impact the metals industry in India, says a rating agency. “Adverse economic developments in China may have a directionally negative impact on the Indian metals industry as well as on sectors with an export focus,” India Ratings and Research (Ind-Ra) said in a statement.
Given the soft demand scenario in China, base metals prices declined in the range of 2-21 per cent in the first six months of 2015, said the domestic arm of global credit rating agency Fitch. On an year-to-date basis, Chinese domestic hot roll coiled steel prices have declined by 21 per cent, London Metal Exchange (LME) nickel prices by about 12 per cent, LME copper metal prices by 9 per cent and China alumina prices by about 10 per cent………………………………………..Full Article: Source

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