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Commodities Briefing - Category | Market Moves more

The commodity super-cycle that wasn’t

Posted on 03 September 2015 by VRS  |  Email |Print

And now speculation about Glencore cash-calls is also doing the rounds. A good time in FT Alphaville’s book to hand over the floor to Simon Hunt, commodity market veteran, consultant and the man who long predicted that the post-crisis commodity super-cycle wasn’t much of a super-cycle at all. He offers the following to FT Alphaville this Wednesday (our emphasis):
The Short Tale of a Copper Super Cycle that Never Was. It’s been a long road since copper prices started crashing in the second half of 2008. Much of the producing and merchant sectors were in sufficient trouble for there to be a risk of failures if not of a size to cause a global systemic problem. ……………………………………….Full Article: Source

Waning demand for commodities sends cargo ships to scrapyard

Posted on 03 September 2015 by VRS  |  Email |Print

As China’s slump deepens, it’s off to the scrapyard for a growing number of global cargo ships. A drop in shipping rates amid the collapse in demand for coal, ore and other commodities has sparked a sharp rise in the number of ships yanked from the service and sold for scrap.
Almost 6 per cent of the world’s fleet of ships that carry bulk commodities will be beached and sliced up for scrap metal this year, up from 2 per cent last year and topping the recent high of 2012’s 4.3 per cent, according to Clarksons PLC, a London-based ship broker. “Business is good,” said Yogesh Rehani, director of operations at Global Marketing Systems Inc. (GMS), a buyer and recycler of ships. ……………………………………….Full Article: Source

Will Oil Cause the Next Recession?

Posted on 03 September 2015 by VRS  |  Email |Print

If oil prices take another dramatic slide, as I believe they will, who wins and who loses? And could plummeting oil prices sow the seeds of the next recession? Oil-importing countries are obvious winners from falling crude prices. That includes the U.S., where — despite a surge in domestic production — imports still account for nearly 50 percent of petroleum consumption.
The net oil-importing countries of western Europe and Asia also benefit from falling crude prices. India and Egypt, which subsidize domestic energy use, will surely benefit. Some of that, however, will be offset because crude oil is priced in U.S. dollars, and those countries’ currencies have grown weaker against the greenback………………………………………..Full Article: Source

OPEC Split on Need for Long-Term Oil-Price Forecasts

Posted on 03 September 2015 by VRS  |  Email |Print

Saudi Arabia and its Gulf allies are at odds with Iran and other OPEC members over whether the organization should include oil-price forecasts in its long-term strategy report, according to three of the group’s delegates.
The Gulf kingdom, which has led the Organization of Petroleum Exporting Countries in a battle against rival producers, is seeking to exclude price assumptions from the report, according to the delegates, who asked not to be identified because the document isn’t public. The disagreement reflects internal divisions over whether OPEC policy should focus on prices or the stability of the oil market, one of the delegates said………………………………………..Full Article: Source

Where is the oil market heading?

Posted on 03 September 2015 by VRS  |  Email |Print

It’s difficult to recall a time when energy markets have been this volatile over a sustained period of several weeks. Raymond James analyst Andrew Bradford noted that the absence of core fundamental investors, who are for the most part underweight energy, has left a void in trading volumes. That’s meant much sharper moves up and down for the sector.
It remains unclear whether the rally that began late last week and continued early this week, though it pulled back Tuesday, is warranted given the fundamental picture. It could simply be the result of news-driven short covering………………………………………..Full Article: Source

Gold demand from China and India picks up

Posted on 03 September 2015 by VRS  |  Email |Print

London’s gold market is showing tentative signs of increased demand for bullion from consumers in emerging markets, after the price of the precious metal fell to its lowest level in five years in July. The cost of borrowing physical gold in London has risen sharply in recent weeks. That has been driven by dealers needing gold to deliver to refineries in Switzerland before it is melted down and sent to places such as India, according to market participants.
“[The rise] does indicate there is physical tightness in the market for gold for immediate delivery,” said Jon Butler, analyst at Mitsubishi. The move comes as Indian gold demand picked up in July, with shipments of gold from Switzerland to India more than trebling. Most of that gold is likely to originally come from London before it is melted down into kilobars by Swiss refineries, according to analysts………………………………………..Full Article: Source

There’s still too many gold market bulls

Posted on 03 September 2015 by VRS  |  Email |Print

Gold market-timers have yet to throw in the towel, and until they do, bullion is unlikely to stage a powerful rally. This is one reason why gold’s rally earlier this week was so anemic. The stock market’s plunge certainly gave investors every reason to invest in gold as a safe haven. But, according to contrarian analysis, the “wall of worry” that bull markets like to climb is not yet robust enough to support a stronger rally.
Just take how those timers reacted a month ago to gold’s falling to a new bear market low below $1,100. Surprisingly, they on balance remained more bullish than at many other times in recent years, even though gold on those occasions was trading at higher prices………………………………………..Full Article: Source

China Seen Driving Commodities Lower as Uncertainty Spreads

Posted on 02 September 2015 by VRS  |  Email |Print

China will continue to hurt commodities in coming months as a volatile equity market and political uncertainty add to concern that economic growth is weakening, according to Citigroup Inc.
Demand for raw materials will weaken while a spillover from financial markets adds further pressure on prices, analysts including Ivan Szpakowski wrote in a report Tuesday subtitled “Riding the Chinese Rollercoaster.” Corruption investigations have also crippled investment by some state companies, particularly power grid operators that support copper demand, according to the bank………………………………………..Full Article: Source

A Corner of the Oil Market Shows Why It’s So Tough to Read China

Posted on 02 September 2015 by VRS  |  Email |Print

Glencore Plc’s Ivan Glasenberg has lamented the difficulty of reading China’s commodity demand. The nation’s oil traders aren’t helping. State-run China National United Oil Corp., a unit of the country’s biggest energy company, bought 36 million barrels of Middle East crude last month as part of a pricing process in Singapore used to determine commodity benchmarks around the world.
While the purchases by the trader known as Chinaoil were unprecedented, what’s more unusual is that the seller of most of those cargoes was another government-owned trading company called Unipec………………………………………..Full Article: Source

Don’t Count on OPEC Cuts While Iran Plans to Go It Alone

Posted on 02 September 2015 by VRS  |  Email |Print

Any speculation the 12 members of OPEC may rein in oil production underestimates Iran’s determination to go it alone. Oil in London surged about 8 percent Monday, capping the biggest three-day increase in 25 years. The gain was partly driven by the Organization of Petroleum Exporting Countries saying that it’s ready to talk to other producers to achieve “fair and reasonable prices.”
The commentary in its monthly magazine included an oft-repeated caveat: OPEC won’t reduce output unless the burden of propping up crude is shared with non-member nations………………………………………..Full Article: Source

Gold price edges up but mood could turn

Posted on 02 September 2015 by VRS  |  Email |Print

Gold is marginally higher this morning but remains rooted within a narrow range. According to one analyst, the metal is vulnerable to a fresh wave of selling from funds poised to increase bearish bets. Having risen slightly on the latest Asian market declines, which the Wall Street Journal claims have boosted gold’s “safe haven appeal”, gold continued its gradual positive trend in European trading and was up around $6 an ounce to $1,141.
This is still around two per cent off a recent high reached a little over a week ago and, the Journal notes, below the symbolically important $1,150 support level at which rallies have run out of steam of late………………………………………..Full Article: Source

Direct reduction iron ore pellet premiums down on weaker demand

Posted on 02 September 2015 by VRS  |  Email |Print

Direct reduction (DR) pellet premiums moved lower for September as participants looked to factor into contract pricing talks weaker overall pellet demand and DRI growth prospects in the Middle East for the current year. Estimated premiums for September cargoes fell to $39.50/dry mt, down $1.50/dmt from $41/dmt in August as a resumption in discussions starting after Ramadan and the summer break looked to finalize terms.
Previous provisional prices in the $40-41/dmt range gave way to downward pressure on supplier offers that had been in the mid $40s/dmt. Lower gas availability in Egypt and regional unrest in parts of the Middle East and North Africa coupled with competitive steel imports led by China and from the Commonwealth of Independent States trimmed potential growth………………………………………..Full Article: Source

Arab OPEC producers brace for oil-price weakness for rest of 2015

Posted on 01 September 2015 by VRS  |  Email |Print

A second oil price rout of 2015 has forced Arab OPEC members to cut their price expectations for this year, showing they are prepared to tolerate cheaper crude for longer to defend market share and curb rivals’ output. OPEC delegates, including those from core Gulf OPEC countries, see economic troubles in top energy consumer China as short-term and unlikely to have much impact on demand for crude which will rise seasonally in the fourth quarter.
But they also believe it will take more than just a few months for weak oil prices, which fell to a more than six-year low near $42/barrel on Monday, to reduce supplies from higher-cost producers such as US shale and stimulate demand………………………………………..Full Article: Source

OPEC says there’s ‘no quick fix’ for low oil prices

Posted on 01 September 2015 by VRS  |  Email |Print

The Organization of the Petroleum Exporting Countries on Monday said there is “no quick fix” for the low oil-price environment and voiced concern about its impact on the petroleum industry. In commentary released Monday, OPEC said continuing pressure on prices “remains a cause of concern for OPEC and its members,” as well as for “all stakeholders in the industry.”
West Texas Intermediate and Brent crude futures have dropped by roughly half from the year ago level. On Monday, however, October crude was up nearly 6% at $47.86 a barrel on the New York Mercantile Exchange, while Brent crude on the ICE Futures exchange added 5.7% to $52.90 a barrel………………………………………..Full Article: Source

Hedge fund positioning shows why gold price rally fizzled

Posted on 01 September 2015 by VRS  |  Email |Print

On Monday, the gold price continued to drift sideways as a measure of calm returned to global equity markets and the focus shifted back to a recovering US economy. In afternoon dealings on the Comex market in New York, gold futures with December delivery dates lost $0.70 to $1,133.40 an ounce in quiet trade.
Gold is still well above a more than five-year closing low of $1,084 struck August 5 as China’s economic woes and shock currency devaluation sent ripples through markets. But the safe haven buying amid the panic on markets did not materialize to the extent many bulls had hoped………………………………………..Full Article: Source

Iron ore eyes monthly gain, but soft China steel to weigh

Posted on 01 September 2015 by VRS  |  Email |Print

Spot iron ore prices are set to end August higher, supported by lean inventory at Chinese mills and a recovery in futures markets, although expectations of increased supply later in the year may cap upside potential. Inventory of imported iron ore at major Chinese ports fell to 80.45 million tonnes as of Aug. 28, the lowest since late June, according to data tracked by consultancy SteelHome.
“Lean iron ore inventory at mills and lower port inventory may prevent prices falling to the forecasts of the most bearish among the bears,” said Adrian Lunt, assistant vice president for commodities at the Singapore Exchange. Iron ore for immediate delivery to China’s Tianjin port jumped 4.1 percent to a one-week high of $55.50 a tonne on Friday, according to The Steel Index. ……………………………………….Full Article: Source

Even a modest slowdown in China sacks the global commodities market

Posted on 31 August 2015 by VRS  |  Email |Print

Until recently, China was a beast whose appetite knew almost no limit. It feasted on the world’s raw materials, buying them in a voracious, globe-spanning spree. Indonesian coal powered villages that morphed into mega-cities. Peruvian copper lined power cables for nearly 100 new mass-transit rail lines. Brazilian and Australian iron ore was turned into steel for skyscrapers rising in Shanghai at a rate of one per week.
So profound was that growth that even the hint of a slowdown is causing convulsions in the many countries that fed China’s rise. The deceleration in Chinese investment and construction, though gradual, has come with a dramatic side effect: a vast lowering in the value of the raw materials that are mined or drilled from the earth. By one major measure, commodity prices across the globe are at their lowest point in a century………………………………………..Full Article: Source

Hedge, to cope with commodity swings

Posted on 31 August 2015 by VRS  |  Email |Print

Oil, gas and non-ferrous metals are currently undergoing their biggest price correction since the recession of 2008. Economic volatility has shaken up the commodities market. China’s uncertain economic situation is likely to loom large over the metals sector in 2015.Recently, the Thompson Reuters Core Commodity index hit its lowest point since April 2003. Effectively, the market has erased all gains of the decade-long commodities “super-cycle”{+.}
Volatility has not spared the agricultural markets either, with corn showing volatility of over 24 per cent in 2014 and coffee volatility at the end of 2014 increasing to 50 per cent. This is a tectonic shift in the world of commodities — where relying on fundamentals of physical supply, demand and inventory positions alone cannot explain the extent of volatility………………………………………..Full Article: Source

Oil market turmoil generates speculations

Posted on 31 August 2015 by VRS  |  Email |Print

Tumult in oil markets was enough to create speculations about a possible de-pegging of riyal with dollar and possibly of using a mixed basket for oil revenues. Fears about the growth of Chinese economy and equities rout in Beijing sent currency values reeling.
More than $3.3 trillion was erased from the value of global equities after China’s devaluation of yuan. And with this revision, like all other commodities, oil too suffered a major blow. Saudi economy, so intertwined with the oil markets, is also faced with major blowbacks………………………………………..Full Article: Source

China’s Economic Slowdown Hurts Oil Market

Posted on 31 August 2015 by VRS  |  Email |Print

The 2015 budgets did take account of the near halving in the previous year of oil prices which had remained broadly stable at $110 a barrel between 2010 and 2015. When the oil price halved past year, from $110 to $55 a barrel, the cause was obvious: Saudi Arabia’s decision to increase its share of the global oil market by expanding production.
Reports earlier this week suggested that Venezuela was seeking an emergency OPEC meeting to discuss strategies about overturning the collapse in prices, which has hit the South American country quite hard. The country suffers from “operating difficulties at existing, mature oil fields”, according to the U.S. Energy Information Administration………………………………………..Full Article: Source

Venezuela Asks OPEC for Emergency Meeting on Oil Prices

Posted on 28 August 2015 by VRS  |  Email |Print

Hard-hit Venezuela has been contacting other OPEC members to push for an emergency meeting in coordination with Russia to come up with a strategy to stop the current oil price rout, people familiar with the matter said.
According to these people, Venezuela has been in touch with some members of the Organization of the Petroleum Exporting Countries, including Qatar’s oil minister and president of the OPEC conference, Mohammed al-Sada, to try again to find common ground to defend crude prices………………………………………..Full Article: Source

Rusal cites China aluminum semi exports as reason for global surplus

Posted on 28 August 2015 by VRS  |  Email |Print

Russian aluminum producer Rusal said Thursday in its second quarter results that the increase in exports of aluminum semi-finished products from China is the main reason behind a global surplus this year. “The main change to the supply environment resulted from the export of aluminum semis from China. Net exports of semis rose by 47% year on year in H1 2015,” the company said.
The producer noted that overcapacity in the Chinese market continued throughout Q1 with a record supply of 7.45 million mt, up 8.3% year on year. As a result, Rusal believes total aluminum stocks in China grew to 3 million mt in Q1, an increase of 1% year on year………………………………………..Full Article: Source

Commodities are ripe for a rebound

Posted on 27 August 2015 by VRS  |  Email |Print

Investors sentiment surrounding commodity prices is at its lowest level in decades — but some analysts believe that a rebound is on tap. “Investor sentiment for commodities has rarely, if ever, been more negative,” said Julian Jessop, an analyst at Capital Economics, in a note Wednesday. But there are “plenty of reasons to take a contrarian” — and more positive view on commodities.
Year to date, prices for Brent crude have suffered from a loss of more than 24% on the ICE Futures exchange, while West Texas Intermediate crude was down roughly 27% on the New York Mercantile Exchange. Metals prices have also seen sizable losses with gold down around 4.9% and copper dropping more than 20% on Comex for the year so far………………………………………..Full Article: Source

Oil Prices Fall on Less Gas Demand, Growing Glut

Posted on 27 August 2015 by VRS  |  Email |Print

Oil prices resumed falling after U.S. stockpile data showed a surprise drop in gasoline demand and record supplies of crude oil and petroleum products. The data reaffirmed growing concerns that the global oil market will remain awash in crude through the end of the year.
Oil prices have plunged in recent weeks on worries that the global glut of crude that halved oil prices in 2014 has yet to shrink. U.S. crude production remains near multidecade highs, despite large spending cuts by producers, and members of the Organization of the Petroleum Exporting Countries continue to pump at high levels………………………………………..Full Article: Source

Why the oil price could be depressed for a generation

Posted on 27 August 2015 by VRS  |  Email |Print

The oil price may have fallen to its lowest level since the financial crisis, but Chris Taylor believes it will get cheaper. The oil price has been one of the major casualties of the downturn in global markets over the last few weeks, tumbling to levels not seen since the depths of the financial crisis.
A barrel of Brent crude oil now costs $43.67, and fell as low as $42.23 during the Black Monday sell-off. It is down 62% since its most recent peak, of nearly $115, set in June last year. Chris Taylor, head of research at fund group Neptune, believes oil has further to fall, and thinks its price could remain in the doldrums for a generation. He argues that investors are still failing to appreciate the implications of fracking, and the shale oil it produces………………………………………..Full Article: Source

Gold Gets Ignored Amid Market Turmoil as Focus Stays on Fed

Posted on 27 August 2015 by VRS  |  Email |Print

This week’s turmoil across global markets did little to bring people back to gold as investors ignored the metal’s haven appeal and focused, instead, on the prospect of higher U.S. interest rates.
Futures in New York fell for a third straight day, the longest stretch this month, even as global growth concerns spurred the biggest global equity rout in four years. Citigroup Inc. cut estimates for gold, silver and other metals, and investors pulled money from exchange-traded products backed by bullion for the first time in five days………………………………………..Full Article: Source

Commodities Rebound From 16-Year Low as Oil, Metals Lead Gains

Posted on 26 August 2015 by VRS  |  Email |Print

Flush from a collapse in everything from oil to aluminum to cotton, commodity bears are taking a break. A measure of returns from 22 raw materials advanced on Tuesday, recovering from the lowest level since 1999 on concern a slowing Chinese economy will exacerbate supply gluts. Shares in miners and explorers outside China including Glencore Plc, Fortescue Metals Group Ltd. and Antofagasta Plc recouped some losses after a selloff that wiped $2.7 trillion from global equity markets.
“Short-term stabilization is possible but that doesn’t mean it cannot fall further,” Dominic Schnider, head of commodities and Asia-Pacific foreign exchange at UBS Group AG’s wealth-management unit in Hong Kong, said by phone. “The headwinds are still there.”……………………………………….Full Article: Source

Lessons from the oil market’s “lost decade”: Kemp

Posted on 26 August 2015 by VRS  |  Email |Print

Saudi Arabia and its OPEC allies are counting on strong growth in demand coupled with slower growth in non-OPEC supply to rebalance the oil market in 2016. But the experience of the “lost decade” after prices slumped in 1986 suggests rebalancing could take longer than some OPEC members and market analysts expect.
Following the price slump in 1985/86, the oil market struggled with persistent surpluses for much of the next 17 years. In real terms, oil prices did not rise above the 1986 crisis level on a sustained basis until 2003……………………………………….Full Article: Source

Iran says Will Reclaim Full Oil Market Share

Posted on 26 August 2015 by VRS  |  Email |Print

Iran will ramp up crude oil production and reclaim its lost share of exports shortly after international sanctions on the OPEC member are lifted, Iran’s oil minister Bijan Zanganeh said on Tuesday. Iran and six world powers agreed a deal in July to curb Tehran’s nuclear program, but sanctions imposed in 2012 will not be lifted until Iran has complied with all the terms of the pact.
Britain’s foreign minister said on Monday that international sanctions on Iran could start to be lifted as early as spring next year. At a news conference in Tehran, Zanganeh said Iran should sell its crude regardless of the oil price………………………………………..Full Article: Source

Market Rout Hasn’t Done Much for Gold

Posted on 26 August 2015 by VRS  |  Email |Print

The rout in global equity markets has only managed to underpin gold, as resistance at $1,170 to $1,172 has kept a lid on the market. Even news that Belarus has added to reserves has done little to encourage fresh length as this is just the fourth day of a short-covering rally.
It seems no one is ready to add risk before Labor Day and the mentality of “throwing the baby out with the bath water” may keep some gold bugs sidelined, but I still believe the global uncertainty will support any selloff. If we break $1,172, I would think that one-month $1,200 calls are worth a cheap bet. ……………………………………….Full Article: Source

EU Probing ‘Anticompetitive Behavior in Precious Metals Spot Trading’

Posted on 26 August 2015 by VRS  |  Email |Print

The European Union’s competition watchdog is investigating alleged “anticompetitive behavior in precious metals spot trading,” a spokesman said. The spokesman for the European Commission, Ricardo Cardoso, declined to give more details on the probe.
The Wall Street Journal reported in February that U.S. officials are probing at least 10 major banks for possible rigging of the precious metals market. The U.K. Financial Conduct Authority and German financial watchdog BaFin had previously reviewed the precious metals benchmarks, but closed their inquiries without finding evidence of wrongdoing, people familiar with those probes said at the time………………………………………..Full Article: Source

Iron ore and oil plunge as China sharemarket rout hits commodities

Posted on 25 August 2015 by VRS  |  Email |Print

Iron ore’s period of relative price stability has come to an abrupt end as China fears rattle commodity markets. The price of iron ore at the Port of Qingdao slumped 5 per cent to $US53.28 per cent on Monday as a savage sell-off gripped Asian markets.
It’s the first significant fall in commodity’s price since early July, when it traded as low as $US44.59. Since then, iron ore has traded in a relatively narrow range compared to the volatility it has experienced through the year. Expectations remain for iron ore’s price to regain its downward march and Australian miners were hit hard overnight as selling swept through European markets………………………………………..Full Article: Source

Oil slides to 6-year low as commodities tumble

Posted on 25 August 2015 by VRS  |  Email |Print

Oil plummeted more than 6 per cent to levels last seen during the financial crisis and a broad index of commodity prices slid to the lowest point of this century as economic doubts gathered over China, the engine room of demand growth over the past decade.
China is the world’s largest importer of raw materials and the biggest energy consumer globally. Mounting signs of a sputtering economy, including a plunge in the Shanghai equity market Monday, have raised the prospect of softer demand for oil and other commodities, removing another support for prices laid low by plentiful supply………………………………………..Full Article: Source

Will they or won’t they? Nerves fray over potential OPEC cut as oil gets routed

Posted on 25 August 2015 by VRS  |  Email |Print

As the selloff in global markets converge with growth concerns to drive down oil prices, analysts are weighing the odds that OPEC could be forced into a production cut. In the middle of mounting speculation that major oil producing countries could cut output to put a floor under falling prices, crude tumbled to fresh six and half year lows on Monday.
The moves followed last week’s losses that drove U.S. light crude below the $40 mark on Friday, with the international Brent contract following a similar path downward. The next scheduled meeting for OPEC is not until December 4th 2015. Yet with oil getting walloped daily, some think it could come much sooner—and that the oil cartel may be forced to send a message to stanch the bloodbath in crude markets………………………………………..Full Article: Source

Oil market loses faith in Saudi oil strategy

Posted on 25 August 2015 by VRS  |  Email |Print

Saudi Arabia’s strategy for rebalancing the oil market through a period of lower prices shows few signs of working so far - with rival producers claiming they will raise output even as prices slide to new lows.
Saudi policymakers insist the kingdom will maintain its market share and let low prices take care of the surplus by forcing cuts from higher cost producers and stimulating fuel demand. With prices down by more than half compared with the same point in 2014, oil consumption is growing at some of the fastest rates for a decade………………………………………..Full Article: Source

Commodities Are Cheapest Since 2002, But Maybe Not Cheap Enough

Posted on 24 August 2015 by VRS  |  Email |Print

Here’s one more way to measure just how bad the commodity meltdown has gotten: compare the asset class to stocks. The Standard & Poor’s GSCI Index of 24 raw materials is now trading near its cheapest since 2002 compared with the S&P 500 Index of U.S. shares. But if you trust history for providing guidance, that’s still not low enough.
During the last big shift from commodity bull markets to bear markets, the ratio dropped even lower. After peaking in October 1980 amid supply shortages, producers responded to higher prices by boosting output. As gluts emerged, the ratio tumbled 96 percent to a record low of 0.1 in February 1999………………………………………..Full Article: Source

Commodity markets tumble as China weakness spreads

Posted on 24 August 2015 by VRS  |  Email |Print

Commodities markets hit fresh lows in early Asian trading on Monday as fears spread that a more severe slowdown in China would pull down other economies in the region, denting energy and raw material consumption. In Japan, the Nikkei share average tumbled more than 2 percent to its lowest level in nearly five months on Monday as worries over slower growth in the Chinese economy intensified.
The weak sentiment in Asia also hit oil, the dominant fuel for transportation and most traded commodity. The two most important crude futures, U.S. West Texas Intermediate (WTI) and the global benchmark Brent , hit fresh 6-year lows on Mondays to levels last seen during the peak of the credit crunch of 2008/2009………………………………………..Full Article: Source

Iran says an OPEC emergency meeting may stop oil price slide: Shana

Posted on 24 August 2015 by VRS  |  Email |Print

Iran’s Oil Minister, Bijan Zanganeh, said on Sunday that holding an emergency OPEC meeting may be “effective” in stabilizing the oil price, Iran’s oil ministry news agency Shana reported. Algeria said earlier this month that the Organization of Petroleum Exporting Countries could hold an emergency meeting to discuss the drop in oil prices but other OPEC delegates said no meeting was planned.
“Iran endorses an emergency OPEC meeting and would not disagree with it,” Zanganeh told reporters in Tehran, according to Shana. U.S. oil prices CLc1 fell below $40 a barrel on Friday for the first time since the 2009 financial crisis, pressured by signs of oversupply in the United States and weak Chinese manufacturing data………………………………………..Full Article: Source

Oil markets stabilizing, OPEC supply may rise

Posted on 24 August 2015 by VRS  |  Email |Print

Oil prices ticked up and volatility declined during second quarter 2015. However, significant downside risks to prices remain because of supply increases by the Organization of Petroleum Exporting Countries, in particular by Iraq and Saudi Arabia.
The lifting of sanctions on Iran also has the potential to introduce another 700,000 barrels per day to the global market by the end of 2016, possibly depressing global prices by $5-15 per barrel. In the U.S., the drop in rig counts has slowed, but production continued to grow during the second quarter, though growth is expected to level off in the second half of 2015………………………………………..Full Article: Source

The Saudis could face an open revolt at the next OPEC meeting

Posted on 24 August 2015 by VRS  |  Email |Print

OPEC next gathers December 4 in Vienna, just over a year since Saudi Oil Minister Ali Al-Naimi announced at the previous OPEC winter meeting the Saudi decision to let the oil market determine oil prices rather than to continue Saudi Arabia’s role of guarantor of $100+/bbl oil.
Despite the intense financial and economic pain this decision has inflicted on Saudi Arabia, its fellow OPEC members, and other oil producers, the Saudis have given no indication they plan to alter course. In fact, Saudis have downplayed the impact of lower prices on their country, asserting that the kingdom has the financial wherewithal to withstand lower oil prices………………………………………..Full Article: Source

India’s gold demand could hit 950 tonnes as prices fall

Posted on 24 August 2015 by VRS  |  Email |Print

India’s gold demand might reach 950 tonnes this year as lower prices spur buying during the peak festival season and for weddings, the world’s biggest gold refiner, Valcambi, said. Stronger demand in the world’s second-biggest gold consumer could support global prices, which rebounded this week after hitting a 5-1/2 year low under $1,100 an ounce in July.
Valcambi chief executive Michael Mesaric said gold demand would be strong this year. “It could be between 900 tonnes to 950 tonnes,” he said on the sidelines of the International Gold Convention in the city of Panaji in Goa state………………………………………..Full Article: Source

Safe Haven Gold May Confirm Bullish Technical Cue

Posted on 24 August 2015 by VRS  |  Email |Print

As global investors dump stocks and risky emerging market assets, the safe haven U.S. dollar and gold prices have rallied. The daily gold chart could soon confirm a bullish technical signal that might encourage more speculative buying. If the price of gold - denominated in U.S. dollars - closes Monday above $1,173.04/oz, it will be inside the daily Bollinger uptrend channel and also above the Ichimoku Cloud resistance zone.
These two bullish signals could spur the pair toward the ceiling of the uptrend channel - currently at $1,209.15/oz. But if China’s central bank loosens monetary policy this week - as some are expecting - risk appetite could be revived and gold would then retreat. Gold is now trading at $1,158.10/oz from its Friday close of $1,160.65/oz………………………………………..Full Article: Source

Global markets tumble as commodity prices fall into ‘death spiral’

Posted on 21 August 2015 by VRS  |  Email |Print

Britain’s benchmark index falls into correction territory as US stocks suffer biggest fall since February 2014. The FTSE 100 fell into official correction territory on Thursday, one point shy of January’s year-low hit, after an eighth consecutive day of losses.
Fraught with concerns about slowing growth in China and the after-effects of last week’s devaluation of the yuan, investors fled to the side lines, bringing this week’s losses to 2.5pc. The FTSE 100 closed 35.56 lower at 6,367.89………………………………………..Full Article: Source

Here’s what could happen to stocks if commodities rebound

Posted on 21 August 2015 by VRS  |  Email |Print

Today is working up to be anything but the lazy, hazy summer day for trading you might expect. Let’s start with the nation that inspired “Borat.” Kazakhstan’s official currency, the tenge, took a sharp hit after the government moved it into free float. The Asian nation exports oil. Enough said.
And the slick stuff was getting crushed earlier, in the wake of gluttish inventory data. “The bias is lower. The only bulls left are bull ants. They are small,” Richard Hastings, strategist at Global Hunter Securities, said yesterday as oil sank 4%. Brace for a much bigger drop, say some analysts………………………………………..Full Article: Source

How cheap oil will hurt Iran’s comeback

Posted on 21 August 2015 by VRS  |  Email |Print

Western companies eye Iran’s business potential. Iran may be about to emerge from decades of economic isolation — at an absolutely terrible time for an oil-producing country. Years of painful economic sanctions by the West have ravaged Iran’s economy, sending unemployment and inflation soaring.
Now there’s a glimmer of hope for Iran. The historic nuclear deal with the U.S. and its allies paves the way for sanctions relief. If the agreement is ratified, Iran will be able to export oil to Western nations and generate badly-needed revenue. Here’s the catch: Oil prices are tanking and may stay depressed for some time………………………………………..Full Article: Source

Opec unity cracks as disgruntled members call for meeting to stem oil slump

Posted on 21 August 2015 by VRS  |  Email |Print

Divisions emerge within Opec as members frustrated by the oil price rout call on Saudi Arabia to scale back production in a bid to restore prices. Pressure is building on Saudi Arabia from members within the Organisation of the Petroleum Exporting Countries (Opec) to agree to an emergency meeting to arrest plummeting oil prices.
The Telegraph understands that Opec’s secretary general, Abdulla Salem el-Badri, has spoken to Saudi officials on behalf of members within the group who are coming under extreme economic pressure from oil prices dropping towards levels of $40 per barrel………………………………………..Full Article: Source

Commodity indexing embraces new methods

Posted on 20 August 2015 by VRS  |  Email |Print

It was 2012, and energy executives and policy specialists were excited by the promise of shale gas. From Texas to Pennsylvania, a bonanza was under way. But inside the downtown Manhattan offices of S&P Dow Jones Indices, record US gas production was causing a problem. Oversupply was filling storage caverns, reducing returns from futures contracts for the product, disrupting an important benchmark used by investors.
The total return version of the S&P GSCI gas index had collapsed to a value of 0.58 from 100 when it launched. “The index value had declined to such a low level that it became prohibitive for people to price products on it,” recalls Michael McGlone, a former S&P senior director of commodity indexing. “It’s difficult to track an index that’s priced at less than one.”……………………………………….Full Article: Source

Commodity assets halve from peak

Posted on 20 August 2015 by VRS  |  Email |Print

Assets invested in commodity funds have halved from their peak four years ago, hitting $127bn (£80.9bn) in July, data from Lipper shows. The assets have been hit by both outflows and underperformance of funds, as commodity prices have plummeted.
Over the past three months to July commodity funds have seen $3.2bn in outflows, with the past month alone seeing $1.7bn in outflows, the worst for any asset group. However, over the longer term outflows have been starker, with $39.8bn leaving the funds in the past three years………………………………………..Full Article: Source

Glencore first-half profit tumbles amid commodities rout

Posted on 20 August 2015 by VRS  |  Email |Print

Shares in Glencore, the FTSE-100 miner and commodities trader, have slumped to a record low after tumbling prices for coal and metals linked to slowing Chinese demand hit first-half profits.
Glencore closed down just under 10% at 159p, far below its 2011 float price of 530p, as it revealed a slump in earnings. In the first six months of 2015, adjusted earnings before interest, tax and other items fell 29% from a year earlier to $4.6bn (£2.9bn) as the price of aluminium, nickel and other raw materials fell. The company’s net income excluding significant items dropped by 56% to $882m………………………………………..Full Article: Source

Commodities investors adapt, but don’t add allocations - Pimco

Posted on 19 August 2015 by VRS  |  Email |Print

Commodities investors are altering their exposure to the asset class following the recent price declines, but aren’t boosting allocations and don’t look likely to for now, a senior executive at Pimco told Metal Bulletin. Nicholas Johnson, an executive vp and portfolio manager focusing on commodities and multi-asset portfolios, said that investors were trying to change their exposure “at the margins.” “Some investors are saying they are exposed to too much volatility and would prefer a lower volatility.
“We see some interest from investors to mix their commodity beta – so investment in the S&P Goldman Sachs Commodity Index, and a commodity hedge fund,” he said. “The idea of this is that the investor will have some commodity beta but they also have some absolute return, so together they lower volatility and they probably have a little better return expectation. We do see some people who were all beta before now going to a mix of beta and hedge funds,” he noted………………………………………..Full Article: Source

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