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Commodities Briefing - Category | Market Moves more

Agricultural commodities sink after USDA report

Posted on 13 August 2015 by VRS  |  Email |Print

A bearish U.S. Department of Agriculture report sent corn, wheat, and soybean futures sliding on Wednesday after it revealed harvests came in above expectations. The USDA forecast the 2015-16 soybean harvest at 3.916 billion bushels based on an average yield of 46.9 bushels per acre. Both figures were above the government’s previous forecasts and topped the high end of the range of market estimates.
Corn and soybean futures fell sharply after the report was released, with Chicago Board of Trade new-crop November soybean futures sliding 5.8 percent to its lowest since mid-June. December corn sagged 5.6 percent………………………………………..Full Article: Source

Global oil supply grows at ‘breakneck speed’, says IEA

Posted on 13 August 2015 by VRS  |  Email |Print

The global oil glut will persist well into 2016, the world’s leading energy body said on Wednesday, even as the collapse in prices is pushing up demand at the fastest pace in five years. The International Energy Agency, the west’s oil watchdog, said global oil supplies are still growing at “breakneck speed” and outstripped consumption in the second quarter by 3m barrels a day, the most since 1998.
“While a rebalancing has clearly begun, the process is likely to be prolonged,” the IEA said in its closely watched monthly oil market report. “Global inventories will pile up further,” it said, adding that demand will not cut into the surplus until late 2016 at the earliest………………………………………..Full Article: Source

Oil Demand Growing at Fastest Pace in Five Years, Says IEA

Posted on 13 August 2015 by VRS  |  Email |Print

Demand for oil is increasing at its fastest pace in five years, boosted by an oil-price drop below $50 a barrel, a top energy watchdog said Wednesday, as it sharply upgraded its consumption-growth forecast for the commodity. But in a blow to the Organization of the Petroleum Exporting Countries’ strategy to defend its market share, the International Energy Agency said lower oil prices would only start to dent rival production next year.
In its closely watched monthly report, the IEA said global oil demand would grow by 1.6 million barrels a day this year, an upward revision of 200,000 barrels a day from its previous forecast, and would keep rising by 1.4 million barrels a day next year………………………………………..Full Article: Source

China strengthens hold over oil market as price maker

Posted on 13 August 2015 by VRS  |  Email |Print

China’s growing ability to buy and sell millions of barrels of crude oil on the Asian physical market in a matter of minutes through its main trading firms has given China so much clout that other traders are often forced to follow its agreed prices.
Leading Chinese oil traders have cornered the market on several occasions since October last year. Early this month, Chinaoil, the trading arm of PetroChina, bought 5 million barrels of crude in just 30 minutes through Asia’s main price-finding mechanism organised by Platts, part of McGraw Hill Financial Inc………………………………………..Full Article: Source

Iran’s oil output up 32,300 bpd in July: OPEC

Posted on 13 August 2015 by VRS  |  Email |Print

Iran’s oil production reached 2.861 million barrels per day (bpd) in July, with 32,300 bpd growth from June, the Organization of Petroleum Exporting Countries (OPEC) said in its latest report. The report put the OPEC’s member countries’ total oil output at 31.513 million bpd in July, showing 101,000 bpd rise from 31.412 million bpd in June, the Fars News Agency reported on Wednesday.
Iran, once OPEC’s second-largest producer after Saudi Arabia, is seeking to clear space for its gradual return to the market after lifting of sanctions. The country’s current oil production is estimated to be around 2.7 million bpd………………………………………..Full Article: Source

Commodities crumble on China devaluation

Posted on 12 August 2015 by VRS  |  Email |Print

Commodities from metals to oil fell on Tuesday after China devalued its currency, renewing concerns about growth in the world’s largest consumer of raw materials. Copper fell 4 per cent to a six-year low of $5,114 a tonne, after a brief rally last week. Brent crude, the benchmark oil price, fell almost 3 per cent, back below $50 a barrel, after rallying almost 4 per cent in the previous session.
Metals have been hit by weaker demand in China and continued supply from miners, which have benefited from low energy costs and a stronger dollar. Copper prices are down 21 per cent since their peak this year in May………………………………………..Full Article: Source

With Yuan Devaluation, China Digs a Hole for Commodities

Posted on 12 August 2015 by VRS  |  Email |Print

China’s appetite for commodities from gold to crude oil to copper is likely to be hurt in the near term after the country’s surprise decision to devalue its currency. Most commodities are priced in dollars, so a weaker yuan will raise the cost of imports for buyers in China, weighing on demand.
Given China’s role as a huge buyer of global commodities—it consumes nearly half of the world’s annual output of metals, for instance—any drop in demand there is likely to put further downward pressure on resource prices, many of which are already at multiyear lows. “In the short run, this [devaluation] is more bad news for commodity prices. A weaker Chinese currency is likely to mean weaker demand for internationally produced commodities,” said Paul Bloxham, chief economist for Australia and New Zealand at HSBC………………………………………..Full Article: Source

China’s surprise currency devaluation sends commodities plunging: ‘Another sign of economic weakness’

Posted on 12 August 2015 by VRS  |  Email |Print

The last time China imposed extreme economic stimulus measures they drove huge gains in commodity prices. But this time, they’re just making things worse. Commodities plunged to new multi-year lows on Tuesday after China’s surprise move to de-value its currency by nearly two per cent. Oil and copper both dropped to their lowest levels since 2009. Zinc fell as much as four per cent, and nickel and aluminum were down as well.
The drop in commodities underscores the fact that investors have deep-seated concerns about China’s shrinking growth, and the government’s ability to stem the slowdown. China is the world’s primary driver of commodity demand, and its recent equity market meltdown and disappointing economic data have been rattling commodity markets for weeks………………………………………..Full Article: Source

OPEC raises 2015 oil demand forecast despite bearish markets

Posted on 12 August 2015 by VRS  |  Email |Print

OPEC on Tuesday revised upward its growth forecast for global oil demand in 2015 and maintained projected record levels of world consumption next year, despite turbulent market conditions spurred by financial instability in Greece and China.
In its August monthly report, the Organization of the Petroleum Exporting Countries said it was expecting world oil demand to grow by 1.38 million barrels per day — some 90,000 more than announced in its July estimates………………………………………..Full Article: Source

July OPEC output hits 3yr-high as Iran oil returns to market

Posted on 12 August 2015 by VRS  |  Email |Print

OPEC pumped 31.5 million barrels per day (bpd) last month as Iran raised its production to 2.86 million bpd, the highest since international sanctions against the country were toughened in June 2012. The return of Iranian oil to the market could make oil even cheaper than the current lows of about $49.50 a barrel.
“According to secondary sources, total OPEC crude oil production averaged 31.51 million barrels per day in July, an increase of 101,000 barrels per day over the previous month. Crude oil output increased mostly from Iraq, Angola, Saudi Arabia and Iran, while production in Libya showed the largest drop,” OPEC said……………………………………….Full Article: Source

Asia alumina prices rangebound; sentiment stays bearish

Posted on 12 August 2015 by VRS  |  Email |Print

The Platts Australian alumina daily assessment was steady Tuesday at $297/mt, unchanged from last Thursday, but down $3.50 on the week and down $18.50 from a month earlier. Platts did not publish alumina assessments on Friday and Monday due to a four-day weekend in Singapore for extended National Day celebrations.
Market sentiment remained bearish on Tuesday as aluminum prices stayed soft and demand for spot alumina lackluster, with buyers expecting prices to continue testing lower in the near term. A Chinese consumer/reseller quoted $315/mt CIF China basis for a 30,000 mt Western Australia cargo, first half September loading, but said Chinese buy ideas were mostly below $310/mt………………………………………..Full Article: Source

Rumors of Commodities’ Demise Are Not Being Exaggerated

Posted on 11 August 2015 by VRS  |  Email |Print

Commodities are the gift that keep on not giving. The sector is in the throes of an ‘annus horribilis’, having gotten wrecked over the past few years despite massive liquidity that should have boosted their value. Bullish investor after bullish investor has tried to call a bottom, in a set of calls that now appear ill-conceived and money losing.
In the past week, the S&P GSCI Commodity Index has dropped 3.4 percent in the past week, as crude oil plunged 7 percent to hit multi-month lows, and a host of metals fell alongside it. That, of course, hardly marks the first big drop for the alternative investment group. That widely watched commodity index has fallen 17 percent the last three months, and a whopping 42 percent in the past two years………………………………………..Full Article: Source

Barron’s: Time to Buy Commodities, Market Is Oversold

Posted on 11 August 2015 by VRS  |  Email |Print

With commodities indices hitting 13-year lows last week, now must be time to exit the asset class with both feet running, right? Quite the contrary, says Barron’s columnist Andrew Bary. “It’s time to consider commodities,” he writes.
“While the Standard & Poor’s 500, Nasdaq Composite, and other key equity indexes are near record levels, commodity stocks, including energy shares, are way below their peaks. Commodities are probably the most out-of-favor industry group in the stock market.”……………………………………….Full Article: Source

Stock Market’s Catch Up To Commodities Raises Volatility Question

Posted on 11 August 2015 by VRS  |  Email |Print

U.S. stock indexes positioned for a mild Monday bounce but did little to shake Wall Street from its cautious posture. The nagging issue of a sky-high dollar’s drag on multinational companies’ earnings prospects and a broad commodities slump continue to weigh on stock sentiment, at least sort of.
These lingering issues could factor into trading this week and are likely on the Federal Reserve’s mind as it mulls flipping the switch to higher interest rates. The broader stock market’s resiliency in the face of headwinds raises a new dilemma, at least according to some observers. Valuations, especially those fed by share buybacks, are stretched. The big worry? Wall Street may be getting pretty comfy propped up by buybacks………………………………………..Full Article: Source

OPEC has no plan for special meeting on oil drop: Delegates

Posted on 11 August 2015 by VRS  |  Email |Print

OPEC oil exporters have no plans for an emergency meeting to discuss the drop in oil prices before a next scheduled gathering in December, two OPEC delegates said on Monday. Algerian Energy Minister Salah Khebri said discussions about potentially holding such a meeting were ongoing, state news agency APS reported on Monday as oil prices fell towards $48 a barrel, their lowest since January.
Algeria is one of the Organization of the Petroleum Exporting Countries members which had misgivings about its 2014 shift in policy to defend market share rather than prop up prices, and has been seeking supply cuts………………………………………..Full Article: Source

India: Commodities rout brings relief for firms

Posted on 10 August 2015 by VRS  |  Email |Print

Manufacturers see profitability at highest level in a year as raw material costs decline, demand stays steady. Profitability of Indian manufacturing companies rose to the highest level in a year as global commodity prices plunged and demand in Asia’s third largest economy held steady.
The ability of some firms to retain the benefits of lower input costs, rather than pass them on to the consumer in the form of price cuts to help stoke consumption, also reflects a mild improvement in pricing power. Operating profit margin, the difference between revenue and expenses, climbed to 14.67%, the highest since the quarter ended June 2014 and the second highest since at least March 2012, according to a Mint analysis of 142 manufacturing companies that are part of the BSE 500 index and have reported their June quarter earnings………………………………………..Full Article: Source

Venezuela: ‘Terrorised by oil price drop’

Posted on 10 August 2015 by VRS  |  Email |Print

When a frustrated mother threw a mango at Nicolás Maduro in April, hitting him on the head, she could never have guessed the outcome: the Venezuelan president promised his homeless attacker a new apartment.
Others are not so lucky. Lolimar Gelis and her family lost their home in 2010 when a mudslide destroyed their shanty town, forcing them to take shelter at a military garrison in the west of the capital, Caracas. Despite appeals to the country’s leaders, the family is still waiting to be rehoused via a scheme launched by Mr Maduro’s predecessor, Hugo Chávez………………………………………..Full Article: Source

What’s happening in the oil market right now is ‘unprecedented’

Posted on 10 August 2015 by VRS  |  Email |Print

The price of oil has collapsed again. And now the oil market is looking at a future that is “unprecedented.” In a note to clients this week, analysts at Goldman Sachs took a look at the market and the supply glut that has been blamed for the collapse in oil prices over the last year.
And as Goldman sees it, quite simply, the rules of the market have changed. “The market structure of the New Oil Order is unprecedented,” the firm writes, adding that the balance of power between the market’s largest and smallest companies has changed………………………………………..Full Article: Source

The gold rout has stopped, for now

Posted on 10 August 2015 by VRS  |  Email |Print

After the US job market report on Friday, global gold prices recouped losses made in the early part of the week and closed at $1,094/ounce, down 0.15 per cent. The market now believes that the Federal Reserve may not put through multiple rate increases this year.
Data from US department of Labour showed that the non-farm pay rolls rose by 2,15,000 in July against the expected additions of 2,23,000. However, as long as US rate hike fears hang like a sword over gold prices, there can be no sustained relief rally in gold. In the coming few weeks, if signs emerge of a strengthening labour market in the US, this will again fan the market’s expectation of a more than one rate hike in 2015 and gold will take a beating………………………………………..Full Article: Source

Aluminium Trend: Excess supply makes a deep dent

Posted on 10 August 2015 by VRS  |  Email |Print

The shiny world of metals that includes aluminium, copper and tin is facing a meltdown. The metal price boom — that peaked in 2008 — has been waning since the global financial crisis. From early this year, the price fall has been intensifying. Among the metals hit hard by the commodity price correction is aluminium. The price of the metal at the London Metal Exchange (LME), which hovered below $1,700 a tonne in early 2014, crossed $2,000 a tonne last August.
But it could not hold these levels for long. Since the start of 2015, LME prices have fallen by 12 per cent from $1,800 to below $1,600 a tonne. One reason for this is slackening of demand. Higher supply, especially from China, is also hurting. Besides, the changes in warehouse rules at the LME have helped reduce physical delivery delays………………………………………..Full Article: Source

Oil bulls’ hope for quick price dip dimmed by 2020 crude under $70

Posted on 06 August 2015 by VRS  |  Email |Print

As oil prices entered a second steep slide a few weeks ago, bullish traders and analysts had hoped for a repeat of the sharp but short dip that occurred early in the year - a speculative slide below $50 a barrel followed by a quick recovery. Some are now reconsidering that view, as long-term oil prices take the lead in the market’s latest dive, swaying sentiment toward a lengthier slump that would mean prolonged pain for big producers, from Exxon Mobil Corp to Saudi Arabia.
While immediate delivery benchmark global Brent crude oil futures at $50 a barrel are still about $4 higher than they were at their lowest point in January, prices for delivery in December 2020 are nearly $8 lower than the start of this year, trading at a contract low of less than $67 on Tuesday. A year ago the contract hovered at around $100 a barrel………………………………………..Full Article: Source

A fundamental change might be coming to the world’s oil markets

Posted on 06 August 2015 by VRS  |  Email |Print

A flood of bearish news has pushed down oil prices to their lowest levels in months, with WTI nearing $45 per barrel and Brent flirting with sub-$50 territory. With a bear market back, there is pessimism throughout the oil markets. Goldman Sachs is even predicting oil stays at $50 through 2020, a profoundly grim view of the state of oil supplies.
On the other hand, the contraction in U.S. shale is underway, so it is just a matter of time before the mismatch between supply and demand balances out………………………………………..Full Article: Source

Caught in the cross-fire: Non-OPEC, non-shale producers

Posted on 06 August 2015 by VRS  |  Email |Print

The biggest losers from the current price war between OPEC and the shale producers seem set to be producers outside the Middle East and North America caught in the cross-fire. Expensive production from the North Sea, Canada’s oil sands, offshore mega projects, weaker African and Latin American members of OPEC, and frontier exploration areas around the world are all being squeezed hard by the price slump.
According to oil field services company Baker Hughes, the number of rigs drilling for oil outside North America has fallen by over 200, or about 19 percent, since July 2014. Rig counts have fallen in every region, with 28 fewer active rigs in Europe, 47 fewer in the Middle East, 33 in Africa, 66 in Latin America and 34 in Asia Pacific………………………………………..Full Article: Source

How China Plans to Dominate Pricing in the Gold Market

Posted on 06 August 2015 by VRS  |  Email |Print

The rise of China, the world’s most populous nation, is moving influence and assets from West to East. And this is having a dramatic effect on the gold market. China’s efforts over the last two decades to modernize and urbanize its economy have created a burgeoning middle and upper class with growing disposable income and net worth.
China has a long-time affinity toward gold. For the past several years, it’s consistently been one of the top two gold consumers worldwide. (India holds the title of No. 1 gold consumer – for now.) China is also the world’s largest gold producer. So it stands to reason that China would want to exert more influence over the gold market – and gold prices………………………………………..Full Article: Source

The Weakness In Commodities Continues

Posted on 06 August 2015 by VRS  |  Email |Print

Unfortunately, the hopes of many commodity traders for an end-of-summer rally appear to be fleeting. As you can see from the chart of the United States Commodity Index Fund (USCI), which is a common product that is used by active traders for gaining exposure to a broad basket of commodities, the recent break below the dotted support level is a technical sign of continued downward momentum.
Many bearish traders will also use the failed attempt to move back above the trendline as conformation that the short-term momentum is in their favor and they will likely look to protect short positions by placing stop-loss orders above the nearby 50-day moving average (blue line), which is currently trading at $45.88………………………………………..Full Article: Source

Global capex set to shrink as commodities crunch bites

Posted on 05 August 2015 by VRS  |  Email |Print

Conditions for Australia’s engineering and construction companies are set to worsen as the full effect of the post-commodities boom takes hold, with a survey showing business investment globally is likely to shrink for the next two years. Standard & Poor’s Ratings Services’ third annual global capital expenditure survey found non-financial corporate capital expenditure (capex) would fall 1 per cent this year and 4 per cent in 2016 before stabilising.
Energy and mining companies, which made up nearly 40 per cent of global capex in 2014, will drive the continued weakness in corporate spending worldwide as the price of their products remain under pressure. In 12 months, the price of iron ore has fallen 42 per cent to $US55.63 a tonne, while the benchmark brent oil price has dropped 53 per cent to $US49.88 a barrel………………………………………..Full Article: Source

Commodities dip derails Fed rate hike

Posted on 05 August 2015 by VRS  |  Email |Print

The Federal Reserve will have a harder time making the case for a September rate hike if commodity prices continue to slip, JPMorgan Asset Management’s David Lebovitz said Tuesday.
“As commodity prices continue to fall, it’s going to make it more and more difficult for the Fed to reach that 2 percent inflation target and have a reason for hiking rates,” Lebovitz said.”Still, Lebovitz said he expects the Fed will likely raise at least once this year………………………………………..Full Article: Source

Oil Companies’ Spending Cuts Unlikely to Be Enough

Posted on 05 August 2015 by VRS  |  Email |Print

The world’s biggest oil companies have vowed to bring down the costs of big projects in the face of slumping oil prices, but the unrelenting price weakness—with crude below $50 a barrel—suggests they could have to dig deeper still.
In the past year, as oil prices plunged 60% from highs of $114 in 2014, U.K. energy giant BP PLC began testing new projects for profitability around $60 a barrel, down from $80 a barrel last year. Its Anglo-Dutch rival Royal Dutch Shell is testing projects at prices as low as $50 a barrel, though its overall price outlook is between $70 and $110 a barrel………………………………………..Full Article: Source

China’s Aluminum Producers Stare Down Price Plunge

Posted on 05 August 2015 by VRS  |  Email |Print

Chinese aluminum producers aren’t curbing their output despite the metal’s slump to a six-year low, suggesting the price of one of the world’s most heavily-traded metals still has far to go before finding a floor. Metals producers normally usher in supply cutbacks when prices fall as hard as they have done for aluminum this year.
But with a host of new cost-efficient smelters now online in China, few there are blinking yet. That is bad news for the broader market as surging Chinese aluminum exports in recent months have been one of the biggest drivers of the metal’s price plunge. China accounts for about half of the world’s aluminum production………………………………………..Full Article: Source

Dollar’s slip helps stabilise commodities

Posted on 05 August 2015 by VRS  |  Email |Print

Commodity prices stabilised on Tuesday after a key index fell to its lowest closing level since 2003 in the previous session, with oil moving back above $50 a barrel. The Thomson Reuters Core Commodity Index, which measures the performance of 19 commodities, on Monday closed below 200 for the first time in more than a decade, in the latest sign that the so-called commodity supercycle has come to an end.
On Tuesday the index edged back above 200 as the US dollar slipped, helping support commodities priced in the greenback, but few are prepared to say that the rout is over. Brent crude, the international oil benchmark, rose 1 per cent to trade at $50.07 a barrel, having hit a six-month low of $49.52 in the previous session………………………………………..Full Article: Source

The real message of plunging commodities

Posted on 04 August 2015 by VRS  |  Email |Print

The Chinese stock market recently saw its biggest selloff in eight years as the dramatic 8.5-percent fall in Shanghai “A” shares also rattled markets around the world. For the past few weeks, China has been balancing its desire to keep the equity market from a complete meltdown, while still courting the international investment community with hopes of being a dominant player in the capital and currency markets.
But recently, the International Monetary Fund warned China’s government about its concern over limiting investors’ freedom to take equity out of financial markets. These concerns were raised when the IMF met with officials in to discuss the chances of including the yuan in the fund’s basket of currencies, also known as Special Drawing Rights………………………………………..Full Article: Source

Oil Falls to Near $50 After OPEC Monthly Supply Rises

Posted on 04 August 2015 by VRS  |  Email |Print

Oil slid to six-month lows on Monday, hit by fresh evidence of growing oversupply, investor bearishness and slowing demand in China, leaving crude prices on course for their weakest third-quarter performance since the financial crisis in 2008.
A Reuters survey last week showed oil output by the Organization of the Petroleum Exporting Countries (OPEC) reached the highest monthly level in recent history in July. Saudi Arabia and other key members are showing no sign of wavering in their focus on defending market share instead of prices, which have fallen 9 per cent this year………………………………………..Full Article: Source

Caught in the cross-fire - non-OPEC, non-shale producers: Kemp

Posted on 04 August 2015 by VRS  |  Email |Print

The biggest losers from the current price war between OPEC and the shale producers seem set to be producers outside the Middle East and North America caught in the cross-fire. Expensive production from the North Sea, Canada’s oil sands, offshore megaprojects, weaker African and Latin American members of OPEC, and frontier exploration areas around the world are all being squeezed hard by the price slump.
According to oilfield services company Baker Hughes, the number of rigs drilling for oil outside North America has fallen by over 200, or about 19 percent, since July 2014. Rig counts have fallen in every region, with 28 fewer active rigs in Europe, 47 fewer in the Middle East, 33 in Africa, 66 in Latin America and 34 in Asia Pacific………………………………………..Full Article: Source

Ruthenium, iridium dip on lower offers, rhodium range narrows

Posted on 04 August 2015 by VRS  |  Email |Print

Ruthenium and iridium prices followed the recent path of rhodium and moved lower this week on lower offers and weak industrial demand. The Platts New York Dealer ruthenium price range slipped to $30-$40/oz this week from $35-$42/oz last week, while the Platts New York Dealer iridium price dropped to $450-$500/oz from $475-525/oz.
Both markets, which attract few speculative buyers, have been hampered by a prolonged lack of demand from industrial consumers. Demand for ruthenium, which is used to make computer hard disks, has been affected by the advent of cloud data storage………………………………………..Full Article: Source

Commodities rout brings global winners and losers

Posted on 03 August 2015 by VRS  |  Email |Print

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

Commodity prices fall hits capital expenditure

Posted on 03 August 2015 by VRS  |  Email |Print

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

Where to trade in commodities complex?

Posted on 03 August 2015 by VRS  |  Email |Print

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

Iran sees oil output up 1 mln bpd after curbs end

Posted on 03 August 2015 by VRS  |  Email |Print

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

Iran warns Opec it plans to recapture market share

Posted on 03 August 2015 by VRS  |  Email |Print

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

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

Posted on 31 July 2015 by VRS  |  Email |Print

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

OPEC, Russia: ‘Oil market to stabilize’

Posted on 31 July 2015 by VRS  |  Email |Print

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

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

Posted on 30 July 2015 by VRS  |  Email |Print

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

Get ready to cash in on the bottom for commodities

Posted on 30 July 2015 by VRS  |  Email |Print

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

Demand not enough to boost oil price

Posted on 30 July 2015 by VRS  |  Email |Print

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

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

Posted on 30 July 2015 by VRS  |  Email |Print

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

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

Posted on 30 July 2015 by VRS  |  Email |Print

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

Zinc market could be facing concentrate supply deficit: Investec

Posted on 30 July 2015 by VRS  |  Email |Print

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

Despite bumpy June/July, CTAs hold on

Posted on 30 July 2015 by VRS  |  Email |Print

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

China paves a silk road for commodities

Posted on 29 July 2015 by VRS  |  Email |Print

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

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

Posted on 29 July 2015 by VRS  |  Email |Print

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

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