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Why China is the oil ‘wild card’ that could overrule any OPEC moves

Posted on 30 September 2016 by VRS  |  Email |Print

OPEC may now have come around to the idea of capping output, but any efforts by the cartel to boost oil prices longer-term could easily be quashed by an unexpected player in the energy market: China.
Taking advantage of the slump in oil prices, the country has in recent years aggressively accelerated its buildup of strategic petroleum reserves, giving it a strong tool to cap a rally in oil prices, energy experts said………………………………………Full Article: Source

OPEC oil deal is not really a deal, it’s more of an ‘agreement to agree’

Posted on 30 September 2016 by VRS  |  Email |Print

The Organization of the Petroleum Exporting Countries agreed to curb production for the first time since 2008 on Wednesday, but just a day later, energy market analysts are questioning the meaning of the deal.
OPEC minted a preliminary plan to cut production to as little as 32.5 million barrels a day, from about 33.2 million barrels in August, sources told Reuters. But output quotas for each of the cartel’s 14 members would be left undecided until its annual meeting Nov. 30………………………………………Full Article: Source

OPEC proved it still matters by ending the market-share battle

Posted on 30 September 2016 by VRS  |  Email |Print

Proving pundits wrong and overcoming skepticism, two days of round-the-clock deliberations in Algiers brought about a landmark agreement in which the Organization of Petroleum Exporting Countries agreed to slash output. The decision marks the end of the battle for market share.
“This is the end of the ‘production war’ – OPEC claims victory,” Phil Flynn, analyst at Chicago-based brokerage Price Futures Group, told Reuters. “The cartel proved that it still matters, even in the age of shale.”……………………………………..Full Article: Source

Gold demand likely to fall to 750 ton in 2016 on high price

Posted on 30 September 2016 by VRS  |  Email |Print

India’s gold demand is likely to fall to around 750-800 tonnes in 2016, as against 860 tonnes last year, mainly due to sharp rise in prices and jewellers’ strike following new regulations, World Gold Council has said.
“In the first half of this year, gold demand fell to 248 tonnes. We think that demand will be better in the second half on the back of good monsoon,” WGC India MD Somasundaram PR said. He pegged the gold demand at 750-800 tonnes for the 2016 calendar year………………………………………Full Article: Source

IMF warns against protectionist tendencies in global economy

Posted on 29 September 2016 by VRS  |  Email |Print

International Monetary Fund, or IMF, managing director Christine Lagarde said Wednesday that efforts should be made to turn back rising protectionist tendencies in the global economy. Lagarde spoke at a conference in Chicago a week ahead of the annual IMF-World Bank assembly.
The IMF managing director’s statements come as both major U.S. presidential candidates - Democrat Hillary Clinton and Republican Donald Trump - have become increasingly critical of free trade agreements on the campaign trail……………………………………Full Article: Source

Why commodity-linked sukuks should be introduced?

Posted on 29 September 2016 by VRS  |  Email |Print

A sukuk is a sharia-based hybrid instrument that can have the features of both a conventional debt instrument and of equity. An example of equity is the stock of an enterprise. The stock’s value depends on the performance of the company and can be held in perpetuity; the stocks are neither paid (pre-fixed) dividends at set future times nor are they guaranteed capital appreciation.
The stock-holders share in the risk of the enterprise, and both the return and timing of the return on their investment depend on the performance of the enterprise. In contrast to a stock, a conventional bond is a debt instrument; it has a fixed duration, with the principal usually paid at maturity. Coupons of a prefixed amount are paid at set future times. …………………………………..Full Article: Source

Oil market to recover in late 2017

Posted on 29 September 2016 by VRS  |  Email |Print

The oil market has balanced out in 2016 and will restore in late 2017, Russian Energy Minister Alexander Novak said. “The market follows the path of balance anyway,” the minister said in an interview with Russia 24 TV channel. “The year 2016 has already balanced out the market partially, and I think that the market will recover in late 2017,” he added.
The International Energy Forum takes place in Algiers on 26-28 September, RIA Novosti reports. An informal meeting of OPEC members is said to take place within the framework of the forum……………………………………Full Article: Source

Opec agrees on oil output cut at Algiers meeting

Posted on 29 September 2016 by VRS  |  Email |Print

Crude prices climb more than 6% as cartel ministers reach consensus on production curbs. Some of the world’s biggest oil producers have agreed to cut production for the first time in eight years, sending crude prices higher by more than 6 per cent.
After more than four hours of talks in Algeria on Wednesday Opec committed itself to reducing output to between 32.5m barrels a day and 33m b/d, according to ministers. The agreement surprised oil traders who thought a consensus would be difficult to reach because of divisions between Saudi Arabia and Iran, two of Opec’s largest and most influential members……………………………………Full Article: Source

OPEC States Understand Measures Needed to Stabilize Oil Market - Qatar Minister

Posted on 29 September 2016 by VRS  |  Email |Print

According to the Qatari energy and industry minister, OPEC member states have a mutual understanding on measures that need to be taken for the stabilization of the oil market. The Organization of the Petroleum Exporting Countries (OPEC) member states have a mutual understanding on measures that need to be taken for the stabilization of the oil market and reduction of crude price volatility, Qatari Energy and Industry Minister Mohammed Saleh Abdulla Sada said Wednesday.
“There is a common understanding that we need to look at market stabilization measures at reducing the length of the down tier and reducing the volatility,” the minister said during an informal meeting of OPEC on oil output freeze……………………………………Full Article: Source

Vitol CEO says does not see tighter oil market before 2018

Posted on 29 September 2016 by VRS  |  Email |Print

The chief executive of Vitol, the world’s largest oil trader, said on Wednesday he did not see the global oil market tightening before 2018. He also expressed scepticism over the significance of a potential OPEC deal on freezing production.
“If you freeze production at a level that is clearly above demand … is that bullish?” Ian Taylor asked a Bloomberg conference in London. Investors were closely watching an OPEC meeting in Algiers this week anticipating that the cartel would finally agree a plan to tackle a global crude surplus that sent oil prices tumbling in 2014. But so far, the talks have remained just that……………………………………Full Article: Source

How Gold Came to South Korea’s Rescue

Posted on 29 September 2016 by VRS  |  Email |Print

Nineteen years ago, South Korea came precipitously close to bankruptcy. The Asian financial crisis had spread like a virus. Thailand, Malaysia, Singapore and other Southeast Asian countries were all affected, inciting fears of a global economic meltdown if the crisis couldn’t be contained.
Before 1997, South Korea had been held up as a textbook example of economic reversal and resilience. Once a poor Japanese colony, the country underwent an unbelievably rapid transformation in the second half of the 20th century, propelled by smart policy reforms and heavy investment in education. Many called it the “Miracle on the Han River.”…………………………………..Full Article: Source

Whom is gold voting for? A market puzzle

Posted on 29 September 2016 by VRS  |  Email |Print

If Donald Trump manages to win the presidential election, will that be good or bad for gold? This proves to be an interestingly controversial issue, which goes to the multifaceted nature of the precious metal as an investment.
Some market participants say that a surprise Trump victory will cause considerable market anxiety, leading safe havens like gold to surge. Others say that Trump’s antipathy for stimulative monetary policies will mean more rate hikes down the line, spiking the dollar and consequently hurting gold prices……………………………………Full Article: Source

Here’s what a Trump presidency will mean for commodity prices, according to the CBA

Posted on 28 September 2016 by VRS  |  Email |Print

If it wasn’t already, interest in the US presidential race is about to go up a notch. Today’s presidential debate between Democrat Hillary Clinton and Republican Donald Trump, arriving at 11am on the east coast of Australia, is seen by many as an event that could either slam the door shut on a Trump presidency, reversing his recent ascendancy in the polls, or blow the race to the White House wide open.
While the outcome of the November 8 poll will not be known for six weeks, analysts around the world have been hypothesising over what a Trump presidency — currently seen as around a 35% probability — will mean for financial markets……………………………………Full Article: Source

OPEC freeze not likely, but Nigerian oil minister says ‘honesty’ is real progress

Posted on 28 September 2016 by VRS  |  Email |Print

A freeze in production by OPEC members would not include Nigeria, according to the country’s oil minister, who said the real progress at the oil cartel’s meeting in Algeria had been honesty.
Nigeria has seen crude oil production disruptions this year concentrated in its Niger Delta region and Oil Minister Emmanuel Ibe Kachikwu said that it lost an average of 500 to 700 barrels per day in output. He said that OPEC members would understand that Nigeria had to be exempt from any production cut or freeze that the group decides upon……………………………………Full Article: Source

Iran rejects Saudi offer to cap oil output ahead of Opec meeting

Posted on 28 September 2016 by VRS  |  Email |Print

Tehran wants 13% of oil cartel’s production before any agreement to curb production. Iran has dealt a severe blow to Saudi-led efforts to curb oil production and reverse the two-year-old downturn in crude prices by rejecting an offer from Riyadh to cap output, sending Brent down more than 3.5 per cent.
Speaking before Wednesday’s closely watched oil producers’ meeting, Bijan Namdar Zanganeh, Tehran’s energy minister, said his country was not willing to freeze output until it had regained more than 4m barrels a day of production, heightening tension between two of the region’s most powerful petroleum producers……………………………………Full Article: Source

Gold Mining ‘Needs New Discoveries’ as M&A Rejected on Bad Memories, 2016 Price Jump

Posted on 28 September 2016 by VRS  |  Email |Print

Gold prices in China – the world’s No.1 gold mining, importing and consumer market – held firm overnight, fixing at the Shanghai Gold Exchange little changed from before the weekend, but edging down to a $2.85 per ounce premium above comparable Dollar quotes for metal settled in London.
“To keep the gold industry supplied we need to discover 90 million ounces a year,” said gold mining CEO Mark Bristow of Randgold Resources to journalists in Johannesberg yesterday, ” [but] we are only discovering 10 million to 15 million ounces a year. “We either have to discover more quality ounces or reduce the life of mines.”…………………………………..Full Article: Source

Can the Rally in Silver Continue?

Posted on 28 September 2016 by VRS  |  Email |Print

Commodities like gold and silver have surged this year, thanks to geopolitical uncertainty like “Brexit,” the Federal Reserve’s reluctance to raise its main interest rate and foreign buyers. But with the price of silver up nearly 40% year-to-date, investors are wondering whether it can continue. Experts say it may have more room to run, particularly as global interest rates continue to stay negative.
“I think there are several driving forces, but the rampant rise in the amount of negative interest rate sovereign debt around the world is a major factor,” said Andrew Chanin, CEO of Pure Funds, of the rise in silver……………………………………Full Article: Source

Japanese diecast aluminum market weighed down by excess supply

Posted on 28 September 2016 by VRS  |  Email |Print

Japanese diecast aluminum alloy prices were capped despite the strong yen encouraging imports, because of excess domestic supply, market sources said. Import trades picked up this week on the stronger yen at Yen 100.50-100.70 to a dollar compared with Yen 101-102 last week.
One Japanese trader had concluded deals at $1,685-$1,720/mt CIF Japan, for 200-500 mt lots of Chinese ADC12 for November loading, saying that the stronger yen allowed deals in a wider range above $1,700/mt CIF Japan……………………………………Full Article: Source

Commodities, Fines and Steak

Posted on 27 September 2016 by VRS  |  Email |Print

As far as I know there are no capital requirements for trading oil. Planet Money bought and sold some oil this year, and they are a public radio show. Bloomberg’s Tracy Alloway bought some last year and sold it to Izabella Kaminska, who then defaulted on the trade.
If you wanted to get into the oil business and borrowed $45 from your mom to buy your first barrel, that would be fine. There are of course lots of environmental regulations, and you’d probably need insurance to drill it up or move it around, but the basic capital structure of the oil industry - how much of the money comes from shareholders and how much is borrowed - is a private decision, a matter for negotiation between companies and investors and banks……………………………………..Full Article: Source

How to Invest in the Commodities Turnaround

Posted on 27 September 2016 by VRS  |  Email |Print

It’s been a rough couple of years for the commodities group. Investors nearly abandoned most of the sector during this time, leaving energy and fertilizer stocks in the dust. But in 2016, there was some relief. Gold has rebounded and is up 20% year-to-date. Oil hit lows in February but has bounced off that level and hasn’t re-visited it.
Fertilizer prices, however, continue to struggle but analysts see a turnaround coming in 2017. Is this the time to get into the commodities as a play on the turnaround? It’s a risky proposition. Commodities are still clearly out of favor……………………………………..Full Article: Source

No OPEC deal expected, though it would have had impact: CNBC Oil Survey

Posted on 27 September 2016 by VRS  |  Email |Print

OPEC producers could have a significant impact on oil prices if they agree to a production freeze, but it’s unlikely they’ll get it done at this week’s meeting in Algiers, according to a new CNBC Oil Survey.
Sixty-five percent of the survey respondents said no agreement is likely, while 52 percent said if producers could strike a deal, there would be a meaningful effect on crude prices. That may be because little more than half of the participants also said they believe the rebalancing of oil supply and demand is occurring more slowly than they had expected……………………………………..Full Article: Source

Iran Plays Down Prospects of OPEC Production Deal

Posted on 27 September 2016 by VRS  |  Email |Print

Iranian officials played down expectations for an oil-production deal, calling an OPEC gathering here this week “consultative,” and renewed their vow to pump output higher.
Iran Oil Minister Bijan Zanganeh’s comments to Iranian state media came as energy ministers from across the world arrived in Algiers for a three-day conference that is set to culminate Wednesday in an informal gathering of the Organization of the Petroleum Exporting Countries. The 14-nation cartel is considering output limits, known as a production freeze, that some members hope would lift oil prices out of a two-year funk……………………………………..Full Article: Source

Oil market investment needed soon to balance market: Schlumberger CEO

Posted on 27 September 2016 by VRS  |  Email |Print

Investment in exploration and production will have to start increasing soon to help balance the global oil market, Schlumberger CEO Paal Kibsgaard said.
The medium- to long-term oil environment will remain subject to periods of volatility and the industry may see fewer and larger service operators in the future, the oilfield services company boss said……………………………………..Full Article: Source

No sign of oil freeze at home as Russia meets OPEC

Posted on 27 September 2016 by VRS  |  Email |Print

As Russian energy minister Alexander Novak flies to Algeria this week for talks with OPEC on output cuts, developments at home indicate non-OPEC Russia is not preparing for any coordinated production action.
Five leading Russian oil companies, responsible for three quarters of output in the world’s largest producer, all say they will be boosting output next year after reaching record levels in recent months. No doubt, all these companies would obey if President Vladimir Putin ordered them to curtail production……………………………………..Full Article: Source

Citi Sees $1,320/Oz Gold In 4Q, Resilient Indian Demand In Coming Years

Posted on 27 September 2016 by VRS  |  Email |Print

Citi Research sees gold easing slightly in the fourth quarter to an average of $1,320 an ounce as the Federal Open Market Committee hikes U.S. interest rates for the first time in a year. Meanwhile, in a special section of the bank’s quarterly commodity forecast released overnight, Citi said Indian demand for gold and certain other commodities – such as crude oil and power — is likely to be helped by rising incomes during the next half of a decade.
Financial markets do not expect the central bank to act in November, to avoid influencing the U.S. presidential election, and is split on the chances for a rate hike in December…………………………………….Full Article: Source

Gold Will Likely Soar To A Record

Posted on 27 September 2016 by VRS  |  Email |Print

“Gold will likely soar to a record within five years as asset bubbles burst in everything from bonds to credit and equities, forcing investors to find a haven”, reported Bloomberg last week, quoting Old Mutual Global Investors’ Diego Parrilla.
The metal is at the start of a multi-year bull run with a “few thousand dollars of upside” in a world of “monetary policy without limits” where central banks print lots of money and low or negative interest rates prevail, said Parrilla, who joined the firm as managing director of commodities last month. He’s worked at Goldman Sachs Group Inc. and Bank of America Merrill Lynch……………………………………..Full Article: Source

Zinc Price Forecast, September 2016: Metal in Deficit

Posted on 27 September 2016 by VRS  |  Email |Print

A recent report from the International Lead and Zinc Study Group found the global market for refined zinc was in deficit from January to July, with total reported inventories declining over the same time frame.
Global zinc mine production declined 6.1% during the same period, which mostly was due to substantial reductions in India, Australia, Ireland and Peru. Meanwhile, world refined zinc metal output fell 3.9% due to a significant drop off in Indian production and a decline in the U.S……………………………………..Full Article: Source

Is Investor Appetite for Commodities Picking Up? (Video)

Posted on 26 September 2016 by VRS  |  Email |Print

Tim Evans, Long Leaf Trading Group’s founder and chief market strategist, discusses the outlook for gold and oil prices with Bloomberg’s David Gura and Vonnie Quinn on “Bloomberg Markets.”.………………………………….Full Article: Source

Commodity market is not for investors

Posted on 26 September 2016 by VRS  |  Email |Print

It is a place where users can hedge to mitigate the risk in the physical market. Commodity exchanges are witnessing a lot of action since SEBI took charge. With the trading and other processes getting streamlined, these could be an alternate asset class that investors could consider in the future.
From my perspective, the commodity market is not for investors. It is a place where users such as farmers, importers, exporters, traders or companies can hedge to mitigate the risk that they face in the physical market. As far as investment in commodity market is concerned, yes, anyone can invest in commodity futures as the government does not state explicitly that you cannot trade in commodity futures without an exposure to the physical commodity……………………………………Full Article: Source

Oil market’s expectations low for Opec production deal

Posted on 26 September 2016 by VRS  |  Email |Print

Saudi Arabia has set out its terms to join the first co-ordinated Opec production cut since the financial crisis. The only problem for an oversupplied oil market is few think it will be achieved. As the world’s largest oil producers descend on Algeria this week for crunch talks on ending a two-year old supply glut, Opec’s biggest members remain far apart.
Several Opec delegates have sought to manage expectations saying the meeting would be informal and would only lay the groundwork for the next official Opec meeting in November, or perhaps a follow-up gathering next month……………………………………Full Article: Source

Saudis Willing to Act on ‘Critical’ Oil Market, Algeria Says

Posted on 26 September 2016 by VRS  |  Email |Print

Saudi Arabia, the world’s biggest oil exporter, has offered to cut its output to January levels, Algeria’s energy minister said as he prepared to host a meeting of OPEC producers later this week.
Prices rebounded Monday after tumbling 3.7 percent on Friday as Saudi Arabia signaled that the Algiers meeting will be consultative and unlikely to reach a firm decision. While Noureddine Boutarfa’s comments don’t change that, they suggest OPEC’s leading member may still be willing to work toward the group’s first production curbs since the organization let members produce at will in late 2014, causing prices to plunge……………………………………Full Article: Source

World Oil Market May Re-Balance in Late 2017 - Russian Energy Minister

Posted on 26 September 2016 by VRS  |  Email |Print

The comment comes ahead of an expected informal Organization of the Petroleum Exporting Countries (OPEC) meeting with non-OPEC oil producing countries on the sidelines of the International Energy Forum (IEF) on September 26-28 in Algeria.
“Everything will depend on demand, supply and on the economic situation in oil consuming countries. All of this must be analyzed. I predict that next year should already see restored demand…I think we will see a balance between demand and supply in the second half of the year…maybe even due to market forces [alone],” Novak told reporters……………………………………Full Article: Source

Citi Warns on Gold as Bank Boosts Odds of Trump Win to 40%

Posted on 26 September 2016 by VRS  |  Email |Print

Gold may be in for a bumpy ride in the final quarter as Republican candidate Donald Trump now has a 40 percent chance of winning the presidential election and investors will be preparing for the possibility of higher U.S. interest rates, according to Citigroup Inc.
Volatility in bullion and foreign-exchange markets may increase, according to a commodities report from the bank as it raised the odds on a Trump victory over Democrat Hillary Clinton in November from 35 percent. There would probably be a single U.S. hike by year-end, it said……………………………………Full Article: Source

Nickel falls as Citi sees Philippines audit ‘underwhelming’

Posted on 26 September 2016 by VRS  |  Email |Print

Nickel led metals lower, retreating from its biggest weekly gain in almost three months, after Citigroup Inc said it expects fourth-quarter price declines and an “underwhelming” impact from the Philippines’ mines audit due to be released this week.
The metal used in stainless steel dropped as much as 1.4 per cent to US$10,510 a metric ton on the London Metal Exchange before trading at US$10,540 as of 10:58am in Shanghai. It surged 9.6 per cent last week, the most since July 1. On the Shanghai Futures Exchange, it fell 0.9 per cent……………………………………Full Article: Source

Chinese commodity demand still has ‘legs to run’

Posted on 23 September 2016 by VRS  |  Email |Print

To the surprise of many, 2016 has turned out to be a good year for commodity prices, recovering strongly from the lows seen earlier in the year. It’s been such a dramatic turnaround, coming after years of sliding prices, that analysts at Macquarie Wealth Management dubbed the recovery as a “mini-renaissance” for the sector in a research note released earlier this week.
Much of it has been due to the actions of Chinese policymakers who, faced with slowing economic growth, rolled out a swathe of new infrastructure spending to help bolster economic activity. Well, it’s not just global commodity suppliers that have benefited from this decision………………………………………Full Article: Source

What Happens to Energy Investments if Oil Prices Don’t Recover?

Posted on 23 September 2016 by VRS  |  Email |Print

A rebound in crude oil prices lifted energy investments this year, with names of super-major oil producers like Exxon Mobil Corp. and Chevron Corp. (CVX) sporting double-digit gains so far in 2016 after sharp losses in 2015.
That also goes for the iShares iBoxx $ High Yield Corporate Bond exchange-traded fund (HYG), which many crude-oil market watchers use as a proxy for energy-debt investments since many energy companies operating in the shale-oil boom areas used high-yield debt for funding………………………………………Full Article: Source

Iraq OPEC governor says market circumstances right for global oil deal

Posted on 23 September 2016 by VRS  |  Email |Print

Iraq’s OPEC governor Falah Alamri said on Thursday that oil market circumstances are now more favorable for OPEC and other oil producers to reach a deal to support the market when they meet next week in Algeria.
“This time I think a little bit different (than in Doha) because circumstances are little bit better, helping (producers) to reach a deal,” Alamri said, when asked about the prospect of a global oil production pact in Algeria. OPEC and non-OPEC producers are expected to revive a production freeze deal when they meet in Algeria on Sept. 26-28 after a similar initiative collaped in Doha in April because Iran refused to restrict its supplies………………………………………Full Article: Source

Is OPEC All Talk?

Posted on 23 September 2016 by VRS  |  Email |Print

Global oil market still moves on cartel’s communication, but fewer oil traders and analysts take it seriously. A now-familiar pattern ensued Monday after Venezuelan President Nicolás Maduro said the world’s big oil producers were close to clinching an output deal—oil prices rose more than 1% early that day, and then quickly fell, posting losses by Tuesday.
It was among the most recent in a series of optimistic assessments about a potential deal by members of the Organization of the Petroleum Exporting Countries. But oil traders and analysts increasingly see the statements as an OPEC ploy to prop up prices short term………………………………………Full Article: Source

Russian Energy Minister Says Hopes for Constructive OPEC Dialogue in Algeria

Posted on 23 September 2016 by VRS  |  Email |Print

The Russian Energy Ministry is hoping for a constructive dialogue within the framework of the member states of the Organization of the Petroleum Exporting Countries (OPEC) in Algeria, Russia is ready to coordinate its actions with other oil producers in order to coordinate their actions on the market, Energy Minister Alexander Novak said Thursday.
OPEC member states are expected to renew talks on a possible oil output freeze with non-member states at the September 26-28 International Energy Forum (IEF) in Algiers, Algeria………………………………………Full Article: Source

Russia Targets China for Gold Sales as VTB, Sberbank Expand

Posted on 23 September 2016 by VRS  |  Email |Print

Russia’s gold sales in China are set to expand as VTB Capital boosts sales and Sberbank PJSC prepares to enter the market, chasing demand in the world’s biggest consumer of bullion.
Sberbank CIB plans to register on the Shanghai Gold Exchange and eventually to sell up to 100 tons (3.2 million ounces) a year, according to an e-mail from the investment arm of Russia’s largest bank. VTB Capital, a unit of the second-biggest lender, is targeting sales of as much as 20 metric tons of gold in China in 2017, Sergey Nenashev, the bank’s head of precious metals, said by e-mail. Sales may reach a rate of 100 tons a year near the end of 2018, he said………………………………………Full Article: Source

Commodity bulls dare to exude optimism

Posted on 22 September 2016 by VRS  |  Email |Print

After five lean years some investors sense a turning point for the sector. After five years of consecutive declines, has the commodities market finally bottomed? With a leading index up 7 per cent from the start of the year and a jump in investment flows into the market, some investors are daring to be optimistic although others remain resolutely on the sidelines.
“We think that this is a turning point in investment flows in commodities,” says Kevin Norrish, head of commodity research at Barclays. According to the bank’s latest research, commodities saw investment inflows of $54bn between January and August, an all-time high for the first eight months of the year. If the current trend continues, 2016 will mark the first year of net inflows into commodities for the first time in four years…………………………………….Full Article: Source

OPEC Oil Freeze? Investors Beware

Posted on 22 September 2016 by VRS  |  Email |Print

Algeria’s new energy minister, Noureddine Bouterfa, confidently said on Monday that if next week’s talks at the International Energy Forum in his native Algeria go well, then a follow up OPEC meeting could be scheduled before November 4 to head toward a freeze. He also believes a freeze could balance the oil market for at least 6 months.
On Tuesday, Bouterfa went even further and suggested that the informal OPEC meeting planned for September 28 may turn into a formal meeting at which he will suggest that OPEC producers cut crude oil supplies by one million barrels a day…………………………………….Full Article: Source

McKinsey Energy Insights: Oil market glut will extend into 2017

Posted on 22 September 2016 by VRS  |  Email |Print

The persistent oil glut has now pushed a price recovery into the second half of 2017, a new report from McKinsey Energy Insights found. McKinsey modeled four possible scenarios: a fast recovery, a slow recovery, under-investment and supply abundance.
The report found that the latest trends indicate that a slow market recovery scenario is the most likely outcome. In a slow market recovery scenario, McKinsey found that it will take another six months for the market to clear the current oversupply. Once the oversupply disappears, McKinsey expects that another six to 12 months will be required to work through excess inventories…………………………………….Full Article: Source

Emerging markets hold key to gold’s renaissance

Posted on 22 September 2016 by VRS  |  Email |Print

Central bank decisions on gold holdings will shape yellow metal’s long-term outlook. The rebuilding of central bank gold reserves since the financial crisis in 2008 marks the latest phase in a two centuries-long cycle of changing policies on the yellow metal, which fall into seven distinct periods or ages.
The Seven Ages of Gold have each lasted an average of around 30 years. And the current, “Rebuilding” period is the longest protracted spell of gold accruals since 1950 to 1965, when central banks and Treasuries acquired a net total of more than 7,000 tonnes during the economic recovery after the second world war…………………………………….Full Article: Source

Iron Ore Prices: Will They Keep Falling?

Posted on 22 September 2016 by VRS  |  Email |Print

There appears to be an almost universal expectation that iron ore prices will start to retreat soon, after surging some 62% through April. The prices have since eased back, but are still up 28% on the year. Without doubt, much of iron ore’s gains in 2016 have been driven by strong demand from China, with imports up 9.3% to 669.65 million metric tons in the first eight months of the year from a year ago.
But prices in Qingdao lost 5.8% in the seven sessions through Wednesday. That was the longest run of daily declines since March, and while steel output remains robust, questions are again being asked as to how much longer prices can remain north of $55 per mt as yet more supply comes on-stream……………………………………Full Article: Source

China & Commodities Recovering, BHP Upgraded

Posted on 21 September 2016 by VRS  |  Email |Print

Macquarie upgraded BHP Billiton (BHP) and two other Australia-based commodity miners Tuesday. “Stronger demand and impact of supply side reforms in China have enhanced the outlook for most bulk commodities. We have materially upgraded our forecasts for coking coal, thermal coal and manganese and upgrade BHP, South32 and New Hope to Outperform on the back of the improved outlook”
Macquarie’s commodities team has made a number of changes to its commodity price forecasts on the back of better than expected demand from China and also the impact of supply side reforms in coal………………………………………Full Article: Source

The Case for ‘Good Picks’ Within Commodities (Video)

Posted on 21 September 2016 by VRS  |  Email |Print

Christoph Eibl, co-founder and chief executive officer at Tiberius Group, discusses the outlook for commodities and why he says there are “good picks” to make within the market. He speaks with Guy Johnson and Caroline Hyde on Bloomberg Television’s “On The Move.”.…………………………………….Full Article: Source

Iran Committed to Building Oil-Market Consensus, OPEC Head Says

Posted on 21 September 2016 by VRS  |  Email |Print

Iran is committed to building a consensus on stabilizing the oil market between OPEC and non-member countries, the group’s new Secretary-General Mohammed Barkindo said. Iranian Oil Minister Bijan Namdar Zanganeh and President Hassan Rouhani “assured me that Iran will do everything possible in joining hands with members within the OPEC group as well as outside OPEC,” Barkindo said in a Bloomberg Television interview in Rome.
“I am quite satisfied with the assurances” given during talks this month in Tehran, he said. The Organization of Petroleum Exporting Countries will hold informal discussions on Sept. 28 in Algiers………………………………………Full Article: Source

OPEC chief: oil market stabilization deal may last one year

Posted on 21 September 2016 by VRS  |  Email |Print

A possible deal to support oil prices by the world’s leading producer countries may last for one year, the secretary-general of OPEC said on Tuesday, longer than other officials have indicated. OPEC and non-member producers including Russia are discussing a deal to stabilize the market by at least freezing output, although key details such as the timing and baseline for any deal have yet to emerge.
“One year, we are looking at one year,” OPEC Secretary General Mohammed Barkindo said, RIA news agency reported. Russia and members of the Organization of the Petroleum Exporting Countries hold an informal meeting in Algiers on Sept. 28. Algeria’s energy minister said on Monday any OPEC move to freeze output would help balance the market for at least six months………………………………………Full Article: Source

Oil Rebounds on Talk of Russia-Iran-OPEC Cooperation

Posted on 21 September 2016 by VRS  |  Email |Print

Oil prices rebounded from a new one-month low Tuesday after further talk of cooperation to cap output among the world’s largest oil exporters. Russia supports a deal that would stabilize oil markets for a year, Russia’s permanent representative to the Organization of the Petroleum Exporting Countries told Interfax news agency Tuesday.
“A year-long agreement would satisfy this criteria,” said Vladimir Voronkov. OPEC Secretary-General Mohammed Barkindo also said that Iranian officials have told him they are committed to negotiating, according to a Bloomberg report. ……………………………………..Full Article: Source

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