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Russia: Still too dependent on Commodities

Posted on 16 April 2015 by VRS  |  Email |Print

The unimaginable has happened: Oil prices have dropped to less than $50 a barrel in recent trading days. Of all the oil-producing countries in the world, it seems like Russia took the biggest hit, with its economy largely reliant on the world’s most vital commodities—metals, energy, and agriculture.
Russia is regarded as one of the world’s leading producers of minerals. In fact, the country ranks first in the production of chromium, nickel, and palladium. Russia’s Norilsk Nickel remains to be the top nickel and palladium mining smelting company in the world, as well as one of the top ten copper producers………………………………………..Full Article: Source

Citi: Q2 Commodities Outlook Hinges On Oil

Posted on 16 April 2015 by VRS  |  Email |Print

In a new report, analysts at Citi Research looked at the slumping commodity market and updated their forecast for 2Q15 and beyond. One of the topics that analysts addressed is whether or not the worst of the slump is over or if there is downside remaining in oil and other commodities.
Analysts believe that many commodities have found near-term support at current levels, but that this support could be short-lived. The center of the collapse in commodity prices is crude oil, and Citi analysts to not feel that crude oil has bottomed just yet. According to the report, demand for crude oil will be seasonably low in Q2 due to refinery turnarounds. In addition, investment outflows from physically-backed crude oil ETFs will likely push crude prices lower………………………………………..Full Article: Source

IEA Says Oil Market Recovery Could Be Delayed

Posted on 16 April 2015 by VRS  |  Email |Print

The prospect of Iranian crude oil flooding the market and Saudi Arabia pumping at near-record levels could delay a recovery in an oil market slammed by a historic price collapse, the International Energy Agency said.
The IEA, which tracks oil data for Western countries, and others have predicted that the world’s supply of oil would fall back in line with demand starting from the second half of this year, when U.S. producers are expected to begin cutting back production because of low prices………………………………………..Full Article: Source

Russia in Active Consultations with OPEC

Posted on 16 April 2015 by VRS  |  Email |Print

Russia is conducting “unprecedentedly active” consultations with the Organization of the Petroleum Exporting Countries but isn’t discussing oil production cuts to support prices, Russian officials said on Wednesday.
The consultations come after several months of low oil prices that are putting pressure on Russia’s budget and currency, but Russian officials poured cold water on any suggestion of coordinated production cuts………………………………………..Full Article: Source

Copper supply surplus to widen to 399,000 mt in 2015: GFMS

Posted on 16 April 2015 by VRS  |  Email |Print

Rising production and softer demand growth should see the copper market register a 399,000 mt surplus this year, up from a surplus of 316,000 mt in 2014, Thomson Reuters GFMS said Wednesday. “We do not expect a pick-up in prices of note until the latter half of 2015,” GFMS said in its Copper Survey 2015, though it added: “Wild cards remain and include supply-side surprises, with producers perhaps cutting back from planned targets, while China’s state stockpiler could be active again in the current year.”
GFMS is forecasting an average copper price for 2015 of $5,975/mt, a 12% drop from the previous year. Three-months copper closed London Metal Exchange floor trade at $5,950/mt on Tuesday………………………………………..Full Article: Source

Heartwood invests in commodities after two year hiatus

Posted on 16 April 2015 by VRS  |  Email |Print

Heartwood Investment Management has bought back into commodities after years of ignoring the sector. Its investment manager Jade Fu said he had not had any direct exposure to commodities, such as oil or gold, on his multi-asset portfolios for more than two years.
Weaker-than-expected demand, a surge of the supply of some commodities and a strong dollar have dragged down prices across the sector. Ms Fu said these fundamental factors were still present and meant the asset class “remains weak”. But she said: “We are beginning to see tentative signs of stabilisation across a number of sectors, particularly in energy, and we consider that now is the time to gain an entry point into the asset class.”……………………………………….Full Article: Source

Commodities squeeze growth

Posted on 15 April 2015 by VRS  |  Email |Print

Economic growth in sub-Saharan Africa is expected to slow to 4% this year, from 4.5% in 2014 on the back of falling commodity prices before picking up moderately next year, according to World Bank projections. This is while problems in the electricity sector continued to curtailed South Africa growth. The World Bank insisted that oil exporters such as Angola and Nigeria, were especially hard hit by sharply lower oil prices.
While in South Africa the energy power supply and policy uncertainty were having a negative impact. The World Bank’s Africa’s Pulse report focused on the continent’s economic prospects and pointed out that the downturn on growth largely reflected the fall in the prices of oil and other commodities………………………………………..Full Article: Source

Why India should be wary of Commodity shocks?

Posted on 15 April 2015 by VRS  |  Email |Print

Without further fiscal reforms, the Indian government may find it difficult to sustain the increase in public investment spending, according to a report, titled “India’s Fiscal Roadblocks Could Stall Infrastructure Progress,” that Standard & Poor’s Ratings Services published today.
“Although India’s budgetary performances have strengthened in recent years, its hard-won fiscal improvements could yet unwind because of a financial or commodity shock,” said Standard & Poor’s credit analyst Kim Eng Tan. “Subsidy spending is one key source of weakness, despite fuel-subsidy reforms in 2014. Another constraint is the heavy government debt.”……………………………………….Full Article: Source

Iran Oil Minister Wants OPEC to Cut Output by 5% Ahead of June Meeting

Posted on 15 April 2015 by VRS  |  Email |Print

Iranian Oil Minister Bijan Namdar Zangeneh on Tuesday called on the Organization of the Petroleum Exporting Countries to reduce production by at least 5% to boost prices that have collapsed since last summer, signaling the possibility of another tense meeting when the organization gathers in June.
OPEC has been pumping more than 30 million barrels a day since December, when the cartel decided against cutting production in the face of precipitously falling crude prices. Led by Saudi Arabia, and over the objections of countries such as Iran, Iraq and Venezuela, the cartel agreed to keep production high so that countries could protect their market share………………………………………..Full Article: Source

Don’t expect OPEC to budge on Iran’s call for oil-output cuts

Posted on 15 April 2015 by VRS  |  Email |Print

A call for the Organization of the Petroleum Exporting Countries to cut production helped rally prices on Tuesday. But the request from Iran isn’t likely to sway the crude-oil cartel, experts say.
“We have heard the same line from Iran since sanctions were imposed,” said James Williams, an energy economist at WTRG Economics. “It is hard to recall an OPEC meeting when Iran was not asking others to cut so that the price would rise.”……………………………………….Full Article: Source

Global gold market to consolidate in the long term

Posted on 15 April 2015 by VRS  |  Email |Print

The global gold market will likely continue to consolidate in the long term as volatility in the greenback will boost the metal’s prices. “This is given the US Federal Reserve’s (Fed) hesitation in raising interest rates,” said international foreign exchange broker ForexTime Ltd’s chief market analyst, Jameel Ahmad.
In a press conference today, Jameel said the global gold price was expected to move between US$1,140 (RM4,220) and US$1,210 an ounce for now. On the local front, the physical price of gold stood at RM138.13 a gramme as at 9.30am today, down 12 sen from RM138.25 at yesterday’s close………………………………………..Full Article: Source

Gold Market Is Becoming Very Data Dependent and Reactionary

Posted on 15 April 2015 by VRS  |  Email |Print

Gold has come back down below the key technical and psychological level of $1,200 where it has been trading range bound around all year. Tom Vitiello of Aurum Options Strategies tells TheStreet’s Jill Malandrino that gold is becoming more data dependent and reactionary.
Vitiello says the market feels fundamentally weak, but the structure will eventually correct itself. The key is getting longs back into the market getting through interest rate hike timing speculation, which is driving the headlines. $1,180 is a very important support level, although Vitiello sees gold moving lower beyond that to $1,130 in the near term………………………………………..Full Article: Source

China commodities imports resume after holiday but demand weak

Posted on 14 April 2015 by VRS  |  Email |Print

China’s commodities imports generally rose in March on a month earlier as shipments resumed after the Lunar New Year holiday, but analysts pointed to still weak demand for goods ranging from iron ore to coal and soybeans. Overall trade data showed China’s total exports shrank 15 percent in a surprise drop that will exacerbate concerns about the slackening Chinese economy.
The world’s top buyer of iron ore imported 80.51 million tonnes of the steelmaking ingredient in March, up 18.5 percent from the previous month as producers flooded the market and prices fell. First quarter shipments rose 2 percent but the pace of growth was down from 19 percent a year earlier………………………………………..Full Article: Source

OPEC slams oil producers with ‘go-it-alone’ attitudes

Posted on 14 April 2015 by VRS  |  Email |Print

The Organization of the Petroleum Exporting Countries published a stinging critique on Monday of oil-producing countries that had refused to follow its lead in holding back supply in an effort to boost prices.
“Today, operating purely through self-interest is quite simply frowned upon,” said the intergovernmental organization in a bulletin. “Yet, when it comes to the supply of petroleum, there is a stubborn willingness of some non-OPEC producers to adopt a go-it-alone attitude, with scant regard for the consequences.”……………………………………….Full Article: Source

How Much Longer Can OPEC Hold Out?

Posted on 14 April 2015 by VRS  |  Email |Print

OPEC has been the most talked about international organization among investors, analysts and international political lobbies in the last few months. When OPEC speaks, the world listens in rapt attention as it accounts for nearly 40 % of the world’s total crude output.
With its headquarters in Vienna, Austria, one of the mandates of 12- member OPEC is to “ensure the stabilization of oil markets in order to secure an efficient, economic and regular supply of petroleum to consumers, a steady income to producers, and a fair return on capital for those investing in the petroleum industry.” ……………………………………….Full Article: Source

Dubai/China trading partnerships seen as key to gold market’s growth

Posted on 14 April 2015 by VRS  |  Email |Print

Dubai will play an important role in the flow of gold to China as the latter aims to continually open its domestic markets to the international stage in a bid to become the world’s gold trading hub, sources said this week.
During a panel discussion at the Dubai Precious Metals conference, Song Yuqin, deputy general manager of the Shanghai Gold Exchange, said through a translator that China has “huge potential” for grabbing future gold trading and demand. Alongside Albert Cheng, World Gold Council’s managing director for the Far East, the pair discussed the Chinese government’s “one-belt, one-road” philosophy. Described as a revamped “Silk Road” trade corridor from West to East………………………………………..Full Article: Source

Citigroup Cuts Metals to Iron Forecasts as China Growth Slows

Posted on 14 April 2015 by VRS  |  Email |Print

Citigroup Inc. cut price forecasts for industrial metals and iron ore by as much as 50 percent amid signs Chinese demand is waning as economic growth in the world’s biggest consumer slows. The bank lowered its 2015 nickel forecast by 21 percent and cut its estimate for next year by 15 percent, analysts including Ed Morse wrote in a report e-mailed Monday.
Copper, aluminum, zinc, lead and tin projections for this year and 2016 were also lowered. The bank reduced its iron ore outlook through 2020, with prices seen falling into the $30s, according to the bank………………………………………..Full Article: Source

Saudis struggle to keep its global oil market share

Posted on 13 April 2015 by VRS  |  Email |Print

Saudi Arabia is struggling to maintain its share of the global oil market in a contest that pits the world’s largest crude exporter against traditional allies in the US and Persian Gulf. The Saudi kingdom’s oil exports declined 5.7 per cent in 2014 compared with 2013. Oil shipments to its fastest-expanding customer, China, reached their lowest levels since 2011 in the first two months of 2015, according to the China General Customs Administration.
And its US sales nearly halved in January compared with a year earlier, according to the US Energy Information Administration. China and the US are Saudi Arabia’s biggest importers, with 10 per cent and 8 per cent, respectively, of the kingdom’s production………………………………………..Full Article: Source

What is Next for Gold and Silver Markets?

Posted on 13 April 2015 by VRS  |  Email |Print

Over the last year, precious metals markets have have been one of the most closely watched asset classes in the financial environment as price volatility has reached heightened levels on several occasions. For those looking for evidence that the declines have finished (and that the long-term uptrend has resumed), it will be critical to turn the attention back to the underlying economic data that will determine where sentiment moves in the broader market.
It is always a good idea to keep in mind that gold and silver tend to perform well when the rest of the market looks negative, as investors have historically used precious metals as a way of gaining safe haven exposure and to safeguard against potential rises in inflation………………………………………..Full Article: Source

Saudi oil adviser says too early to say what OPEC will do in June

Posted on 10 April 2015 by VRS  |  Email |Print

It is too soon to say what OPEC will do when it meets to set output policy in June, an adviser to Saudi Arabia’s oil minister said on Thursday.”It is too early,” said Ibrahim al-Muhanna in response to a question at an energy conference in Riyadh.
“Any decision about the outcome will depend in the first place on the ministers themselves. When they meet they will decide,” he said. Top exporter Saudi Arabia was the driving force behind OPEC’s landmark decision, at its last meeting in November, not to cut oil output to support prices, and instead seek to defend market share………………………………………..Full Article: Source

Iran’s Strategic Petroleum Reversal for Oil Markets

Posted on 10 April 2015 by VRS  |  Email |Print

The Strategic Petroleum Reserve is America’s insurance against war with adversaries such as Iran. Now a potential deal between the two countries could end up creating an SPR-sized problem for oil bulls.
If sanctions on Iran are lifted quickly, the extra oil that could find its way to market by the end of 2016 could add up to an amount similar to the SPR’s roughly 691 million barrels. There may yet be no deal with Iran come the end of June. But if there is, and sanctions are lifted, a big tap will open up in the global oil market………………………………………..Full Article: Source

Aluminium drops on oversupply worries; lead and zinc rally

Posted on 10 April 2015 by VRS  |  Email |Print

Aluminium hit a three-week low on Thursday on concerns of oversupply and a cut in Chinese power prices, while lead and zinc hit multi-month highs on further inventory drawdowns. Daily London Metal Exchange (LME) data showed lead stocks MPB-STOCKS fell 725 tonnes to 223,125 tonnes, their lowest level since mid-March, while zinc stocks MZN-STOCKS fell 50 tonnes to 509,925 tonnes, their lowest point in five years.
Zinc and lead are the best performing base metals this year, with supply expected to tighten due to the closure of big mines. “We think (lead) prices should stabilise (near term) and rise by end of year. Lead (demand) is not very dynamic … but supply is probably not going to be as good as expected,” said Eugen Weinberg, an analyst at Commerzbank………………………………………..Full Article: Source

SocGen to Buy Jefferies Bache Clients in Derivatives Push

Posted on 10 April 2015 by VRS  |  Email |Print

Societe Generale SA, France’s second-biggest bank, agreed to take over most of the clients of Jefferies Group LLC’s Bache futures unit amid a push into derivatives. Jefferies, which is owned by Leucadia National Corp., is closing down the rest of the business, according to a statement Thursday from the New York-based firm.
SocGen will review Bache’s staff and may hire some, said a person with knowledge of the matter who asked not to be identified because the terms are confidential. The purchase follows SocGen’s acquisition in January of a financial industrial-metals portfolio from Barclays Plc. ……………………………………….Full Article: Source

Big players bet on commodities recovery

Posted on 09 April 2015 by VRS  |  Email |Print

When there is a slump in commodities or in key economic sectors watch where the big operators move. That will normally give you advance notice of where the recovery will be initiated and gather most momentum.
We are now receiving clear messages from the giants that the recovery from the current commodities slump is likely to start in oil and copper. There is no sign of similar activity in iron ore and coal. Shell is bidding for BG and the giant Chinese state-owned enterprise Guangdong Rising Assets Management (GRAM) is making a second lunge at copper and gold miner PanAust………………………………………..Full Article: Source

Libya seeks cut in OPEC production

Posted on 09 April 2015 by VRS  |  Email |Print

OPEC should change course and cut oil supply by 800,000 barrels per day (bpd) or more to prevent an expected return of Iranian exports from weighing on prices, Libya’s OPEC governor said.
The comments underline how the halving of oil prices from $115 a barrel in June on global oversupply is hurting OPEC’s less wealthy members outside the Gulf and suggests the 12-nation group remains divided over the impact of its 2014 policy shift to defend market share, not prices. “OPEC members, as a unit, need to re-evaluate their strategies,” Samir Kamal, Libya’s OPEC governor and head of planning at the North African country’s oil ministry, said………………………………………..Full Article: Source

Global mining deals to pick up this year

Posted on 09 April 2015 by VRS  |  Email |Print

The number of mining deals worldwide increased in 2014 and this trend is likely to continue this year amid an ongoing commodity price rout that has forced miners to slash capital spending and cut costs, a study released April 8 shows.
According to SNL Metals & Mining’s report, 2014 saw 73 acquisitions that were valued at over US$10 million each, totalling almost $22 billion for the year. The figure, considerably higher than the $12 billion registered in 2013, is nothing to be too excited about, the study hints. The reason? 2014’s total was the third lowest in the past ten years, with only 2013 and 2009 (US$14.88 billion) being more disappointing than last year’s………………………………………..Full Article: Source

Gold supply boom is ending

Posted on 08 April 2015 by VRS  |  Email |Print

The biggest gold bust in three decades is about to end a six-year expansion in mine output. From Russia to South Africa to North America, the biggest producers saw profits turn to losses as prices plunged, forcing them to cut spending on mines in half over three years.
While bullion output will probably reach a record in 2015, the increase will be the smallest in at least six years, before production drops 1 percent in 2016, according to Barclays PLC. Mines supplied 3 114 metric tons last year, an all-time high valued at about $127 billion, after companies stepped up investment to capitalise on prices that surged more than fivefold in the decade through 2011………………………………………..Full Article: Source

Commodities: Avoid or Add?

Posted on 07 April 2015 by VRS  |  Email |Print

If there’s one asset class to which most portfolios lack exposure, it’s probably commodities. It’s also an area whose recent performance has been so ugly, some investors have completely abandoned ship. Over the past five years, broadly diversified commodity ETFs have declined around 30% on average while other asset classes like stocks and bonds have risen. Plunging crude oil and precious metals prices have been a damper. Should advisors avoid commodities?
Research interviewed Cooper Anderson, chief financial officer of GreenHaven, about the outlook for the commodities group and how to get affordable exposure to this volatile but important market………………………………………..Full Article: Source

Big Oil Companies Brace for Weak Quarter After Fall in Prices

Posted on 07 April 2015 by VRS  |  Email |Print

The world’s big oil companies and their investors are bracing for some of the worst quarterly financial results in recent memory as the first three months of the year closed with oil trading at about half of its 2014 peak.
The final quarter of 2014 was bad enough. British giant BP PLC announced its biggest quarterly loss since the Deepwater Horizon spill in the Gulf of Mexico in 2010. Exxon Mobil Corp’s. cash flow fell to its lowest level since the midst of the financial crisis in 2009. The year-end carnage was for a three-month period in which a barrel of oil traded at $77. In the latest quarter, the Brent international oil benchmark averaged $55.13 a barrel………………………………………..Full Article: Source

Goldman Sachs on oil: US needs to cut, not OPEC

Posted on 07 April 2015 by VRS  |  Email |Print

The onus for restoring the oil price back to an equilibrium lies squarely on the shoulders of countries like the U.S. and not on the Organization of the Petroleum Exporting Countries (OPEC), a top Goldman Sachs analyst told CNBC.
Michele Della Vigna, head of European energy research at Goldman Sachs, said non-OPEC oil producers had created the oversupply in the market which has weighed on prices. “I think the market has realized that where we need to find the adjustment is onshore U.S. and that’s where the market is focused,” he told CNBC Thursday………………………………………..Full Article: Source

LBMA admits London gold market can’t be transparent with central banks in it

Posted on 07 April 2015 by VRS  |  Email |Print

Central bank involvement may prevent the London gold market from ever becoming really transparent, the chief executive of the London Bullion Market Association has told a Bank of England study group. The LBMA chief executive, Ruth Crowell, made the assertion in a long statement dated January 30 and sent to the bank’s “Fair and Effective Market Review” committee, which is studying regulation of the currency and commodity markets.
The LBMA statement was found on the bank’s Internet site by gold researcher and GATA consultant Ronan Manly. While Crowell wrote that the LBMA welcomes more transparency in the London gold market, particularly through “post-trade reporting,” she also praised gold lending by central banks for providing “liqudity” to the market, asserting that “it is vital that the role of the liquidity provider is not diminished but in fact strengthened to make sure the markets remain fair and effective.”……………………………………….Full Article: Source

Why oil’s not hitting lows? ‘Phenomenal’ demand

Posted on 02 April 2015 by VRS  |  Email |Print

As concerns about the glut of oil in the world continues to weigh, questions have been raised over why the price of the crucial commodity hasn’t fallen even further. For one analyst, the answer comes down to “phenomenal” demand.
Oil was trading slightly higher Wednesday, with Brent crude around $55.60 a barrel and U.S. West Texas Intermediate at $47.80. Both are some way off their year-to-date lows of around $46 and $42 respectively in March………………………………………..Full Article: Source

How To Reenergize The Hard-Hit Oil And Gas Industry

Posted on 02 April 2015 by VRS  |  Email |Print

Here’s a piece of legislation the Republican Congress should pass pronto: end the decades old, misbegotten ban on the export of crude oil, as well as the stifling bureaucratic restrictions on the export of natural gas. Astounding advances in technology and new discoveries of oil and natural gas reserves have skyrocketed U.S. energy production.
America is drilling and refining more oil than it has in decades. Gas is so abundant that electric utilities can’t build or retrofit plants fast enough to absorb it all. These barriers were put in place to help American businesses and consumers by keeping the stuff at home rather than letting foreigners get their hands on it………………………………………..Full Article: Source

Calling Dr. Copper: Barclays Sees 2015 Rebound

Posted on 02 April 2015 by VRS  |  Email |Print

Is copper the next crude oil? The answer is “no,” according to Suki Cooper, a commodity analyst at Barclays. In a recent note, Copper and her team today laid out case for the metal’s rebound in 2015, forecasting a price of $6,313 per ton for the year.
Because the industrial and consumer sectors make wide use of the metal, investors closely watch movements in the world’s copper price, using it as a barometer of global economic activity. It is often called “Dr. Copper – the metal with a PhD. in economics. At TK, the metal has fallen 9% over the past six months………………………………………..Full Article: Source

Goldman Sachs leads banks on commodities revenue

Posted on 02 April 2015 by VRS  |  Email |Print

Goldman Sachs now leads global banks in commodity trading revenues, overtaking JP Morgan in 2014. A report by Coalition, a financial analytics company, found that while rival banks backed out of the commodity business due to volatility and an increasingly restrictive regulatory environment, Goldman Sachs’ decision to remain in the game has reaped dividend.
Collectively, banks enjoyed a 9% increase in commodity revenue in 2014, despite the chronically low prices of some key commodities. Total revenue was US$4.9bn in 2014 and while it was the first upward tick since 2011, it still represents a fraction of the combined US$14.1bn banks were taking in before the crisis in 2008………………………………………..Full Article: Source

Time for commodities to outperform equities: Jodie Gunzberg

Posted on 01 April 2015 by VRS  |  Email |Print

21 of 24 commodities lost in FY15 with the flagship indices, S&P GSCI and Dow Jones Commodity Index (DJCI), losing 39.5 per cent and 25.9 per cent, respectively. In the past quarter, six commodities are positive: silver, cotton, gasoil, unleaded gasoline, gold, and feeder cattle. In the past month, one-third of commodities are in backwardation, measuring shortages that could be supportive for silver, copper, live cattle, feeder cattle, Kansas wheat, unleaded gasoline, heating oil and gasoil.
This highlights the positive impact of falling oil prices on the petroleum commodities that use crude oil as an input. Each commodity has its own supply and demand model so is impacted by different factors from weather to geopolitical risk. Rising interest rates, Chinese demand from stockpiling, and the possibility of rising oil prices may support commodities this year………………………………………..Full Article: Source

Oil Prices Slide on Expectations of Iran Deal

Posted on 01 April 2015 by VRS  |  Email |Print

Oil prices fell Tuesday as a deal on Iran’s nuclear program appeared more likely, raising the chances of increased Iranian crude-oil exports. Tuesday was the deadline for Iran and six other nations to outline the main elements of a deal constraining Iran’s nuclear program in exchange for lifting international sanctions. The U.S. State Department said the parties made enough progress to merit staying at the talks until Wednesday. The deadline for a final agreement is the end of June.
Iran, which has 10% of the world’s crude-oil reserves, has seen its production and export capacity sharply curtailed by sanctions. Its crude exports dropped from 2.5 million barrels a day in 2011 to 1.1 million barrels a day in 2013, according to the U.S. Energy Information Administration………………………………………..Full Article: Source

Expect oil to tumble if Iran deal gets done

Posted on 01 April 2015 by VRS  |  Email |Print

An unlikely location for oil markets, to be sure, but that is where U.S. Secretary of State John Kerry is meeting with Iran’s Mohammad Javad Zarif for intense negotiations over Iran’s nuclear program. The so-called P5+1 countries and Iran hope to come to an 11th hour agreement that could pave the way for a historic thaw in relations. The deadline for a deal is the end of the month, or Tuesday night.
Although nuclear weapons proliferation is the headline item, one of the most significant side effects of the negotiations will be their effect on the price of oil. Iran, as a member of OPEC and a major oil producer on the world stage, still has substantial influence on oil markets………………………………………..Full Article: Source

Metals Focus: 2015 could be end of gold bear cycle

Posted on 01 April 2015 by VRS  |  Email |Print

Look for continued weakness in the short term, with the price maybe bottoming out $100 per ounce below where it is today, says Metals Focus in its inaugural Gold Focus report.The seers naturally trot out Asian demand as helping to save they day, but more interestingly suggest 2015 as the year the tremendous growth in supply over the past two decades comes to an end.
Further, producer hedging - selling future supply today - is expected to remain flat at levels far lower than seen a few years back.As for rate the start of U.S. rate hikes - widely anticipated and hurting gold’s price at least in dollar terms - it could be a sell the rumor, buy the news moment for the yellow metal as punters realized the pace of hikes will be slow, with real rates remaining negative for years to come………………………………………..Full Article: Source

Commodity investors are bailing at the fastest pace on record

Posted on 31 March 2015 by VRS  |  Email |Print

Investors are bailing out of commodity funds at the fastest pace on record, and the exodus shows no signs of ending. U.S. exchange-traded funds linked to broad baskets of raw materials saw a net outflow of $919 million over the first three months of the year, the most of any quarter since the securities were created in 2006, data compiled by Bloomberg show.
Bank of America Corp. says ample supplies have unleashed price wars, and Goldman Sachs Group Inc. predicts a 20% drop for commodities already near a 13-year low. Morgan Stanley and Societe Generale SA also have cut forecasts for a whole range of items. Rising supplies created bear markets over the past year as drillers unlocked more oil and natural gas, copper mines expanded and farmers harvested record corn and soybean crops………………………………………..Full Article: Source

US battles Opec as oil output growth beats 100 year record

Posted on 31 March 2015 by VRS  |  Email |Print

American drillers increased oil production at the highest rate in a Century in 2014 despite falling prices . Opec’s efforts to slow down the pace of growth of America’s oil industry last year have failed, according to new data which revealed that drillers in the US increased production at the highest rate in more than 100 years.
The US government’s Energy Information Administration (EIA) has said that output increased by 1.2m barrels per day (bpd) last year to reach 8.7m bpd. This is the largest single increase since records began in the early 1900s………………………………………..Full Article: Source

How the conflict in Yemen is impacting the oil market

Posted on 31 March 2015 by VRS  |  Email |Print

The worsening conflict in Yemen – which pits rival internal groups backed by Iran against those backed by a Saudi Arabia-led coalition of countries – brings to the fore again the potential such regional flash points have to disrupt world oil trade.
Even before the coalition, which includes the UAE, took direct military action midweek, bombing Iranian-backed Houthi rebel positions, the risks of Yemen’s civil war spreading had been filtering through to the oil market. World benchmark North Sea Brent crude oil had one of its strongest gains this year, rising by more than 7 per cent last Wednesday and Thursday, to US$59.19, before bearish sentiment reasserted itself and Brent plunged $2.78 on Friday to end at $56.41………………………………………..Full Article: Source

Goldman slaps JPMorgan in commodities as rivals retreat

Posted on 30 March 2015 by VRS  |  Email |Print

Goldman Sachs earned back its place as the largest bank by commodities revenue as competitors including JPMorgan Chase scaled down or abandoned the raw materials business. JPMorgan, which made the most money from commodities among the top 10 investment banks in 2013, ranked second last year and Morgan Stanley was third, according to a report published Friday from Coalition, a London-based business analytics firm.
JPMorgan sold part of its physical commodities business to trading house Mercuria Energy Group last year, while Barclays, Deutsche Bank and Credit Suisse retreated amid regulatory scrutiny and pressure from lawmakers. The Bloomberg Commodity Index of 22 raw materials slumped 17 per cent in 2014, a fourth annual drop, as energy prices plunged………………………………………..Full Article: Source

Silver’s outperformance versus gold set to continue suggests economist

Posted on 30 March 2015 by VRS  |  Email |Print

Gold eased back after a strong run that had seen the spot price rise for seven straight days. Uncertainty over the situation in Yemen, Greece and a rare bout of the wobbles for the dollar spurred the rise, but some profit taking saw spot gold ease US$5 to just under US$1,200.
Even so, it was a good week for the metal, but even more so for near neighbour silver. It has risen by 8% in dollar terms in 2015 to date, whereas gold is up barely 1% said Capital Economics. Julian Jessop, Head of Commodities Research, said silver normally does better when prices of both metals are rising, but this time it has also proved more resilient in bouts of weakness………………………………………..Full Article: Source

Global economic development: Unsustainable goals

Posted on 27 March 2015 by VRS  |  Email |Print

Mary Robinson, a former president of Ireland, calls 2015 “the Bretton Woods moment for our generation”. In 1944 the small town in New Hampshire of that name hosted a conference which was to shape the post-war economic order. The open trading rules it established laid the foundation for decades of post-war growth and the “Bretton Woods twins” that it founded, the IMF and World Bank, still influence global financial governance.
Four UN conferences comprise the new Bretton Woods. Though they are unlikely to produce institutions that will matter in 50 years, if they go well they could boost growth and development in poor countries. If they do not, the only outcome will be windy and pointless political rhetoric………………………………………..Full Article: Source

Oil market’s small fry become big fish

Posted on 27 March 2015 by VRS  |  Email |Print

Like the old cartoon showing a school of small fish organised to form a big one, retail investors have become a whale in the oil market. Uniting as buyers of exchange traded funds, these investors held 180m barrels equivalent of West Texas Intermediate crude futures last week — 30 per cent of the most active futures market.
The resurfacing of oil ETFs is a sign some investors are again warming to commodities as an asset class after years of poor performance. But analysts and some fund managers warn that the fat returns of the previous decade are over and the “supercycle”, the long period of tightness in markets from oil to copper that drove these returns, has rumbled to a halt………………………………………..Full Article: Source

Copper rebounds as Chile closes mines

Posted on 27 March 2015 by VRS  |  Email |Print

Copper rebounded as torrential rain in Chile closed some of the biggest mines in the world’s largest producer of the metal. Copper rose as much as 0.5 percent after snapping the longest rally in six weeks on Wednesday. Some of the world’s largest copper mines were forced to shut down as torrential rain in the Atacama Desert of northern Chile closed roads and flooded towns.
Codelco, the world’s biggest copper producer, shut all of its Atacama mines including Chuquicamata and Radomiro Tomic, according to the state-owned company. “Copper supply expectations have been revised again after news that rains in Chile forced mines shut,” said Fang Junfeng, an analyst at Shanghai Cifco Futures Company. “The market is entering a peak consumption season in the northern hemisphere.”……………………………………….Full Article: Source

Commodities: Come Together

Posted on 26 March 2015 by VRS  |  Email |Print

Cartels have been making a comeback—if in word rather than deed. On Wednesday, Australia’s competition regulator said it had called on Andrew Forrest, chairman of Fortescue Metals, to explain comments he made at a dinner reportedly saying iron-ore miners should cap production to support sagging prices. Fortescue says Mr. Forrest was merely highlighting the damage being done to shareholders, Australia, and consumers by the iron-ore industry’s “last-man-standing fight for market share.”
Consumers, at least, rarely suffer from low prices. Regardless, Mr. Forrest’s words reflect the desperation of a company and industry that, as usual in commodity cycles, invested enormously to boost supply in good times only to suffer as demand failed to match expectations. Fortescue last week pulled a $2.5 billion bond offering, the single biggest withdrawn deal since the financial crisis, according to S&P Capital IQ LCD………………………………………..Full Article: Source

Commodities set to be a focus in 2015

Posted on 26 March 2015 by VRS  |  Email |Print

ETF Securities, one of the world’s leading, independent providers of Exchange Traded Products (ETPs), conducted a poll at their Annual Investment Conferences which showed that commodities are one of investors’ top picks for 2015, along with developed market equities. The poll also indicated that investors use ETPs for a number of different strategies, although tactical approaches proved to be the preferred method.
The results were compiled from a poll of 446 investment professionals conducted during the ETF Securities Annual Investment conferences which took place in Frankfurt, London, Paris, Milan and Zurich during January and February. The conferences focused on the broad macroeconomic outlook, commodities and foreign exchange………………………………………..Full Article: Source

Oil production growth means no quick price fix

Posted on 26 March 2015 by VRS  |  Email |Print

Oil prices were in recovery Wednesday after a three-week slide that took West Texas Intermediate crude to a six-year low last week. But a new report today warns that oil prices are unlikely to bounce back as quickly as they did in 2009, when they plunged to $33 US a barrel but recovered within three years.
That’s because both Canada and the U.S. continue to produce more oil in the face of a global glut in crude production. WTI was trading up $1.46 at $48.97 a barrel on Wednesday. That’s down 7.6 per cent since the beginning of the year and less than half the $107 it hit last June. But the price bounce defies news from the U.S. Energy Information Administration today that crude inventories rose by 8.2 million barrels last week, setting an 80-year high………………………………………..Full Article: Source

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