Tue, May 26, 2015
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Commodities Briefing - Category | Market Moves more

Goldman Sticks to Commodity Bear Call as Copper Vulnerable

Posted on 26 May 2015 by VRS  |  Email |Print

Commodities will reverse a rally that started in March as a stronger U.S. dollar, cheaper oil and cooling China again pressure raw materials, especially copper, according to Goldman Sachs Group Inc. Copper will lose at least 16 percent over the coming 12 months on China’s weakening demand growth and slowdown in construction completions, analysts including Jeffrey Currie said in a report e-mailed Monday.
Oil in New York will fall to $45 a barrel by October while the dollar continues its rise, pushing commodities prices lower as production costs slide. “We see downside pressures on commodity prices re-emerging,” the analysts wrote in the report. “The recent rise in commodity prices is clearly at odds with our lower-for-longer bearish view across the complex.”……………………………………….Full Article: Source

No Reason For OPEC To Relent in Oil Market Tussle

Posted on 26 May 2015 by VRS  |  Email |Print

As the next OPEC summit draws closer, another round of commentary centered on the cartel not “relenting” in the ongoing oil market tussle has flooded media outlets. Such chatter risks regurgitating the obvious.
That OPEC is not going to give ground became quite clear back in November at its last meeting, where the oil producers’ collective decided not to cut the 30 million barrels per day (bpd) production quota it has officially kept in place since December 2011………………………………………..Full Article: Source

OPEC producers to defend market share in face of mounting competition and domestic needs

Posted on 26 May 2015 by VRS  |  Email |Print

Gulf oil producers, led by Saudi Arabia, will resist attempts to cut output at a Organisation of Petroleum Exporting Countries (OPEC) meeting next month as preserving market share remains their top priority, industry analysts said.
A decision by the 12-member OPEC not to cut production in November sent prices crashing 60 per cent before a partial recovery in recent weeks. Gulf and other OPEC members said they wanted to safeguard their share of a market that has faced a supply glut as a result of sharp increases in the production of shale and sand crudes………………………………………..Full Article: Source

OPEC oil supply is expected to rise

Posted on 26 May 2015 by VRS  |  Email |Print

OPEC supply is expected to increase by 0.2-0.3 million barrels per day (bpd) between now and end-3Q2015, analysts of the US JP Morgan bank said in a report, obtained by Trend. OPEC supply growth has slowed from end- 1Q2015 level of 1.4 million bpd year-over-year, analysts said.
At the same time they expect non-OPEC supply to contract by 0.5 million bpd between now and end-3Q2015. Analysts mentioned that Brent futures prices last week stayed in a $64-$68 per barrel range………………………………………..Full Article: Source

Africa’s economy to strengthen in 2015 despite Ebola, oil price

Posted on 26 May 2015 by VRS  |  Email |Print

Africa’s overall economy should advance in 2015, expanding by 4.5 percent, showing resilience despite weak commodity prices and the devastating Ebola epidemic, an annual report published Monday said. And future growth could be spurred by the continent’s population doubling to two billion over the next 35 years, repeating in Africa the economic boom seen in Asia’s biggest countries.
“Africa’s gross domestic product (GDP) growth is expected to strengthen to 4.5 percent in 2015 and 5.0 percent in 2016 after subdued expansion in 2013 (of 3.5 percent) and 2014 (3.9 percent),” said the report, co-authored by the Organisation for Economic Co-operation and Development (OECD), the African Development Bank and the UN Development Programme (UNDP)………………………………………..Full Article: Source

Gold Market Remains Vulnerable To A Stronger U.S. Dollar

Posted on 26 May 2015 by VRS  |  Email |Print

Gold prices ended up Friday, just a few dollars off their weekly low, but managed to hold on to the $1,200 an ounce level as a stronger U.S. dollar and low liquidity in the marketplace created some week-end selling pressure, Friday. Gold ended the week in negative territory, after two consecutive weeks of positive gain. Comex June gold futures ended Friday at $1,204 an ounce, down more than 1.5% from Monday’s opening price.
At the same time the silver market underperformed as Comex July silver futures settled Friday at $17.111, down more than 2.4% for the week. The selloff in the gold market started on Tuesday as a five-day rally lost momentum to a surging U.S. dollar. Looking ahead, the price forecast appears at best mixed. The Kitco weekly gold survey saw a drop in enthusiasm as most Main Street voters are negative on gold prices next week but most analysts are bullish………………………………………..Full Article: Source

Chinese Hedge Funds Bearish on Copper Ring Alarm Bells for Bulls

Posted on 26 May 2015 by VRS  |  Email |Print

Nobody may be more bearish on China copper than Chinese hedge funds. That should be a warning to investors who’ve ridden the metal’s rebound from a five-year low into a bull market. Gains of as much as 20 percent since late January haven’t convinced the money managers that demand is improving in the world’s biggest copper-consuming country, where the economy is growing at the slowest pace in a generation.
“The outlook for China’s demand will be worse, not better,” said Shen Haihua, a senior portfolio manager at Hong Kong-based HFZ Capital Management, a joint venture of U.K. hedge fund Red Kite Management Ltd. and Maike Metals International, a Chinese metals trader. HFZ Capital says demand will weaken in the second half of the year………………………………………..Full Article: Source

3 Safe Investments in Commodities

Posted on 25 May 2015 by VRS  |  Email |Print

Commodity prices can be very volatile and change without notice. In the past year alone the key commodities of oil, natural gas, iron ore, silver, and gold have all dropped by double-digits at some point in the year. Looking out even farther all of these commodities are down by at least a third from the peak price over the past decade.
Huge price drops like these can sink commodity stocks, especially those already weighted down by a lot of debt. However, despite this downward volatility commodity prices can go higher as well, minting a fortune for investors. The key is to be invested in a company that can make it through the low point of the cycle to cash in when prices rebound. Here are three safe commodity investments that are very likely to be there when a future uptick in commodity prices finally arrives………………………………………..Full Article: Source

Why the oil market isn’t worried about world turmoil

Posted on 25 May 2015 by VRS  |  Email |Print

When Islamic State fighters in Iraq captured the town of Ramadi this week, just 80 miles (129 kilometres) from the capital of the Middle East’s second-largest oil producer, crude markets shrugged.
Rather than the spikes that have historically accompanied geopolitical disturbances, oil prices actually fell that day. Elsewhere, Libya is on the verge of becoming a failed state and Saudi Arabia is waging an air war against rebels in neighbouring Yemen. Again, the markets seem blissfully indifferent………………………………………..Full Article: Source

Saudi Arabia rewrites oil game with refining might

Posted on 25 May 2015 by VRS  |  Email |Print

Saudi Arabia’s rapid transition into one of the world’s largest oil refiners has added an extra dimension to the oil exporter’s role as the driver of Opec (Organization of the Petroleum Exporting Countries) policy, say experts.
When it attends Opec’s next meeting in two weeks, it does so with major new state-of-the-art oil refineries that can profit from cheaper crude and reviving world fuel demand - exactly as international oil firms have over the past six months………………………………………..Full Article: Source

Is this the best time to stay invested in gold?

Posted on 25 May 2015 by VRS  |  Email |Print

Gold, which neared the keenly-watched $1,400 (Dh5,138) an ounce in 2014, had been an investor’s darling, but the yellow metal has mostly been curtailed in a range so far in 2015. But analysts are painting a bearish picture on gold over the short to medium term.
On Thursday, international spot gold traded at $1,200 an ounce level, after having traded in range of $1,163-$1,306.2 so far in 2015. Gold moved around $1,200 an ounce as bullish catalysts, such as signs of faster inflation, were offset by speculation the Federal Reserve will soon raise interest rates. While the weaker dollar usually draws buyers to gold, there’s also less demand for haven assets with equities near all-time highs………………………………………..Full Article: Source

Goldman Sachs slashes commodities rating

Posted on 22 May 2015 by VRS  |  Email |Print

Analysts at Goldman Sachs have taken a downbeat stance on the commodities segment, downgrading the sector to underweight on a 12-month basis due to the weak outlook for oil. In a note dated May 20, the analysts said they continue “to believe that oil markets remain oversupplied and that the current price should stimulate supply from low-cost producers and put downside pressure on the oil price.”
The investment bank further cut its rating on credit in the near term to neutral and kept its 12-month underweight call. “[A] near-term risk to a constructive outlook for credit, in particular U.S. [high yield], is a weaker oil price, as credit sentiment has been closely linked to the oil price since last year,” the analysts said in the note………………………………………..Full Article: Source

Merrill Lynch bullish on energy sector as oil price steadies

Posted on 22 May 2015 by VRS  |  Email |Print

Bank of America Merrill Lynch has become more optimistic on the energy sector, on both a small and large cap basis, as oil prices appear to have stabilized in the wake of a sharp drop that sent stock prices spiraling lower in recent months.
In a note to clients on Thursday, small cap strategist Steve DeSanctis said the firm had boosted its rating on small cap energy to “overweight” from “underweight,” a move matched by Merrill’s large cap strategy team, which upgraded energy shares further up the market-cap scale to “overweight.”……………………………………….Full Article: Source

Oil Market Shrugging Off Turmoil in Middle East

Posted on 22 May 2015 by VRS  |  Email |Print

When Islamic State fighters in Iraq captured the town of Ramadi this week, just 80 miles (129 kilometers) from the capital of the Middle East’s second-largest oil producer, crude markets shrugged. Rather than the spikes that have historically accompanied geopolitical disturbances, oil prices actually fell that day.
Elsewhere, Libya is on the verge of becoming a failed state and Saudi Arabia is waging an air war against rebels in neighboring Yemen. Again, the markets seem blissfully indifferent………………………………………..Full Article: Source

OPEC Seen Unyielding in Battle With Shale for Oil-Market Share

Posted on 22 May 2015 by VRS  |  Email |Print

OPEC will stick with the strategy of favoring market share over prices when it meets next month because rival producers are already starting to buckle. All but one of the 34 analysts and traders surveyed by Bloomberg said the Organization of Petroleum Exporting Countries will maintain its daily production target of 30 million barrels when it meets in Vienna on June 5.
Saudi Arabia, the biggest of OPEC’s 12 members, shaped the strategy at the last meeting in November, arguing that the usual response of cutting output to boost prices would not address the threat from shale and other higher-cost suppliers………………………………………..Full Article: Source

Chinese Gold Standard Would Need a Rate 50 Times Bullion Price

Posted on 22 May 2015 by VRS  |  Email |Print

A move to a gold standard in China would require an exchange rate of as much as $64,000 an ounce, 50 times bullion’s price now, according to Bloomberg Intelligence. A traditional gold standard, in which the precious metal backs the currency, is basically impossible at current prices due to the amount of metal needed and there’s no evidence the sixth-biggest bullion holder will adopt one, Bloomberg Intelligence said in reports published Wednesday.
Any attempt probably would involve new technologies and depend on the ratio of what is backed, it said. Chinese policy makers are trying to establish the yuan as a reserve currency, and backing it with gold would help attract foreign capital inflows, the Bloomberg research unit wrote………………………………………..Full Article: Source

Oil market buoyed by product demand

Posted on 21 May 2015 by VRS  |  Email |Print

The oil market is coping with storage capacity limits because demand for products such as petrol has been unexpectedly strong, says a senior executive at the world’s biggest independent oil trader. Demand growth was “back up to 1.4-1.5m barrels a day” because of “strong pockets” in the US, Europe, the Gulf region and Asia, said Chris Bake, executive director at Vitol.
Last year, demand growth was just 700,000 b/d, according to the International Energy Agency, the west’s energy watchdog, and was one of the key factors behind the 50 per cent collapse in crude oil prices between June and January………………………………………..Full Article: Source

Industry sees no appeal in gold monetisation plan, says concerns remain

Posted on 21 May 2015 by VRS  |  Email |Print

A proposal in India to attract thousands of tonnes of gold owned by households into a bank deposit scheme will likely fail in its current form as it does not address some key concerns for banks and consumers.
Support from banks would be crucial for the success of the monetisation plan. Deposit schemes, similar to the one proposed on Tuesday by the Narendra Modi-led government, have previously failed as the incentives offered were not profitable for banks………………………………………..Full Article: Source

China’s GF Securities to expand global commodities biz - chairman

Posted on 21 May 2015 by VRS  |  Email |Print

China’s GF Securities , the parent of GF Financial Markets, plans to expand in the global commodities markets using its London-based unit, the company’s chairman Sun Shuming said on Wednesday.
Sun said the London unit, GF Financial would be used as the Chinese company’s platform for cross-border fixed income, currencies and commodities (FICC). GF Financial, the first Chinese-owned category I member of the London Metal Exchange, was formed after GF Securities’ futures unit acquired Natixis Commodity Markets in 2013………………………………………..Full Article: Source

Oil Prices: Where Next? Here Are the Forecasts

Posted on 20 May 2015 by VRS  |  Email |Print

What’s next for oil prices? After rallying by about 40% since their lows earlier this year, forecasts now by major banks paint a mixed picture but one that increasingly looks like a W-shaped recovery. The average forecast in a MoneyBeat survey of 10 banks is for Brent, the global benchmark, to fall to an average of $63.35 a barrel in the third quarter of this year, down from around $66 on Tuesday.
West Texas Intermediate, the U.S. marker, will average $58.40 a barrel next quarter, down from about $59 a barrel on Tuesday, according to the survey. Looking beyond, the outlook gets murkier. Some, like Bank of America Merrill Lynch, see prices hovering below $60 for the rest of the year while others, like Standard Chartered, project a fast rebound to $90 a barrel by the end of the year………………………………………..Full Article: Source

China steel price slumps to 12-year low

Posted on 20 May 2015 by VRS  |  Email |Print

Chinese prices of steel used mostly to build homes and offices fell to a 12-year low as peak construction season begins to ebb in the world’s biggest consumer. The average spot price of steel reinforcement bar, or rebar, dropped for a 10th day to 2,458 yuan ($396) a metric ton, the lowest level since January 2003, according to data from Beijing Antaike Information Development Co.
Spot rebar is 11 percent lower this year after four straight annual drops as a prolonged slump in China’s property sector has hurt steel demand. Prices have fallen after reaching a two-month high in March ahead of the usual peak-demand period from April to June. New home prices slid in 69 of the 70 cities tracked by the government in April from a year earlier, National Bureau of Statistics said on Monday………………………………………..Full Article: Source

Goldman cuts crude outlook and oil company forecasts

Posted on 19 May 2015 by VRS  |  Email |Print

Goldman Sachs has cut its long-term crude oil price forecasts and recommended investors sell shares in two major oil companies, saying that improved U.S. shale efficiency and higher production from OPEC will more than cover future demand.
The U.S. investment bank’s equities team, in a note published on Saturday, raised its projection for the average Brent crude oil price this year to $58 a barrel from $52 and lifted its outlook for U.S. light crude futures to $52 a barrel from $48. But Goldman, closely followed investors including large pensions and hedge funds, said it expects Brent to fall over time, reaching $55 a barrel by 2020………………………………………..Full Article: Source

Iran deputy oil minister says OPEC unlikely to cut output

Posted on 19 May 2015 by VRS  |  Email |Print

The Organisation of the Petroleum Exporting Countries (OPEC) is unlikely to implement a production cut at its next meeting in June, a senior Iranian official said on Monday. Asked if OPEC would cut output at the upcoming June 5 meeting, Iran’s Deputy Oil Minister Rokneddin Javadi told Reuters: “I don’t think so.”
Iran, along with Venezuela, has repeatedly called for OPEC to cut output to shore up low prices that have eaten into producers’ oil revenues. Javadi’s comments signal an admission that the group was unlikely to agree to a reduction, especially after its current strategy has succeeded in curbing non-OPEC output and allowed OPEC to regain market share………………………………………..Full Article: Source

Oil Falls as Bearish Fundamentals Outweigh Mideast Tensions

Posted on 19 May 2015 by VRS  |  Email |Print

Oil prices edged lower Monday after Saudi Arabia posted its highest level of monthly exports in nearly 10 years and an Iranian official said OPEC would likely decide to keep production steady at its meeting next month.
The two developments added to a bearish backdrop colored by a stronger dollar that discouraged foreign buyers and data from a private forecasting agency that showed U.S. oil inventories fell less than expected last week………………………………………..Full Article: Source

Q1 physical gold sales up 20% in Germany as gold price hits $1,233

Posted on 19 May 2015 by VRS  |  Email |Print

Gold prices began the week at their best for three months and immediately bounced higher again to $1,233 an ounce with silver outperforming with higher percentage gains at $17.74. Meantime, the latest World Gold Council data revealed that the total demand for gold bars and coins was up by 20 per cent in Germany in the first quarter in a rush to get out of the then slumping euro.
The German economy may be the best performing in Europe at the moment but that has been partly down to a devaluing currency, and one sure fire way to protect against devaluation was to buy gold which is priced in US dollars………………………………………..Full Article: Source

The real El Niño risks an upset to commodities markets

Posted on 18 May 2015 by VRS  |  Email |Print

Commodity investors are in a twist about the weather. Warmer ocean temperatures last spring indicated an El Niño event was on the horizon, signaling buys, sells, and hedging positions in securities linked to products impacted by storms and droughts. Everything from sugar prices to coffee futures were retooled.
But the El Niño yawned, only to be officially declared this March. That year-long lag crimped the wide commodities market price swings on which traders profit. Now, as the El Niño is unleashed in earnest, producing weather extremes throughout the globe, investors are too timid to try and guess which way the wind is blowing — literally………………………………………..Full Article: Source

OPEC Claims Victory in Oil Price Battle — But the War Is Far From Over

Posted on 18 May 2015 by VRS  |  Email |Print

The drop in oil prices from over $100 per barrel a year ago to as low as $46 per barrel in early 2015 was driven by a number of factors, but one of the most important was OPEC’s desire to squash the U.S. fracking market. Saudi Arabia, in particular, has seen the rise of fracking in the United States as a threat to its market share, and as prices have fallen the country has actually increased oil production to a record 10.3 million barrels per day in April.
Now that U.S. producers are shutting down drilling rigs, and some U.S. drillers appear to be in financial trouble, certain OPEC leaders are claiming victory. But we need to consider the bigger picture before accepting that the fight over U.S. shale oil is over………………………………………..Full Article: Source

Saudi Arabia continues oil market war

Posted on 15 May 2015 by VRS  |  Email |Print

Saudi Arabia continues to boost oil production in an alleged bid to take away market share from US producers. Saudi Arabia boosted its oil output to 10.31 million barrels per day in April, an increase over the previous month’s total of 10.29 million barrels, according to OPEC’s latest monthly oil report.
Although the increase is small, it was nevertheless significant, as it marked its highest oil production level in more than three decades. Ever since 2014, Saudi Arabia has amplified production by a whopping 700,000 barrels in an attempt to control the international oil market…………………………………..Full Article: Source

What Might be behind Gold Price Jump

Posted on 15 May 2015 by VRS  |  Email |Print

Over the years, I have written occasionally about the connection between the demand for U.S. government debt and quantitative easing. My contention is straightforward. The primary determinant for quantitative easing is not, as we are constantly told, to keep the unemployment rate down, nor is it to stimulate the economy.
(I emphasize the word “primary” as opposed to the word “only”) It is to support the government debt market and keep government in business – not just in the United States but wherever it is employed. So when you see the price of gold suddenly shoot up over $20 in a single day, these days you look in the direction of the debt market and by extension interest rates to see if that is what driving interest in the metal…………………………………..Full Article: Source

Commodity markets wary of false alarm as El Niño blows back

Posted on 14 May 2015 by VRS  |  Email |Print

After a five-year absence, El Niño is back. The last time the weather event emerged in 2009-10, droughts damaged crops in Southeast Asia and Australia sending agricultural commodity prices soaring. First observed in the 19th century by Peruvian fishermen, the recurring weather phenomenon is known to affect Australasia as well South America. Its climatic effects can reach as far as west Africa.
This week’s announcement by the Australian Bureau of Meteorology (BOM) of a “moderate to strong” El Niño emerging this year may lead to farmers and commodity investors adjusting their hedging and positions…………………………………….Full Article: Source

Investors Double Down on Spring Turnaround

Posted on 14 May 2015 by VRS  |  Email |Print

When the dollar’s rally stalled in March, some investors began buying beaten-down assets in a shift many expected to be short-lived. It has been two months, and the strategy remains a winner. Now, many of those traders are increasing their bets, providing an unexpectedly sharp lift for the euro, oil and other investments that were trampled when the U.S. currency surged.
Many traders say the turnabout has been driven in part by signs that a wave of unprecedented economic stimulus in Europe is starting to bear fruit, boosting lending and manufacturing across the region. China, the world’s largest commodity buyer, has launched its own series of programs aimed at steadying its economy…………………………………….Full Article: Source

Fed Bailouts, Goldman Commodities Business Targeted in Bill

Posted on 14 May 2015 by VRS  |  Email |Print

Senators Elizabeth Warren and David Vitter introduced legislation to limit the Federal Reserve’s emergency-lending powers, adding impetus to congressional efforts to rein in the central bank.
The Bailout Prevention Act seeks to ensure that the Fed lends only to banks that are solvent and charges a “penalty” interest rate, according to a statement Wednesday from Warren, a Democrat, and Vitter, a Republican…………………………………….Full Article: Source

Why Goldman Sachs Might Be Wrong In Expecting Crude Oil To Fall Again

Posted on 14 May 2015 by VRS  |  Email |Print

WTI crude broke the $60 barrel mark recently. However according to a note published by analysts at Goldman Sachs the rally in crude might have extended itself and the prices will correct soon. Ken Sill of Global Hunter Securities was on CNBC to discuss why he thinks analysts at Goldman might be wrong.
$70: The Equilibrium: “We think that oil below $50 probably overcorrected to the downside,” Sill said. “We know we don’t need $100 per barrel and 1,600 oil rigs drilling in the United States, but somewhere between $50 and $100 is and we think $70 is kind of where the market will ultimately equalize around, but it’s going to go up and down, but we think $60 plus or minus five bucks is kind of where the market seems to want to be.”……………………………………Full Article: Source

Aluminium: The story of a base metals contango on the LME

Posted on 14 May 2015 by VRS  |  Email |Print

Aluminium premiums have been dropping sharply this year but what enabled the financing deals that locked up metal in the first place? Over the next few days, Metal Bulletin will be running a series of articles on the history of the LME aluminium contract and particularly the spread between nearby prices and those further out.
Aluminium premiums have sunk this year. Since the start of 2015, the cost of obtaining nearby delivery has seen its sharpest fall since the financial crisis, and many are now forecasting further falls throughout the rest of the year as Chinese exports and former warehouse stocks saturate the market…………………………………….Full Article: Source

Minor rally in prices unlikely to herald return to good old days

Posted on 13 May 2015 by VRS  |  Email |Print

Recent weeks have seen both a struggle between two potential suitors seeking control of Asia Resource Minerals, an Indonesian coal company, and a debate over the soundness of the accounting practices at Noble Group, a Hong Kong-based, Singapore-listed trading company. The debate over Noble grew more intense after it reported a 30 per cent drop in operating income to $106m for the first quarter and came after several research reports criticised the group’s accounting.
While developments at the two groups are unrelated on the surface, they underscore the difficulties faced by Asian commodity producers and the trading companies that serve as the middlemen between them and their customers………………………………………..Full Article: Source

Why commodity giants need to think like manufacturers

Posted on 13 May 2015 by VRS  |  Email |Print

Resources companies were very matter-of-fact about cutting their capital expenditure when conditions took a turn for the worse in emerging markets, now they are facing the fact that they must act like lean, mean manufacturers.
For too long, energy and base metals giants used their big diversified structures to bamboozle investors about returns stretched out across vast geographies while shoveling cash and debt into more projects to achieve scale. That’s all changing as industry giants attack the cost side of the business with the C-suite readily replacing the word “expansion” with “efficiency”………………………………………..Full Article: Source

Commodity prices still likely to fall: Kames

Posted on 13 May 2015 by VRS  |  Email |Print

Investors should remain wary of commodity markets, despite some prices appearing to stabilise, Kames Capital chief investment officer Stephen Jones has claimed. Jones said while oil and copper appeared to have hit a floor in terms of price and were enjoying strong inflows through exchange-traded funds, the main factors depressing prices remained.
He said: “When you look through short-term factors for commodities, for example unrest in the Middle East and its impact on oil, analysis inevitably reverts back to supply and demand dynamics to dictate the price. “A rampant US dollar, large build-ups of reserves and few signs of increasing demand mean commodities continue to be challenged.”……………………………………….Full Article: Source

Volatile Oil Market May Hurt Global Economy

Posted on 13 May 2015 by VRS  |  Email |Print

The dramatic fall in oil prices since last summer has been a boon for global consumers taking advantage of cheaper fuel and lower utility bills. But the price rout has increased the volatility of the crude market, which could end up hurting the global economy, a new report warns.
Volatile energy prices can lead to delays in business investment and slower job growth, according to the report co-authored by Nicholas Stern, former U.K. Treasury official and a prominent climate economist………………………………………..Full Article: Source

Here’s why Iran and Iraq should worry OPEC

Posted on 13 May 2015 by VRS  |  Email |Print

Caveat emptor! The big Organization of Petroleum Exporting Countries (OPEC) summer pow-wow is only 24 days away now and ceteris paribus we should see a continuation of the status quo. Right that’s enough Latin, the only languages that really count at the meeting will be Arabic, Farsi, Kurdish and money, namely petrodollars.
As far as I can see, this one is about how Saudi Arabia, Iran and Iraq solve a growing problem of how you cap OPEC production – and thereby falling prices - at a time when Baghdad and Tehran are desperate to up output………………………………………..Full Article: Source

Precious metals looking up

Posted on 13 May 2015 by VRS  |  Email |Print

Imports of gold, silver, and platinum jewelry to the United States continued to grow in the first quarter of the year, rising 14.9%, 6.9% and 6.7%, respectively, on a volume basis from year ago levels. In value terms, precious metals jewelry imports were up 6.6% in the three-month period from year ago levels.
This increase is in contrast to the 5% decline in jewelry store sales in the country in the first two months of the year, according to U.S. Census Bureau data. Lower precious metals prices and a stronger U.S. dollar continued to encourage stock building among wholesalers of foreign-made jewelry. While domestic retail sales appear to have disappointed to the downside in the first few months of the year, likely due to adverse weather, positive expectations for better demand seems to remain intact………………………………………..Full Article: Source

Investors return to zinc but are they chasing shadows?

Posted on 13 May 2015 by VRS  |  Email |Print

Investors are stampeding back into the London zinc market. Their return has triggered a super-charged rally in prices. On the London Metal Exchange (LME), three-month metal has soared from under $2,000 per tonne in mid-March to last week’s highs above $2,400 per tonne.
Spreads have tightened as shorts scramble to cover positions in the face of a dominant long position controlling somewhere between 40 and 50 percent of non-cancelled LME stocks. LME stocks, meanwhile, continue to fall at a steady pace. They are now down by around 35 percent, or 239,000 tonnes, since the start of the year………………………………………..Full Article: Source

Japanese used aluminum can prices track weak ingot import premiums lower

Posted on 13 May 2015 by VRS  |  Email |Print

A fall in Japanese aluminum ingot import premiums has dampened domestic used beverage can prices, while other aluminum scrap prices have remained stable over the past month, local scrap brokers said Tuesday, May 12. The sales price of used beverage cans to secondary aluminum alloy smelters was around Yen 160-Yen 170 ($1.33-$1.41)/kg on a delivered basis this week, said scrap dealers in Nagoya and Tokyo.
In Nagoya, deals were done at around Yen 160/kg delivered, down Yen 5/kg from April and down Yen 20/kg from earlier in the year, a local dealer said. “The final users of used beverage cans are aluminum rolling mills making cansheets, and the rolling mills usually cite the import premiums [when negotiating feedstock prices],” the dealer said………………………………………..Full Article: Source

OPEC members unlikely allow Iran to regain market share

Posted on 12 May 2015 by VRS  |  Email |Print

OPEC member countries unlikely to allow Iran to regain market share, Thomas Pugh, commodities economist at British economic research and consulting company Capital Economics believes. Iran’s oil minister, Bijan Zanganeh this week said the country will increase oil exports by more than one million barrels per day and urged other oil-producing countries “to pave the way for the return of Iranian oil to the world market” after the removal of international sanctions.
Zanganeh said Iran’s oil export has decreased by 60 percent since “crucial international sanctions” against the country were imposed (in mid-2012), adding that oil producers should make room for Iranian oil export resumption after sanctions are removed, Shana news agency reported………………………………………..Full Article: Source

Hedge funds lift bullish copper bets to August high

Posted on 12 May 2015 by VRS  |  Email |Print

Hedge funds and other speculators raised their net long position in copper to the highest level since August, the latest data show, as China cut interest rates for the third time in six months. Net long positions rose by 17,731 lots to 31,654 lots, the latest data from the Commodity Futures Trading Commission show, writes Henry Sanderson, commodities reporter.
Copper for July delivery, the most actively traded contract, slipped 0.48 per cent Monday on the New York Mercantile Exchange, despite the news of further monetary easing from China. It has risen 3.8 per cent this month………………………………………..Full Article: Source

RBA expects commodity export prices to stay high

Posted on 11 May 2015 by VRS  |  Email |Print

The outlook for Australia’s commodity exports has been further downgraded by the Reserve Bank but, like Treasury, it still believes prices will remain permanently higher than ever before, even at the peak of the last big boom 40 years ago.
Downgrades in the terms of trade (the ratio of export prices to import prices) will be one of the main sources of revenue writedown in tomorrow’s federal budget, despite Treasury endeavouring to make the estimates included in both last year’s budget and the mid-year budget update published last December more conservative than the market consensus………………………………………..Full Article: Source

Markets to rule oil prices in the coming years

Posted on 11 May 2015 by VRS  |  Email |Print

Despite the recent blip - oversupply continues to weigh on crude markets. In recent weeks, oil prices went up by around 50 percent - from January’s six-year low - posting their largest monthly gain in almost six years in April. Over the past one month, markets soared $15 a barrel - interestingly during a season when historically prices tend to be weak.
Yet the buzz is a growing - this rally is unsustainable. A consensus seems emerging. The upswing indicates a deep disconnect with the physical markets - Reuters quoted traders as saying - as tens of millions of West African, Azeri and North Sea barrels appeared struggling to find buyers………………………………………..Full Article: Source

Gold Holds Gain on Rate Outlook After Jobs Data; Palladium Drops

Posted on 11 May 2015 by VRS  |  Email |Print

Gold held an advance as investors gauged the outlook for higher interest rates after data showed that U.S. payrolls increased and unemployment fell while wage gains were limited. Palladium dropped from an eight-week high.
Bullion for immediate delivery added as much as 0.2 percent to $1,190.54 an ounce and was at $1,190.05 at 8:55 a.m. in Singapore, according to Bloomberg generic pricing. The metal rose 0.3 percent on Friday after the Labor Department release to cap the first weekly gain in a month. Gold in Shanghai fell………………………………………..Full Article: Source

Nickel bulls’ focus on LME stocks a risky strategy

Posted on 11 May 2015 by VRS  |  Email |Print

For the nickel market, it’s a case of once bitten, twice shy. Analysts are finding ever more evidence that the Indonesian ban on nickel ore exports introduced at the start of 2014 is finally starting to impact China’s massive nickel pig iron (NPI) sector.
Chinese stocks of nickel ore are falling. So too, everyone agrees, is actual NPI production, although the scale and pace of decline is difficult to pinpoint in what is a notoriously opaque part of the nickel supply chain. China’s imports of nickel are trending higher, particularly those of ferronickel, the most obvious substitute for NPI. Yet the market remains decidedly unenthused by these developments………………………………………..Full Article: Source

Tin may make a smart comeback

Posted on 11 May 2015 by VRS  |  Email |Print

Metal prices are in a meltdown globally and tin is no exception. Tin has been the worst performer among metals, falling 20 per cent so far this year. The metal now trades near a seven-year low of about $16,000 a tonne — lower than its production cost.
After touching a low of under $16,000 due to increased export from Myanmar to China, prices stabilised, thanks to the drastic output cuts announced recently by Indonesia, a major tin producer. What’s more, after a bleak performance in the last few years, analysts expect a turnaround aided by reduction in supply, and robust demand from the electronics industry in the coming years………………………………………..Full Article: Source

Indonesia Considers Rejoining OPEC

Posted on 08 May 2015 by VRS  |  Email |Print

Indonesia is considering rejoining the Organization of the Petroleum Exporting Countries as an observer after leaving the group six years ago, a minister said Thursday. “We want to have an interaction with the market [by becoming an observer in OPEC],” the Minister of Energy and Mineral Resources Sudirman Said said. He said Indonesia has in the past been invited by OPEC to attend meetings as an observer.
Indonesia discontinued its OPEC membership when it expired on Jan. 1, 2009. It has been a net oil importer since the early 2000s. The government is struggling to increase the country’s crude-oil production from about 830,000 barrels a day currently, while domestic consumption continues to rise………………………………………..Full Article: Source

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