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Commodities Briefing - Category | Market Moves more

Gold poised at the brink

Posted on 06 October 2014 by VRS  |  Email |Print

Gold had another forgettable week in global markets, registering a negative close below the psychological $1,200 per ounce mark at $1,191.42, down 2.2 per cent. Mixed data releases from the US prompted gold to register volatile trades between $1,204 and $1,223 until Thursday.
The trigger for the sharp fall came on Friday in the form of the US non-farm payroll (NFP) and unemployment data. The NFP increased in September by 248,000 as against the market expectation for a 216,000 rise. Also, the unemployment rate in the US fell below 6 per cent for the first time since July 2008 to 5.9 per cent in September from 6.1 per cent in the previous month………………………………………..Full Article: Source

India Looking at Merging Commodity Market Regulator With Sebi

Posted on 06 October 2014 by VRS  |  Email |Print

The government is considering a proposal to merge the Forward Markets Commission (FMC) with the Securities and Exchange Board of India (Sebi) to ensure better monitoring of the commodity futures market. “One of the options being considered by the government is merging FMC with Sebi,” a senior Finance Ministry official said.
Alternatively, the official said, the government may also pursue the long-pending proposal to give more powers to FMC by amending the Forward Contract Regulation Act (FCRA) Amendment Bill. While FMC is the regulator for commodities trading, Sebi regulates the capital markets………………………………………..Full Article: Source

Commodity prices: Oil and trouble

Posted on 03 October 2014 by VRS  |  Email |Print

Give commodity markets credit: they are anything but boring. Between 2000 and 2011 broad indices of commodity prices tripled, easily outpacing global growth and stoking Malthusian hysteria. Jeremy Grantham, a wealthy financier, noted at the time that it was not so much “peak oil” that would undo humanity but “peak everything else”.
Yet since then commodity prices have slumped by about a quarter, and roughly 11% since June alone. That is not, however, an unalloyed good. This reversal of fortunes, naturally, is much better news for net importers of resources than for net exporters. For consumers, a drop in the price of natural gas or rice is like a tax cut: it leaves households with more disposable income………………………………………..Full Article: Source

How the oil and gas boom is changing America

Posted on 03 October 2014 by VRS  |  Email |Print

The US oil and gas boom has been one of the biggest and most consequential energy stories of the last decade. And one of the best books for understanding how that boom is affecting America is Michael Levi’s The Power Surge, published back in 2013.
As Levi explained when I interviewed him last year, his book is actually about two different energy revolutions going on in the United States — each with its own set of supporters. On the one hand, US oil and gas production has been surging since 2005, thanks to hydraulic fracturing and other drilling techniques. But at the same time, alternative energy sources like wind power and electric vehicles had been making surprising advances………………………………………..Full Article: Source

Some in OPEC worried by oil drop, but no plan yet-sources

Posted on 03 October 2014 by VRS  |  Email |Print

Some OPEC countries are calling for supply cuts after a drop in oil prices, but core Gulf members are betting winter demand will revive the market, suggesting the group is no closer to any collective steps.
The differing views within the 12-member Organization of the Petroleum Exporting Countries (OPEC) highlight a split between Saudi Arabia and its Gulf Arab allies and other members, such as Iran, who face greater budget pressures from sub-$100 oil………………………………………..Full Article: Source

J.P. Morgan Commodities Assets Sale to Mercuria Smaller Than Planned

Posted on 03 October 2014 by VRS  |  Email |Print

J.P. Morgan Chase & Co. will sell a much smaller chunk of its physical commodities business to a Swiss trading firm than previously planned, cutting the deal’s value to about $800 million from $3.5 billion, according to people familiar with the matter.
The sale to Mercuria Energy Group Ltd., one of the world’s largest commodity traders, is expected to be completed this week, the people said. Prices of commodities such as oil and copper have fallen sharply since the companies announced the transaction in March………………………………………..Full Article: Source

Commodities slump to four-year low but is now the time to buy?

Posted on 02 October 2014 by VRS  |  Email |Print

Commodities have slumped to their lowest level in years as growth in China slows and American harvests boom. So is now the time to buy in? Last week, the Bloomberg Commodities index, one of the most widely followed measures of aggregate commodities, fell to its lowest level in four years.
Capital Economics head of commodities research Julian Jessop says the situation with commodities is “far more nuanced” than may be thought. “It is actually encouraging, on balance, for global economic prospects………………………………………..Full Article: Source

Commodity prices fall 2.4% in September: RBA

Posted on 02 October 2014 by VRS  |  Email |Print

A weakening market for iron ore helped to push export commodity prices down by 2.4 per cent in September to a level 37 per cent below their peak just over three years ago. Australia’s biggest export was the main culprit for the latest monthly fall, measured in foreign currency terms, the RBA said in commentary on its data released on Wednesday.
However prices for base metals and rural commodities also fell. Measured in terms of the Australian dollar, which edged back in September, commodity prices were down by 1.4 per cent in the month………………………………………..Full Article: Source

Global Oil market balances to deteriorate in 2015: PIRA Energy

Posted on 02 October 2014 by VRS  |  Email |Print

NYC-based PIRA Energy Group reports that PIRA is cautiously optimistic the global economy will withstand the Fed’s policy shift. In the U.S., stock build slows. In Japan, crude runs perk up, crude stocks draw. Specifically, PIRA’s analysis of the oil market fundamentals has revealed the following:
World Oil market forecast, September 2014: PIRA is cautiously optimistic the global economy will withstand the Fed’s policy shift and lift into next year with growth above trend. Despite this, and a rebound in oil demand growth, oil market balances are forecast to deteriorate in 2015. Low first half 2014 stocks hid blemishes but now that inventories have rebuilt………………………………………..Full Article: Source

Analysts see silver lining as precious metal hits four-year lows

Posted on 02 October 2014 by VRS  |  Email |Print

Silver - for which Australia is one of the world’s leading producers - has hit four-year price lows, falling beneath $US16.90 per ounce during intraday trading on Wednesday. Although not one of Australia’s major resources in terms of production or export value, 59.2 million ounces of the precious metal was extracted from the country’s mines in 2013, just over $US1 billion worth. This puts Australia in fourth place worldwide, behind China, Peru and top producer Mexico.
Unfortunately for silver fans, it’s all been downhill since April 2011 when silver reached its nominal record high of $US49.76 per ounce. The reason is simple, say analysts: silver tends to track gold very closely. Gold has become less popular as monetary policy in the United States normalises and silver is following faithfully behind………………………………………..Full Article: Source

The collapse in “physical demand” for precious metals in the USA

Posted on 02 October 2014 by VRS  |  Email |Print

Some precious metal bulls like to dismiss price declines in gold and silver by pointing to the strength of “physical demand.” (Savers who put their wealth into precious metals never seem to get paid for this “physical demand”, but whatever…)
For example, here is Jim Rickards: So we thought it would be worth sharing some charts from Nick Colas over at Convergex that track spending on gold and silver coins issued by the US Mint. This isn’t a perfect measure of “physical demand” for bullion but it ought to be consistent over time………………………………………..Full Article: Source

Commodities Head for Biggest Quarterly Loss Since 2008

Posted on 01 October 2014 by VRS  |  Email |Print

Corn futures tumbled to a five-year low, gold is the cheapest since January and copper extended this year’s decline as raw materials posted their worst quarter since 2008. The Bloomberg Commodity Index fell as much as 1.5 percent today, the biggest intraday loss since June 2013.
U.S. corn inventories before the start of this year’s harvest were bigger than analysts forecast, the government said today. Holdings in bullion-backed exchange-traded products are near the lowest in five years amid waning investor demand………………………………………..Full Article: Source

World economic growth to hit 3.4% in 2015 –OPEC

Posted on 01 October 2014 by VRS  |  Email |Print

The Organisation of Petroleum Exporting Countries, OPEC has put the 2015 world economic growth at 3.4 per cent. The cartel expect the world oil demand to increase by 1.19 million barrels per day, bpd, representing a marginal downward adjustment, as an upward revision in the non-OECD region was offset by slower OECD growth.
The organisation stated in its latest report that non-OPEC oil supply is projected to grow by 1.24 mb/d, representing a downward adjustment of 30 tb/d from the previous forecast during the period………………………………………..Full Article: Source

Demand For Physical Gold Remains Strong As Bullion Banks Suppress Prices

Posted on 01 October 2014 by VRS  |  Email |Print

September has been a poor month for precious metals. Gold is down 5.2%, despite it being gold’s strongest month from a seasonal perspective. The price fall means that gold is heading for the first quarterly loss this year.
As a dollar-driven rally spurred by U.S. economic growth and after the U.S. Federal Reserve indicated it could raise interest rates sooner than expected earlier this month, gold prices have come under pressure for the entire month of September………………………………………..Full Article: Source

Fed Alarm as Commodities Drop Punishes South African Debt

Posted on 30 September 2014 by VRS  |  Email |Print

South African bonds are on course for their worst returns in eight months, with more pain probably ahead, squeezed between tumbling commodity prices and an emerging-market selloff sparked by the Federal Reserve.
Local-currency debt fell in September, what would be the first monthly decline since January, according to Johannesburg Stock Exchange indexes. The securities lost 6.1 percent for dollar investors in the period, the most after Brazil among 31 developing nations tracked by Bloomberg………………………………………..Full Article: Source

Commodities bear looks to be digging in for long run

Posted on 30 September 2014 by VRS  |  Email |Print

The commodities bear market looks entrenched. Strong supply-side responses, or successful economic stimulus by the European Central Bank, would be required to reverse price falls. Neither looks terribly likely. There is no dearth of reasons to explain a 12-per-cent decline in the Thomson Reuters-Jefferies CRB index of commodity prices in the past three months.
First, there is the ascendancy of the U.S. dollar, whose index has hit four-year highs and looks likely to climb a lot further. Commodities are priced in the U.S. currency. So, as the greenback gains in value, fewer dollars should be required to buy them. While this relationship doesn’t always hold, correlations show the linkage is near-perfect at the moment………………………………………..Full Article: Source

Do Falling Commodity Prices Spell Doom?

Posted on 30 September 2014 by VRS  |  Email |Print

A week after the Federal Reserve announced its plan to keep interest rates low, it inadvertently bolstered the appeal of the dollar over raw materials as a store of value.As a result, while U.S. equities are on the rise, global commodity prices have hit a five-year low. But is the commodities slump simply an issue for the natural resources industries, or is it cause for concern for the larger economy?
This week’s Chart of the Week shows that the Bloomberg Commodity Index, Brent crude and iron ore are all in a slump. The Bloomberg Commodity Index, an index of 22 raw materials, dropped 5.6% this year. Brent crude dropped 12% – hitting a two-year low last week. The iron ore at the Chinese Qingdao port dropped 41% this year – hitting a five-year low last……………………………………….Full Article: Source

Speculators Slash Bets on Rising Crude Oil Price

Posted on 30 September 2014 by VRS  |  Email |Print

Speculators slashed bets on a rising Brent crude oil price by 34% in the week ended Sept. 23, the biggest weekly cut in their net long position in three years, as the oil price continued to slide lower.
In the week to Sept. 23, speculators reduced their net long position—the total number of bets that the price of oil would rise minus the number of bets that it would fall—by 33.7%, according to exchange data released Monday. The last time speculators made a cut this sharp was in October 2011………………………………………..Full Article: Source

China gold demand surging again

Posted on 30 September 2014 by VRS  |  Email |Print

We cannot emphasise more strongly that gold followers should ignore the mainstream media reports, based on Hong Kong gold export figures to mainland China, that Chinese gold demand has plummeted by anything between 30% and 50% this year. As we pointed out in an article last week, Hong Kong is now no longer the principal port of entry for gold into the Chinese mainland.
When it was still so, gold exports into China were extremely high at the beginning of the year, but since then the Hong Kong figures have tailed off as China effectively opened up gold import routes through other entry points – notably Shanghai and Beijing , resulting in the Hong Kong net gold exports falling back month by month from a peak of 111 tonnes in February to a mere 21 tonnes in August. This is thus no longer an indicator of overall Chinese gold demand………………………………………..Full Article: Source

Bumper Crops Continue To Drive Ag Commodities Lower

Posted on 30 September 2014 by VRS  |  Email |Print

It was another week of falling prices for soft commodities, as oversupply issues continue to dominate across all the major markets. This is clearly evident from the weekly charts. As the largest exporter, it is the US which sets the price for world markets, with the US Midwest corn belt set to produce a record harvest for a second year. soybeans too are expected to generate the largest crop ever on record.
This picture of bumper harvests is also mirrored in Canada, and even events in the Ukraine and Russia have had little impact on prices. China too, is increasingly adding storage facilities to cope with its own booming harvest and imports, with corn and rice now in plentiful supply………………………………………..Full Article: Source

Shale, Saudi Arabia and Islamic State Leave Oil Bulls Sweating

Posted on 29 September 2014 by VRS  |  Email |Print

There was a time when headlines about jets bombing Middle Eastern refineries would have sent oil prices soaring. Granted, Islamic State’s facilities aren’t exactly world class. But it is telling that such violence is doing little to lift the price of crude. Brent is down 13% this year and looks set to post its weakest yearly average price since 2010, before the Arab Spring really got going.
The big culprit for this disconnect is shale. U.S.-led growth in oil output from the industrialized world since the start of 2011 offsets supply disruptions in the Organization of the Petroleum Exporting Countries, according to Citigroup………………………………………..Full Article: Source

Iran Urges OPEC To Stop Oil Slide, Gulf Members Relaxed

Posted on 29 September 2014 by VRS  |  Email |Print

Iran on Friday urged OPEC members to make joint efforts to keep oil prices from falling further, highlighting a split with other members such as Saudi Arabia who face lower budget pressures despite a slide in prices towards $95 a barrel. Oil has fallen from $115 in June, pressured by concern about slowing global demand and higher supplies as Libyan output recovers, raising concern among some oil exporters of lower revenues.
“Considering the downward trend in prices, OPEC members should try to temper production to avoid further price instability”, Iran’s oil minister, Bijan Zanganeh, was quoted by the Iranian oil ministry website Shana as saying………………………………………..Full Article: Source

China spurns gold, adding to price woes

Posted on 29 September 2014 by VRS  |  Email |Print

The slump in the gold price that has occurred in recent months shows no signs of letting up, and the latest import data from China will not give any joy to gold bugs. As gold closed at $1,219.40 in New York on Friday, a report out the same day by Commerzbank stated that Chinese gold imports will “fall well short” of last year. Hong Kong’s Census and Statistics Department shows China imported only 27.5 net metric tons in August.
“This puts net imports only slightly above the previous month’s low level, which constituted the lowest figure since June 2011,” Commerzbank said. The bank notes that net gold imports from Hong Kong are down by a third from the corresponding period last year, to 497 tons. August was the sixth straight month that Chinese gold imports have fallen………………………………………..Full Article: Source

Precious metals fall

Posted on 29 September 2014 by VRS  |  Email |Print

Platinum has fallen to a near-five-year low and gold ended at its weakest price so far in 2014, hit by the combination of a rising US dollar and concerns about global demand. The greenback gained ahead of data next week that include gauges the Federal Reserve will be watching, such as monthly employment numbers. At the same time, worries that slow growth in Europe, China and Japan would curb demand for cars hit platinum prices. Platinum and its sister metal, palladium, are key components in car exhaust filters.
Gold for December delivery, the most actively traded contract, fell 0.5 per cent to $US1,215.40 a troy ounce on the Comex division of the New York Mercantile Exchange, its lowest close since December 31, 2013……………………………………….Full Article: Source

Nothing new about bank commodity exits, history shows

Posted on 26 September 2014 by VRS  |  Email |Print

The recent exodus of banks from the commodities business is not a first. Alexander Osipovich looks back at the turbulent history of banks quitting the commodity markets, only to come piling back in a short time later. It’s tough being a bank in the commodity markets nowadays. Over the past 18 months, many US and European financial institutions have either shut down or significantly scaled back their commodity units, including some firms only recently regarded as titans of the business, such as JP Morgan, Barclays and Deutsche Bank.
The trend has raised questions as to whether banks have any future in commodities at all. But a quick review of recent history shows plenty of episodes where they retreated from commodities, often to jump back in a few years later once market conditions changed………………………………………..Full Article: Source

Pressure on gold market as dollar strengthens

Posted on 26 September 2014 by VRS  |  Email |Print

The gold market is trying to take a stand following recent weakness. Thus far, the gold market has bottomed out around the $1210 level. The market does, however, appear headed towards another retest of the $1185-$1200 areas. The gold market has held this area on two occasions already in the last year or so, but may not be able to take the pressure another time around.
A breach below this area could potentially ignite a new, significant leg lower in gold prices. Of importance is the fact that gold is in the midst of completing a large descending triangle. A break down out of this technical pattern could potentially see gold fall another $200 from current levels………………………………………..Full Article: Source

Platinum and palladium struggle despite positive fundamentals

Posted on 26 September 2014 by VRS  |  Email |Print

Platinum and palladium prices continue to struggle amid a dwindling precious metals market, despite support from strong fundamentals that should be driving the price upwards, particularly in palladium.
Palladium is currently trading amongst near-perfect fundamentals, the market remains in a deficit for the third year running, major strikes across South Africa this year, no new mining facilities online and demand from China climbs higher as the country looks to meet emissions targets in auto catalysts. However, spot palladium dropped below $800 today, continuing on the downside to the lowest level since April. ……………………………………….Full Article: Source

Too early for OPEC to decide on slashing output: UAE Energy Minister

Posted on 25 September 2014 by VRS  |  Email |Print

It is too early for OPEC countries to make a decision on lowering the organization’s output target, United Arab Emirates Energy Minister Suhail Al-Mazroui told reporters on Tuesday, despite oil prices falling below the critical 100 US dollar per barrel mark in recent months amid weak global demand and steady supply boosted by the US shale oil boom.
Speaking at a news conference in Abu Dhabi, Mazroui said it was “premature to decide” on lowering the group’s output in order to stabilize prices, saying OPEC would “meet to discuss and agree on measures” in November. This comes one week after OPEC Secretary-General Abdullah Al-Badri said the group would discuss lowering its daily output of 30 million barrels per day (bpd) by 500,000 bpd during its November meeting………………………………………..Full Article: Source

Gold: The Bewitching Hour Of A Triple Bottom Nears

Posted on 25 September 2014 by VRS  |  Email |Print

The last time gold sparkled was in the summer of 2011 when an all-time record of $1900/oz was achieved. Alas since then it has been a torturous journey as gold prices has trekked south arriving at today’s price of $1216/oz, registering a loss of 36%. However, for the year to date gold is still trading above its low of $1180/oz as it grimly hangs on to a modest gain of 3%.
The question we face now surrounds gold’s direction; will it test the previous low of $1180/oz and bounce to higher levels or will it penetrate this support level and set the stage for sub $1000/oz gold prices………………………………………..Full Article: Source

Energy Economist: The shifting fundamentals of commodity demand

Posted on 24 September 2014 by VRS  |  Email |Print

Economic growth in emerging markets has driven energy commodity demand over the last decade, but that growth is now slowing. According to the IMF, GDP growth in emerging markets fell from 7% a year on average in 2003-2008 to 6% in 2010-13.
The Fund forecasts that emerging market growth will dip further to 5% from 2014-2018. The medium-term outlook is no better. The IMF writes: “In the past, we expected growth to bounce back (and it did). This time seems different.” One of the expected spillover effects is lower commodity prices. Despite ongoing conflicts in the Middle East and North Africa, the supply/demand balance in the oil market continues to look increasingly bearish………………………………………..Full Article: Source

All Eyes On Kenya: The Next Big Oil Exporter

Posted on 24 September 2014 by VRS  |  Email |Print

Not even the specter of a spillover of Islamic extremism from Somalia can dampen the atmosphere in Kenya, where commercial oil production is expected to begin in 2016 and discovery after discovery has made this the hottest and fastest-paced hydrocarbon scene on the continent.
When it comes to new oil and gas frontiers, today it’s all about Africa. And more specifically, it’s all about the eastern coast, with Kenya the clear darling–not just because it’s outpacing neighboring Uganda by leaps and bounds, but also because despite some political instability hiccups and the threat of militant al-Shabaab, it’s still one of the safest venues in the region………………………………………..Full Article: Source

Silver Reached A New Low - What Is Next?

Posted on 24 September 2014 by VRS  |  Email |Print

The silver market cooled down again last week. Last week’s FOMC meeting may have provided the fuel to drag down the price of silver to its lowest level in recent years. Let’s examine the latest developments in the silver market and see what’s next for this precious metal.
During the previous week, the price of silver decreased by 4.13% to reach $17.79 - its lowest level since 2010. The silver ETF, iShares Silver Trust, also tumbled down by 3.9%. Silver related companies, including Silver Wheaton and Pan American Silver also fell by 7% and 4.8%, respectively………………………………………..Full Article: Source

World Steel output surges 1.4% in Aug, India sees 5.2% growth

Posted on 24 September 2014 by VRS  |  Email |Print

India’s steel production witnessed an increase of 5.2% in August compared to the same month 2013. In August 2014, India produced 7.0 Mt of crude steel against 6.6Mt in August 2013, World Steel Association said. World crude steel production for the 65 countries reporting to the World Steel Association (worldsteel) was 135 million tonnes (Mt) in August 2014, an increase of 1.4% compared to August 2013.
China’s crude steel production for August 2014 was 68.9 Mt, up by 1.0% compared to August 2013. Elsewhere in Asia, Japan produced 9.3 Mt of crude steel in August 2014, an increase of 2.2% compared to August 2013. South Korea produced 5.3 Mt of crude steel in August 2014, up by 8.0% on August 2013………………………………………..Full Article: Source

Commodities Drop to 5-Year Low in Capitulation to China

Posted on 23 September 2014 by VRS  |  Email |Print

Commodities extended declines to a five-year low on speculation that a stronger dollar and signs of slowdown in China will curb demand for raw materials. The Bloomberg Dollar Spot Index has climbed for the past five weeks and Chinese data from industrial production to manufacturing was below economists forecasts.
“We’re seeing a kind of mental capitulation by investors,” Jon Bergtheil, an analyst at Citigroup Inc. in London, said by telephone today. “The fundamentals are getting worse. The strong dollar because commodities are measured in dollars is normally bad news for commodities.”……………………………………….Full Article: Source

Gold eyes 1175 as USD does it like 2005

Posted on 23 September 2014 by VRS  |  Email |Print

Gold’s 10% decline to fresh 8-month lows from its July highs and its 16% drop from its August 2013 highs, and intensified in late August as the end of the Fed’s QE3 became inevitable. The simultaneous rally in bond yields and the US dollar since early September helped accelerate gold’s downward momentum below $1270 to reach a new low for the year at $1208. Considering the US dollar is rallying in ways not seen since 2005, gold weakness is here to stay.
The current dollar momentum continues to show signs of a rally not seen since 2005. Why 2005? Back then, the US dollar index, as measured by the 6-currency basket of EUR, JPY, GBP, CAD, CHF & SEK, rallied against each of those two currencies, particularly the Japanese yen………………………………………..Full Article: Source

Zinc Reaches For The Sky in The Months Ahead

Posted on 23 September 2014 by VRS  |  Email |Print

My goal is to keep readers ahead of the curve in the commodities markets. Several months ago, I told readers that zinc would be the next base metals superstar. Sure enough, The Wall Street Journal just reported that zinc is trading at a three-year high – nearly $2,400 per metric ton, or $1.10 per pound.
The best part is that all signs are pointing to a continued rise. Ultimately, zinc is a classic tale of supply and demand, and there are a few companies that appear to be the heroes of this story………………………………………..Full Article: Source

China’s slowing economy and stronger dollar signal end of the ‘iron age’

Posted on 22 September 2014 by VRS  |  Email |Print

Investors in mining and physical commodities should be adjusting their portfolios. Like the cavalry charging over the hill at the last moment, commodity traders are praying that China’s government will come to the rescue of flagging prices with more economic stimulus measures designed to boost the world’s biggest consumer of industrial raw materials.
A meagre rally in iron ore prices at the beginning of last week, on the back of a rumour that China’s steel smelters were back in the market restocking their store yards, petered quickly. Iron ore closed the week trading at $81.70 per tonne and is down 40pc this year at levels some mining companies will struggle to absorb………………………………………..Full Article: Source

Commodities slump to five-year low

Posted on 22 September 2014 by VRS  |  Email |Print

Commodities slumped for a third week in a row to their lowest level since July 2009 as economic data pointed towards continued weakness in China. Meantime, the US Federal Reserve is continuing on track towards the beginning of normalising rates sometime next year. In Europe, the European Central Bank began its long-term refinancing operation (LTRO) while the biggest ever IPO, Alibaba, hit the market.
Scotland went to the polls and chose not to separate from the rest of the United Kingdom. This returned the focus on the dollar, which resumed building on its current positive momentum. The current divergence between Europe and Japan versus the US has resulted in the dollar rising for a tenth straight week, which, according to Bloomberg, is the longest rally since 1967. ……………………………………….Full Article: Source

With LNG Export Battle Won, Are Oil Exports Next?

Posted on 22 September 2014 by VRS  |  Email |Print

Building on its success in getting the U.S. government to approve exports of natural gas, the oil and gas industry has moved on to the export of crude oil. To be sure, the campaign has been underway for quite a while. The four-decade old ban has been under attack over the past year because of the glut of oil that has come onto the market.
Increased supplies in places like North Dakota and Texas have led to a significant price discount between the Brent benchmark, which largely reflects international prices, and the West Texas Intermediate (WTI) benchmark based in Cushing, Oklahoma………………………………………..Full Article: Source

Rather than boon for Japan, U.S. shale oil is still rip-off

Posted on 22 September 2014 by VRS  |  Email |Print

The oil industry in the United States is booming with the shale gas revolution — a major technical breakthrough for extracting oil and gas trapped within shale formations. This led President Barack Obama on June 24 to lift the 39-year-old ban on petroleum exports.
In August, Cosmo Oil Co. of Japan started shipping shale oil to Japan from the U.S. Gulf of Mexico coastal area. Volume is expected to reach 300,000 barrels in October. Thereafter, Japanese trading firms will fall in line, boosting the volume to half a million barrels per month………………………………………..Full Article: Source

Precious metals may get more precious regardless of price

Posted on 22 September 2014 by VRS  |  Email |Print

The silver market is always one day from panic. The same could be said for the bond market or the dollar. In the age of electronic price discovery and massive reckless monetary imbalance anything can happen - and it probably will.
It will happen whether by virtue of just in time delivery practices of the user or the massive (and very real short) concentration within the large commercial category of traders on the most important world price discovery exchange. The lower the price, the less produced; from mining to scrap recycling. It gets worse because the expectations of the future are distorted by the fictions of the present………………………………………..Full Article: Source

Morgan Stanley: A Top Brokerage Getting Back Into Commodities

Posted on 22 September 2014 by VRS  |  Email |Print

Morgan Stanley has quietly working on plans to build and manage one of the first compressed natural gas export facilities in the U.S. The move marks the bank’s re-entry into the physical commodities business. It has a 23 page app filed with the Office of Fossil Energy at the Department of Energy. It’s hoping to build operate a facility for compression and containment of nat gas in Texas. Its capacity could be up to 60 billion cubic feet of CNG annually.
This is Morgan Stanley’s attempt to take advantage of its grandfather position as one of the only two Wall Street banks — the other being Goldman Sachs — to be permitted to own/operate manufacturing and storage infrastructure dedicated to raw materials………………………………………..Full Article: Source

What shipping can tell us about the global economy

Posted on 19 September 2014 by VRS  |  Email |Print

Global trade remains a key economic indicator, but don’t believe everything you read. The economy is recovering, Right? Look at the latest government data, and it’s not entirely clear. The Labor Department in September reported disappointing growth in employment, but other surveys for the same period said the labor market was strong.
Similarly, GDP declined an alarming 2% in the first quarter, but the report was so full of statistical noise that the market mostly ignored it. In the following quarter it beat estimates, but no one’s exactly sure whether that’s because of genuine economic gains or something else—for example, the weather improved……………………………………..Full Article: Source

Oil-Price Quirk Sends Crude Out to Sea

Posted on 19 September 2014 by VRS  |  Email |Print

Big oil companies and traders are stashing millions of barrels of crude on massive tankers bobbing in the ocean, in a bid to profit from a quirk in oil markets. Instead of moving crude from one port to another, a growing number of tankers are serving as floating warehouses for companies including Sinopec Ltd. and Vitol Group, according to people with knowledge of their operations.
Other companies such as Mercuria Energy Group are using the tankers to haul crude to on-shore storage facilities, these people said. In a rare split, crude is cheaper in the spot market than in the futures market, where bets are made on where prices will be in the months ahead. By buying physical stocks of oil and immediately selling futures, traders can lock in a profit……………………………………..Full Article: Source

Will gold face another downward move?

Posted on 19 September 2014 by VRS  |  Email |Print

For all the anticipation surrounding the delivery of the Fed’s statement in the run-up to the September meetings, not much has changed. Ms. Yellen seemed to sound as dovish as ever and she played down the threat of any chasm emerging between FOMC participants. The market continues to feel that the Fed will be forced into raising interest rates sooner-rather-than-later, which is keeping a bullish trend intact for the U.S. dollar.
It is generally trading higher against most major alternatives with the exception of the British pound as the Scots go to the polls to determine whether they should remain part of the 307-year old Union. In the current environment, even as the Fed holds a steady hand on the wheel, commodity prices are suffering. Gold prices are fading in response to the manner in which bond traders sense the Fed will have to throw the towel in on holding rates steady……………………………………..Full Article: Source

Palladium market will witness record deficit this year: Barclays

Posted on 19 September 2014 by VRS  |  Email |Print

The palladium market is poised to deliver a record deficit this year and the market is likely to remain in deficit next to the magnitude of 811koz, according to a Barclays report. The prices are likely to average $850/oz in the final quarter of this year and $890/oz next year, the report said.
The report says price correction is likely to be short-lived for palladium for three reasons. First, despite the largest daily ETP outflow, prices have remained resilient. Second, Russian shipments into Switzerland have eased again after the pickup earlier in the year. Third, underlying auto demand looks robust……………………………………..Full Article: Source

Commodities Alone Can’t Determine Economic Success In Emerging Markets

Posted on 18 September 2014 by VRS  |  Email |Print

Fixed-income investors often divide emerging markets into commodity exporters and commodity importers. We think this overlooks an important reality: commodity wealth is not the sole — or even the most important — driver of EM performance.
It’s certainly true that a decade of increases in energy, metal and agriculture prices have swelled national incomes in commodity-rich countries in Latin America, Europe, Africa and Central Asia. As expected, commodity-rich countries such as Venezuela and Russia saw a boost in their terms of trade — the relative difference between import and export prices — and, consequently, their real income. Turkey, South Korea and other commodity-dependent countries, on the other hand, took a hit…………………………………….Full Article: Source

Barclays Cuts 2014 and 2015 Gold Price Forecasts

Posted on 18 September 2014 by VRS  |  Email |Print

Barclays plc has reduced its Q4 gold price forecast to $1,220 per ounce. For the whole of 2014, the firm believes gold will average $1,270. In 2015, Barclays sees the price of the yellow metal averaging just $1,180.
Barclays bearish view on gold is linked to rising rates and the dollars strength. ‘Rising rates and a significantly stronger dollar present headwinds, which are set to overwhelm any seasonal strength in physical demand this year,’ said Barclays’ analyst Suki Cooper…………………………………….Full Article: Source

China will Dominate the Gold Market

Posted on 18 September 2014 by VRS  |  Email |Print

Back in the maritime age, sailors referred to the equatorial waters of the Atlantic and the Pacific as the ‘doldrums’. It’s where the prevailing winds remained calm and the sun hot and humid. Ships would float aimlessly for days or weeks on end.
For the past few months, asset markets have been in the doldrums too. But now they’re coming out of the languid zone. The trade winds are picking up… I’ll look at where the winds are coming from in a moment. But first, a few things you might be interested in………………………………………Full Article: Source

Global oil demand sinks but lower Australian dollar pushing up the price of fuel

Posted on 17 September 2014 by VRS  |  Email |Print

The falling Australian dollar may be good news for exporters, but it will drive up the price of fuel. After hitting a 15-month low earlier in September, petrol and diesel prices are expected to head upwards, despite a much lower oil price on the back of rapidly dropping demand.
The International Energy Agency has described the sudden drop in global demand as nothing short of remarkable. Forecaster OPEC has recently cut its forecast and says output will exceed demand by more than one million barrels a day by 2015………………………………………Full Article: Source

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