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Commodities Briefing - Category | Market Moves more

World’s biggest coal terminal to review 2015 goal on power cut

Posted on 04 April 2014 by VRS  |  Email |Print

South Africa’s Richards Bay Coal Terminal is reviewing export targets for 2015 after a power cut in February forced it to reduce this year’s goal, the head of the world’s largest standalone export facility for the fuel said.
RBCT trimmed its forecast for shipments this year to 73 million metric tons from 75 million tons after it had to halt operations for almost 10 days in February because of faults on municipal power cables that cut supply, Chief Executive Officer Nosipho Siwisa-Damasane said. While it cleared the backlog by March 31, the facility, together with exporters and Transnet SOC Ltd., the state-owned ports and rail utility, faces losses of about 2.1 billion rand ($197 million)………………………………Full Article: Source

ILZSG: Global zinc, lead markets to be in deficit again in 2014

Posted on 04 April 2014 by VRS  |  Email |Print

Demand is expected to continue to outstrip supply in the global markets for zinc and lead in 2014, the International Lead and Zinc Study Group said Thursday. The group, which met in Lisbon, Portugal this week, said the world market for refined lead metal will remain in modest deficit with the extent of the shortage estimated at 49,000 metric tons.
It added that global demand for refined zinc metal will likely exceed supply in 2014 by 117,000 tons. The ILZSG expects that global demand for refined lead metal will increase by 4.4% in 2014 to 11.73 million tons. “This will be driven mainly by growth in China where usage is forecast to increase by 7.4%,” it said. In 2013, China accounted for 45.2% of total global lead usage………………………………Full Article: Source

IMF boss Lagarde warns economy ‘too weak for comfort’

Posted on 04 April 2014 by VRS  |  Email |Print

The global economy could be heading for years of “sub-par growth”, according to the head of the International Monetary Fund (IMF). Christine Lagarde warned that without “brave action” the world could fall into a “low growth trap”.
She said the global economy would grow by more than 3% this year and next, but that market volatility and tensions in Ukraine posed risks. Ms Lagarde also urged more action to tackle low inflation in the eurozone……………………………..Full Article: Source

IMF warns of economic impact of Ukraine, other crises

Posted on 03 April 2014 by VRS  |  Email |Print

International Monetary Fund Managing Director Christine Lagarde warned today that the political crisis around Ukraine poses a danger to the broader world economy. In a speech in Washington, Lagarde said global growth five years after the Great Recession “remains too slow and weak” and faces multiple threats.
For one, low inflation, especially in Europe and Japan, are dangers for demand and output and consequently jobs, Lagarde said at the Johns Hopkins University School of Advanced International Studies. A second key threat is high corporate leverage in emerging economies, which if not adequately addressed will be worsened by the turmoil from eventual monetary tightening in advanced economies, especially the United States…………………………………Full Article: Source

Gold to hit new highs after 2014

Posted on 03 April 2014 by VRS  |  Email |Print

For the first time in three days the gold price rose this morning, on the back of hope that the low price will spur gold buying in China. Also, for the first time in the last week gold for immediate delivery in Shanghai traded at a premium to London. This suggests that the downside in gold is protected somewhat by expected demand in China.
Another reason for gold’s weakness this week is the impending March non-farm payroll data, due for release on Friday. Forecasts so far expect the U.S. Labor department to announce 200,000 new jobs were added last month…………………………………Full Article: Source

Is the bull phase of the commodity super-cycle over?

Posted on 02 April 2014 by VRS  |  Email |Print

Many investment banks, with Goldman Sachs among them, say that the bull phase of the commodity super-cycle is over. Commodity super-cycles generally last 30 to 40 years. There is an initial 15 to 20 year phase where demand outstrips supply, and a later 15 year phase where supply outstrips demand.
In the first phase of the current commodity cycle, many metal, energy, and agricultural commodities have doubled in price since 2000. Over the past several years, however, prices have been, at best, range-bound. This has led to many market pundits declaring that the bull phase of the commodity super-cycle is over. So what’s causing prices to stay range-bound, and are there any compelling reasons to own commodity producers?…………………………Full Article: Source

Japan traders seen returning $3 bln on commodities fall

Posted on 02 April 2014 by VRS  |  Email |Print

The commodities boom is over and you can have some money back. For investors in Japan’s biggest trading houses, Mitsubishi Corp. and Mitsui & Co., the payoff in dividends and stock buybacks could be as much as 300 billion yen ($3 billion) in the financial year beginning today, according to analysts who follow them.
As the China-led, decade-long rally in commodity prices fades, the traders have been left with excess cash and the need to boost their attractiveness to investors………………………….Full Article: Source

OPEC March oil output falls in survey led by Angola, Libya drops

Posted on 02 April 2014 by VRS  |  Email |Print

OPEC crude oil production dropped in March, led by declines in Angolan and Libyan output, a Bloomberg survey showed. Production by the 12-member Organization of Petroleum Exporting Countries slipped by 117,000 barrels a day to an average 30.293 million from 30.41 million in February, according to the the survey of oil companies, producers and analysts.
Last month’s total was revised 533,000 barrels a day higher because of changes to the Saudi Arabian, Iranian, Iraqi and Nigerian estimates………………………….Full Article: Source

US oil boom takes punch out of Putin on world crude prices

Posted on 02 April 2014 by VRS  |  Email |Print

The next move for world oil prices is likely lower, as growing U.S. oil supplies outweigh some of the impact of the geopolitical tensions surrounding Ukraine. The U.S. oil boom is having a bigger impact on world oil prices, and now the release of more crude via the southern leg of the newly opened Keystone pipeline running from Cushing, Okla., to Port Arthur, Texas, is creating a gusher of new supply in the Gulf Coast.
“I’m pretty bearish crude prices because I see there’s a significant amount of supply out there, and I suspect U.S. supply is going to continue to grow through the course of the year,” said Andrew Lipow, president of Lipow Oil Associates. “I suspect by the end of the year, we’ll be producing close to 9 million barrels a day.”…………………………Full Article: Source

How mining companies have underperformed commodities markets

Posted on 02 April 2014 by VRS  |  Email |Print

Mining companies, providing basic materials to fuel economies around the world, are unquestionably valuable economic contributors. But despite widespread demand for their products, mining companies may not be good investments for some investors. A common belief is that owning these companies gives shareholders exposure to growing commodities markets, a close proxy for the expanding global economy.
But in reality, mining companies’ profits don’t always track price gains in commodities markets, given the unpredictable operating costs and ongoing capital expenditures of running a mining business………………………….Full Article: Source

Latin America’s economies: Life after the commodity boom

Posted on 28 March 2014 by VRS  |  Email |Print

One morning last month Louis Dreyfus, a big commodity-trading house, formally opened a new $10m storage depot in the Peruvian port of Callao. Two of its six bunkers were piled high with 55,000 tonnes of fine brown dust covered by white tarpaulins—copper and zinc concentrate, awaiting blending and shipment.
The warehouse is “a bet that Peruvian mining will continue to be competitive,” says Gonzalo Ramírez, a Dreyfus manager. That looks like a sound wager. Blessed with high-grade ores and cheap energy, Peru’s output of copper—already the world’s third-largest—will more than double in the next three years, thanks to the opening of several low-cost mines……………………………..Full Article: Source

Why commodities are sending the stock market mixed signals

Posted on 28 March 2014 by VRS  |  Email |Print

Early Thursday, the Dow Jones Industrials managed to claw back some of the ground it lost yesterday, with the average rising 17 points as of 10:45 a.m. EDT. Mixed economic data set the stage for a choppy morning for the market, with new claims for unemployment benefits falling to their lowest levels of the year, but a 0.8% drop in pending home sales contracts in February offseting some of the enthusiasm.
From a longer-term perspective, though, the Dow Jones Industrials haven’t yet demonstrated their ability to break out to new highs, and investors are looking to other markets for clues on where the Dow and the broader stock market could go next………………………………Full Article: Source

OPEC to cut exports on lower Asian demand, Oil Movements says

Posted on 28 March 2014 by VRS  |  Email |Print

The Organization of Petroleum Exporting Countries will curtail exports through mid-April in response to lower seasonal demand from refiners in Asia, according to tanker-tracker Oil Movements.
OPEC, responsible for 40 percent of global oil supplies, will reduce shipments by 620,000 barrels a day, or 2.5 percent, to 23.78 million a day in the four weeks to April 12, the researcher said in an e-mailed note. The figures exclude two of OPEC’s 12 members, Angola and Ecuador………………………………Full Article: Source

2014 a good year for commodity bulls, so far

Posted on 27 March 2014 by VRS  |  Email |Print

If you were betting on the price of most commodities going up this year, your bet has likely paid off. Clashes over Crimea and drought in Brazil helped send prices of commodities from wheat to zinc higher in 2014 so far.
Out of roughly 27 active contract commodity markets tracked by analysts at Citi, close to two thirds increased in value during the first quarter to date, while fewer than 10 saw (mostly) marginal declines. As an asset class, commodities have done better than most other asset classes, after two years of underperformance, according to Citi…………………………………Full Article: Source

China’s commodity speculation: From copper to gold

Posted on 27 March 2014 by VRS  |  Email |Print

Investors should always be cautious about recommendations from Goldman Sachs. There is a saying on the Street: The firm always takes the other side of the trade it is recommending to clients, as it did with subprime mortgages.
Now, Goldman thinks it’s a good idea to sell gold. “We see potential for a meaningful decline in gold prices … and reiterate our year-end $1,050 gold price forecast,” reads a recent report. In yet another report, Goldman digs into the mystery of Chinese commodity speculation and comes to the same conclusion. However, the logic is unsound…………………………………Full Article: Source

Obama moves to wean Europe off Russian oil and gas

Posted on 27 March 2014 by VRS  |  Email |Print

Barack Obama pitches the US as a source of energy that would weaken the European Union’s dependence on Russia for oil and gas “in the light of what’s happened”. In response to the Russian annexation of Crimea, many European leaders have been torn between the desire to impose sanctions whilst also being heavily dependent on Russian energy exports.
On Wednesday, President Obama met with EU leaders to discuss exporting US natural gas to Europe, which could be an alternative to Russian exports…………………………………Full Article: Source

Gold bullion the only global meltdown safeguard, says asset allocator

Posted on 27 March 2014 by VRS  |  Email |Print

The only way to hold gold in a portfolio is through physical gold kept close by rather than listed gold, according to Panthera Solutions’ Markus Schuller. Schuller, a recent guest speaker at Citywire’s Zurich and Geneva fund selector events, said investors should also steer clear of gold ETFs as access to the precious metal would become difficult in the event of another financial meltdown.
He told Citywire: ‘Gold is usually pitched as great inflation hedge, which is not backed by empirical evidence, at least not in the sense of seeing a rising gold price as soon as inflation starts rising.’………………………………..Full Article: Source

Copper sends bad news

Posted on 27 March 2014 by VRS  |  Email |Print

Dr. Copper is signaling that more danger is ahead. Copper, which is consumed for a wide variety of uses including manufacturing and construction, is said to have a Ph.D. in economics because of its ability to forecast economic activity. Hence the Dr. Copper moniker.
When prices of the red metal drop it often presages slower economic activity and lower stock prices. Benchmark contracts for copper have tumbled from around $3.38 a pound at the beginning of the year to about $3.00 recently. But that’s only part of the story…………………………………Full Article: Source

Why nickel may be just beginning a major breakout move

Posted on 26 March 2014 by VRS  |  Email |Print

Governments around the world especially in the emerging economies are now beginning to worry about inflation and currency devaluation. Turkey and India have taken emergency measures to increase rates and the U.S. is tapering as there are growing concerns about significant declines in their respective fiat currencies.
Even the Russians and Chinese are concerned. The ruble and yuan are hitting new lows. Paper currencies may be on the verge of failing. Eventually, a new currency backed by gold or silver could be established to restore trust……………………………….Full Article: Source

Farming in America: ‘There’s a growing discontent’

Posted on 24 March 2014 by VRS  |  Email |Print

It’s not easy being a farmer in the U.S. these days and it’s bound to get harder, say those who should know. “There’s a growing discontent among the farming community,” said John Kempf, a fruit and vegetable farmer in northeast Ohio.
“We have a farming model now that is antagonistic to the enjoyment of watching seeds grow and seeing a new born animal,” said the 26-year-old Kempf, who is chief executive of Advancing Eco Agriculture, a farming and crop nutrition consulting company………………………………………..Full Article: Source

Shale Oil plays to become economical on new technology infusion: Barclays

Posted on 24 March 2014 by VRS  |  Email |Print

High capital expenditure, lesser productivity has caused oil majors in shale plays to complain of diminishing returns to capital. Barclays said in a report that technological breakthroughs could help make the projects more economical.
“Service companies outlined major technological breakthroughs, some of which are already commercialised or will be commercialised in the next two years. Schlumberger is focusing on making the fracturing process more efficient…Technologies including BroadBand and HiWAY will help improve recovery rates by improving how operators target the most productive parts of the wellborne which will improve the economics,” Barclays report said………………………………………..Full Article: Source

Funds defy Goldman as gold bears thank Yellen: Commodities

Posted on 24 March 2014 by VRS  |  Email |Print

Goldman Sachs Group Inc. and Societe General SA can thank Janet Yellen for helping to get their bearish forecasts for gold back on track.
After hedge funds piled into the precious metal this year with the most bullish bets in 16 months, defying the predictions of lower prices by Goldman and SocGen, gold tumbled last week by the most since November as Federal Reserve Chair Yellen said economic stimulus could end this year, with interest rates starting to rise in early 2015………………………………………..Full Article: Source

Palladium rises on Russian supply fears

Posted on 24 March 2014 by VRS  |  Email |Print

Palladium prices have jumped to their highest level in two years on fears that top exporter Russia will retaliate against US sanctions by cutting exports of the precious metal.
Palladium for June delivery, the most actively traded contract, rose as much as 3 per cent, or $US24, to $US800 a troy ounce on the New York Mercantile Exchange, its highest level since September 2011. The contract closed at $US789.30 an ounce………………………………………..Full Article: Source

Copper revival likely on strong China power grid spending in 2014: Barclays

Posted on 24 March 2014 by VRS  |  Email |Print

With China power grid spending showing strong growth of 22% year-on-year the first two months of 2014, investors worried over fallng prices could see some recovery in demand and improved market sentiments, according to Barclays.
Once the new grid investments translates into orders, copper consumption could improve and offset some of the losses from property sector, the report said………………………………………..Full Article: Source

How to play the rising cost of commodities

Posted on 21 March 2014 by VRS  |  Email |Print

Scientists have uncovered evidence of the Big Bang and “cosmic inflation” in recent experiments at the South Pole. But the average American doesn’t have to be an astrophysicist to find proof of cosmic inflation. All they have to do is look at their grocery budget.
Food prices are soaring, as ugly weather in California and South America wreaks havoc on harvests. If you’ve been watching the fast-moving commodity markets lately and you’re looking to get a piece of the action in agriculture — or if you’re just an investor looking to hedge your portfolio against the volatility — thankfully there are many ways to play these recent trends. And most of them fit comfortably in the typical brokerage account or IRA………………………………………..Full Article: Source

OPEC to cut exports to lowest in two months, Oil Movements says

Posted on 21 March 2014 by VRS  |  Email |Print

The Organization of Petroleum Exporting Countries will cut crude exports to the lowest level in two months as refiners around the world conduct seasonal maintenance, according to tanker-tracker Oil Movements.
OPEC, responsible for 40 percent of global oil supplies, will reduce shipments by 620,000 barrels a day, or 2.5 percent, to 23.74 million a day in the four weeks to April 5, the researcher said in an e-mailed note………………………………………..Full Article: Source

How Obama could beat Putin playing energy geopolitics: Gas and oil are at the center of the struggle

Posted on 21 March 2014 by VRS  |  Email |Print

The White House’s first round of “sanctions” announced Monday against 11 individuals involved in Russia’s recent actions in Ukraine and Crimea evoked gales of laughter in Moscow, according to news reports. An embarrassed President Obama made a second try with additional penalties on Thursday.
Of course, President Obama’s defenders are quick to point out that our options in this case are limited. Certainly that is true of potential military steps. There is one alternative that could be a game changer, though: wielding the energy weapon against Russia, a country that has not hesitated to use that weapon to advance its own interests………………………………………..Full Article: Source

Platinum coming out ahead

Posted on 21 March 2014 by VRS  |  Email |Print

This year is turning out to be a great one for platinum group of metals. New sanctions placed on Russia, the world’s largest producer of palladium, may see interruptions in the shipments of the metal, putting further pressure on an already tight supply.
Given the metal is a key component in the auto industry, analysts are concerned that Russia may react to sanctions by restricting supply of palladium putting pressure on the United States’ car industry………………………………………..Full Article: Source

J.P. Morgan to sell commodities business for $3.5 bln

Posted on 20 March 2014 by VRS  |  Email |Print

J.P. Morgan Chase & Co. has become the latest bank to scale back its commodities business, striking a deal to sell its physical assets and trading arm to Swiss trader Mercuria Energy Group Ltd. for $3.5 billion in cash.
The deal, expected to be completed in the third quarter, marks the largest ever acquisition completed by Mercuria, a closely held company founded in 2004 by Swiss traders Marco Dunand and Daniel Jaeggi that is relatively unknown outside the physical commodities trading industry………………………………………..Full Article: Source

Why JPMorgan is selling commodities business

Posted on 20 March 2014 by VRS  |  Email |Print

Banking powerhouse JPMorgan Chase & Co. has agreed to sell its commodities business to giant Swiss commodities house Mercuria Energy Group Ltd., reports the Wall Street Journal.
JPMorgan, the biggest U.S. bank by assets, initially valued its commodities unit at $3.3 billion back in October 2013, when it first warmed to a potential sale. Terms of the deal with Mercuria aren’t yet public, though the deal could be done by summer, according to sources cited by the Journal………………………………………..Full Article: Source

Banks and commodities never mixed

Posted on 20 March 2014 by VRS  |  Email |Print

J.P. Morgan Chase & Co.’s decision to sell its commodities trading unit ends a chapter of anything-goes banking that dominated the 2000s after the so-called financial modernization laws passed a little over a decade ago.
The bank on Wednesday said it agreed to sell the unit for $3.5 billion cash to Mercuria Energy Group Ltd., the Swiss trading giant. J.P. Morgan’s move follows similar sales or shuttering of commodities units by Deutsche Bank AG , Goldman Sachs Group Inc. and Morgan Stanley to name a few. Exiting what amounted to a more-than-a-decade experiment in the nation’s banking system wasn’t without costs………………………………………..Full Article: Source

Chinese demand for Australian commodities not about to ‘decline drastically’ – Fitch

Posted on 20 March 2014 by VRS  |  Email |Print

China’s stockpiles of iron ore won’t hurt Australian miners, ratings agency Fitch predicts. “The fundamentals underpinning China’s demand for key commodities from Australia remain unchanged,” Fitch wrote on its website this week.
Australian iron ore miners have been struggling with negative market sentiment as iron ore inventory at China’s major ports reached a two-year high, hitting 105 million tonnes as of March 7, 2014. Lower GDP forecasts in China and weak commodity prices have contributed to uncertainty among coal and copper miners as well. China is Australia’s biggest customer for these commodities………………………………………..Full Article: Source

Is fracking the market’s revenge on OPEC?

Posted on 20 March 2014 by VRS  |  Email |Print

Market interference by petro states spurred the energy revolution led by fracking, according to the head of commodities research for Citigroup—and that revolution is bound to spread around the world.
As it spreads, governments will find it more difficult to interfere in energy markets, said Edward L. Morse, the managing director and global head of commodities for Citi. “The irony is that what we see unfolding is a return to market forces,” Morse said during a recent panel discussion in Chicago, “an erosion of the ability of countries to use oil or natural gas as an instrument of foreign policy.”……………………………………….Full Article: Source

How Big Data is relevant to commodity markets

Posted on 20 March 2014 by VRS  |  Email |Print

Everyday we generate enormous amounts of data through transactions in commodity markets. There have been many estimates of the quantity of data generated, the great hype of Big Data in 2014, and how firms should be investing in this area.
I want to take you through the example below and elaborate my perspective on Big Data in relation to commodity markets. Example: Let us consider the case of ethanol production, merchandising, and consumption. Ethanol can be produced petro-chemically or from agricultural feedstock, such as sugar or corn. The decision to produce ethanol is determined by two factors – revenues and costs of the ethanol business………………………………………..Full Article: Source

2 easy ways to add commodities to your portfolio

Posted on 19 March 2014 by VRS  |  Email |Print

Commodities have outperformed stocks since the start of the year, but many investors have not benefited. Why? Because if there’s one category where most investment portfolios are lacking market exposure, it’s probably commodities.
Unless you live on a farm, most of us don’t have enough storage space for 150 barrels of crude oil (USO) or a herd of cattle (COW). Like any asset class, commodities have their advantages and drawbacks………………………………………..Full Article: Source

RBCCM sees gold rally ahead - similar to 2005-2008

Posted on 19 March 2014 by VRS  |  Email |Print

Royal Bank of Canada Capital Markets analysts Dan Rollins in Toronto and Jonathan Guy in London have come up with a detailed analysis of the gold market over the next few years comparing it with the big ETF driven gold price rally of 2005-2008.
Over this period, gold doubled in price from $450 to $900, and while the analysts are not putting exact price predictions into their prognostications, nor coming up with a precise timescale, the implication is there in their research that this could lead to a big gold price increase in the medium to long term………………………………………..Full Article: Source

Nickel bull market on Russian supply fears

Posted on 19 March 2014 by VRS  |  Email |Print

Nickel entered a bull market on speculation Russian supplies will be disrupted at a time when some shipments are already banned in Indonesia.
Last year’s worst performer among industrial metals trading on the London Metal Exchange is this year’s best, gaining 16 percent and on track for the first annual gain since 2010. Prices fell 24 percent in 2011 after touching $29,425 a metric ton in February that year, the highest since April 2008. Indonesia, the biggest producer of mined nickel, banned ore exports in January………………………………………..Full Article: Source

Commodities cushioned from Crimea crisis by ample supply

Posted on 18 March 2014 by VRS  |  Email |Print

Unprecedented natural gas reserves in Europe, record global grain output and the threat of mutual economic calamity from oil sanctions are cushioning commodity prices even as the Ukraine-Russia conflict spurs a gold rally.
While UK gas prices, a European benchmark, rose 5.1 per cent since the crisis began at the end of February, they are still the lowest for this time of year since 2010. Brent crude fell 1 percent. After wheat advanced 15 per cent and corn 4.6 per cent, both remain about a quarter below the peaks in 2010, the last time Russia and Ukraine curbed shipments. Gold reached a six-month high on March 14 as demand for a haven grew………………………………………..Full Article: Source

Gold price moves into important Fibonacci Zone

Posted on 18 March 2014 by VRS  |  Email |Print

Gold is at the highs once again, testing 1380-1400 area where we see some important Fibonacci levels that could react as resistance in this week. An updated count now shows a five wave move in wave (c) of C that is in final stages after recent break out of a running triangle in subwave four.
Keep in mind that on a daily time frame we are still looking at a triangle count where price is now testing important 78.6% retracement level of 1435-1180 move. A reversal down from here back to wave four range could suggest a completed rally for metals………………………………………..Full Article: Source

China’s debt crisis to hit industrial metals

Posted on 18 March 2014 by VRS  |  Email |Print

All the warning signals point to a continuing slide in prices as the full extent of China’s economic problems emerge and bearish sentiment grips commodity trading houses. Investors in vital industrial metals such as copper and iron ore will have their nerves tested again this week after China’s unfolding debt crisis caused volatility on commodity markets.
All the warning signals are now pointing to a continuing slide in prices as the full extent of China’s economic problems emerges and bearish sentiment grips the large commodity trading houses………………………………………..Full Article: Source

Commodities cushioned from Crimea crisis by ample supply

Posted on 17 March 2014 by VRS  |  Email |Print

Unprecedented natural-gas reserves in Europe, record global grain output and the threat of mutual economic calamity from oil sanctions are cushioning commodity prices even as the Ukraine-Russia conflict spurs a gold rally.
While U.K. gas prices, a European benchmark, rose 5.1 percent since the crisis began at the end of February, they are still the lowest for this time of year since 2010. Brent crude fell 0.6 percent. After wheat advanced 15 percent and corn 4.7 percent, both remain about a quarter below the peaks in 2010, the last time Russia and Ukraine curbed shipments. Gold reached a six-month high on March 14 as demand for a haven grew………………………………………..Full Article: Source

Is the U.S. using oil to fight Russian gas politics in Ukraine?

Posted on 17 March 2014 by VRS  |  Email |Print

The U.S. appears to be building pressure on Russia over its actions in Ukraine by releasing crude oil from its emergency stockpile onto the market, with news of a “test sale” causing oil prices to dip to their lowest levels in a month.
The U.S. announced yesterday that it would hold the first test sale of crude from its strategic reserve since 1990, releasing 5 million barrels onto the market — just enough to send a message to Russia, whose economy depends on high oil prices. U.S. crude oil fell by more than 2 percent on Wednesday, its biggest drop in two months, on the news………………………………………..Full Article: Source

Commodity dive no surprise, says Walsh

Posted on 14 March 2014 by VRS  |  Email |Print

Rio Tinto chief Sam Walsh says the market should not be surprised by factors that have sent iron ore prices sliding and he is confident Chinese growth will underpin long-term commodities demand.
And the mining boss has sent a message to his Glencore counterpart Ivan Glasenberg: that the Swiss trader-miner will have to offer more to merge its Hunter Valley coal operations with those of Rio………………………………………..Full Article: Source

The Ukraine crisis is wreaking havoc on commodities

Posted on 14 March 2014 by VRS  |  Email |Print

Tensions in Ukraine have produced extreme volatility across the spectrum of commodities. Wheat prices have seen the greatest surge, up 6% in the past seven days and 24% since hitting a low in January. Ukraine is the sixth-largest wheat exporter in the world. Corn, of which Ukraine is the world’s third-largest exporter, is up 10% over the past 30 days.
“Grain traders are still focusing their attention on developments in Crimea,” Carsten Fritsch, an analyst at Commerzbank AG in Frankfurt, said in a note, per Bloomberg. “In the event of a yes vote, shipment problems could be the result.”……………………………………….Full Article: Source

OPEC boosts oil demand estimate as Iraq pumps most since 1980

Posted on 14 March 2014 by VRS  |  Email |Print

The Organization of Petroleum Exporting Countries (OPEC) bolstered forecasts for the amount of crude it will need to provide this year as the economic recovery stokes global fuel consumption. Iraq, its second-largest member, pumped the most oil since 1980.
OPEC, responsible for 40 percent of the world’s oil supply, said its 12 members will need to produce an average of 29.7 million barrels a day this year, 100,000 a day more than forecast last month. The amount required is about 400,000 barrels a day less than the group said it pumped in February, when output surpassed 30 million a day for the first time since August………………………………………..Full Article: Source

BNP Paribas favors lead, tin, zinc over copper

Posted on 14 March 2014 by VRS  |  Email |Print

BNP Paribas is reiterating its position favoring lead, tin and zinc over copper in the base-metals complex. The bank points out copper fell to its forecast of $6,500 as metric ton even sooner than it expected. BNP Paribas says it still looks for the copper market to move into a “material but far from catastrophic” supply surplus in 2014-15.
The bank says it still has a positive view on demand, looking for growth of more than 10% over the next two years. However, the bank also looks for world mine production to rise by about 10% over 2014-15, with refined production outpacing mine output. The bank says a copper rally above $7,000 likely would present a selling opportunity………………………………………..Full Article: Source

Commodity prices and the China syndrome

Posted on 14 March 2014 by VRS  |  Email |Print

The last month or two has provided a wonderful illustration of why a diversified commodity index is a better investment than an investment in any given commodity. Since mid-February, April Lean Hogs has rallied 23%. Since late January, May Wheat is up 23%. March Coffee is up 80%. Gold is up 9%.
But Crude Oil is 6% off its highs. Copper is 12% off its highs (8% since Thursday). April Nat Gas was up 42% from November through late February, but has lost 10% since then………………………………………..Full Article: Source

OPEC, unlike U.S., raises 2014 global oil demand view

Posted on 13 March 2014 by VRS  |  Email |Print

World oil demand will increase more than expected in 2014, OPEC said on Wednesday, raising its prediction for a second straight month as economic growth picks up in Europe and the United States.
The view on oil demand growth from the Organization of the Petroleum Exporting Countries, source of a third of the world’s oil, contrasts with that of the U.S. government’s Energy Information Administration, which on Tuesday cut its forecast………………………………………..Full Article: Source

OPEC boosts demand estimate as Iraq pumps most since 1980

Posted on 13 March 2014 by VRS  |  Email |Print

OPEC bolstered forecasts for the amount of crude it will need to provide this year as the economic recovery stokes global fuel consumption. Iraq, its second-largest member, pumped the most oil since 1980.
The Organization of Petroleum Exporting Countries, responsible for 40 percent of the world’s oil supply, said its 12 members will need to produce an average of 29.7 million barrels a day this year, 100,000 a day more than forecast last month. The amount required is about 400,000 barrels a day less than the group said it pumped in February, when output surpassed 30 million a day for the first time since August………………………………………..Full Article: Source

China concerns hit commodities, little collateral damage as yet

Posted on 12 March 2014 by VRS  |  Email |Print

Asian markets were set for another tense session on Tuesday as worries about China’s economy continue to reverberate, taking a particularly hard toll on commodity prices.
February’s shock fall in exports from the Asian behemoth has cast a shadow over the global outlook, even as analysts blamed much of the drop on the Lunar New Year holidays. Oil and industrial commodities bore the brunt of the sell-off. Copper futures shed almost 2 percent on Monday, while spot prices for iron ore tumbled over 8 percent………………………………………..Full Article: Source

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