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Here’s Why Geopolitical Chaos Hasn’t Caused Oil Prices To Spike

Posted on 13 August 2014 by VRS  |  Email |Print

Oil markets have been startingly calm in recent months despite unrest in some of the world’s largest oil producing regions. The price of London-traded Brent crude oil is actually down $5 since mid-May.
The reason is that the world doesn’t need as much of the stuff right now - and global production continues to ramp up. Tuesday, the International Energy Agency announced global oil demand growth in Q2 had fallen to 0.7 million barrels a day, the slowest place since Q1 2012………………………………..Full Article: Source

Overview of the Steel & Iron Ore Market in Q3 2014

Posted on 13 August 2014 by VRS  |  Email |Print

The commissioning of new iron ore capacity combined with a dearth of disruptions to supply have boosted availability of cheap iron ore, which has weighed on prices. In most regions, steel prices have remained low because raw material prices have fallen and competition between steelmakers remains active.
The exception is North America where disruptions to steel production and pent-up demand that has built up following weather-related issues in the first quarter have sent prices significantly higher. Still, this has opened the window for imports, which are likely to weigh on prices before too long………………………………..Full Article: Source

Indonesian nickel ban resonates globally

Posted on 13 August 2014 by VRS  |  Email |Print

Indonesia’s ban on nickel ore exports is resonating globally as prices climb to the highest since 2012, prompting companies from Avebury Nickel Mines Ltd. to Poseidon Nickel Ltd. to restart operations at idled mines.
Avebury, based in Perth, plans to reopen a deposit in Tasmania six years after it was mothballed. Poseidon is preparing to resume production at a mine in Western Australia, while Panoramic Resources Ltd. may restart mining at its Copernicus deposit in the same state. More producers globally may reactivate facilities as prices extend gains, according to OAO GMK Norilsk Nickel, the world’s largest supplier………………………………..Full Article: Source

Commodity Price Gains Ease Urgency of Mining Disposals, E&Y Says

Posted on 12 August 2014 by VRS  |  Email |Print

Rising commodity prices in the second quarter of the year strengthened mining companies’ balance sheets, reducing the urgency of their plans to sell unwanted assets, Ernst & Young LLP said.The number of mining mergers and acquisitions declined 41 percent to 112 in the quarter from a year earlier, E&Y said in a report today. The value of the deals was $9.5 billion.
Nickel prices jumped 39 percent in the quarter from a year earlier, aluminum rose 6.7 percent and copper gained 3.9 percent at the London Metal Exchange. The largest mining companies consider divestments as a way of reducing debt, maximizing returns on capital and optimizing their portfolios, the consultants said. Stronger balance sheets have reduced the pressing need for that, according to E&Y……………………………………Full Article: Source

Geopolitical tensions to affect Agri, Energy; Gold to lose resilience: Deutsche Bank

Posted on 12 August 2014 by VRS  |  Email |Print

The current quarter witnessed the worst performance from agriculture and energy and a bright spot in industrial metals. The decline in long time yields shown by precious metals is unlikely to sustain over the medium term, indicating that Gold’s resilience is likely to fade, according to a Deutsche Bank report.
The Russian ban on European and US food is only likely to have a limited impact globally as its direct result will be domestic inflation. The real issue for agriculture will be the excessive rains in France, Germany and Ukraine and their impact on this year’s harvest. The rains have already affected Wheat prices……………………………………Full Article: Source

Economic, Geopolitical Worries Push Gold Up

Posted on 12 August 2014 by VRS  |  Email |Print

Gold rose to two-week highs last week as worries grew over economic weakness in the euro zone and tensions between Russia and the West. The rise in gold continued a rally sparked Tuesday afternoon, when Polish Foreign Minister Radoslaw Sikorski said Russian troops are poised to pressure or invade Ukraine, causing gold prices to reverse losses and head higher in aftermarket electronic trading.
Conflicts in Ukraine and the Middle East have helped buoy gold prices in recent months, even as the market has been weighed down by expectations that the Federal Reserve may tighten monetary policy sooner than expected, according to the Wall Street Journal……………………………………Full Article: Source

Citi still sees opportunity in more regulated, less volatile commodities markets

Posted on 11 August 2014 by VRS  |  Email |Print

Citi is confident that it can run a lucrative commodities business in less volatile, more heavily regulated markets, the bank’s head of commodities sales told Metal Bulletin. Increasing compliance costs and low volatility have together driven margins in commodities banking progressively lower over the past few years and changed the landscape of the sector markedly, Citi’s José Cogullodo said in an interview.
With costs rising and order volumes falling, running a vanilla agency-style commodities brokerage is not an attractive proposition in the post-crisis, post-supercycle environment, he said. In addition, new regulations are prohibiting banks from trying to boost profits by trading commodities for their accounts. In any event, this is becoming less rewarding as commodity prices chop about in narrower ranges, he said…………………………………….Full Article: Source

OPEC Sees Lower 2014 Oil Demand Growth, Pumps More

Posted on 11 August 2014 by VRS  |  Email |Print

OPEC trimmed its 2014 global oil demand growth forecast for a second consecutive month and said the group managed to increase output in July despite violence in Iraq and Libya, pointing to more comfortable global supplies. In a monthly report on Friday, the Organization of the Petroleum Exporting Countries trimmed its projection for growth in global demand this year to 1.10 million barrels per day (bpd), down 30,000 bpd, citing weaker-than-expected U.S. demand.
“The slow and uneven global recovery continues,” OPEC said in the report. In 2014, “U.S. oil demand remains strongly dependent on the development of the U.S. economy, however the risk is skewed to the downside compared to the previous month.”…………………………………….Full Article: Source

Commodity Markets Fight Off Geopolitical Concerns

Posted on 08 August 2014 by VRS  |  Email |Print

The market has fought off geopolitical concerns with the brent crude oil price falling to the lowest level this year. The risk that new sanctions on Russia will constrain the country’s exports of energy, metals and grains is likely to be a latent concern in commodity markets for as long as the conflict goes on.
The global economic recovery is gaining traction. Growth in the Chinese economy has accelerated recently and the US recovery is strengthening. We are therefore optimistic on behalf of the global economy and expect growth above 4% next year………………………………………..Full Article: Source

Investors warm to commodities in search for return

Posted on 07 August 2014 by VRS  |  Email |Print

Global uncertainty, coupled with the strength of the Chinese markets, is leading U.S. investors back into commodities. Investors put more money into commodities ETFs and ETNs in July than they have in any single month over the past two years, according to ETF.com., which provides research on exchange-traded funds and exchange-traded notes.
The lift came as Chinese markets — and, in many cases, the funds tracking them — notched their best gains since late 2012, raising hopes that the world’s second-largest economy will support demand for the industrial metals used to manufacture cars, buildings and consumer electronics bought by the country’s growing middle class………………………………………..Full Article: Source

Are commodities’ days of true diversification behind them?

Posted on 07 August 2014 by VRS  |  Email |Print

The ability of commodities to offer uncorrelated returns has historically given them status as an important diversifier, but has this reputation been irreparably damaged by structural change in the years since the financial crisis?
Before 2009 correlations between commodity prices and stock markets were close to zero, cementing their reputation as reliable portfolio diversifiers. While gold is a more obvious diversifier, other precious metals, industrial metals, oil and agricultural commodities continue to be used to broaden a portfolio’s mix from stock, bonds and cash………………………………………..Full Article: Source

Drums of War Sound for OPEC

Posted on 07 August 2014 by VRS  |  Email |Print

Amid war and rumors of war, it seems odd that oil prices have dropped so far in August. That might be because another war could be brewing: within OPEC. Saudi Arabia on Wednesday released September official selling prices for its oil. It offered bigger discounts for Asian and U.S. buyers compared to August’s levels, while raising prices for Europe.
As energy economist Phil Verleger pointed out in a recent report, this could indicate a growing battle for market share. Rising U.S. shale oil output has caused American imports of oil from West Africa to plummet from an annualized average of two million barrels a day in late 2007 to about 300,000 barrels a day currently. That forces countries such as Nigeria to push their barrels towards other markets, such as Asia—putting them in direct competition with Saudi Arabia and other OPEC members in the Middle East………………………………………..Full Article: Source

Gold Prices Rally on Economic, Geopolitical Worries

Posted on 07 August 2014 by VRS  |  Email |Print

Gold prices rose to their highest level in nearly two weeks on Wednesday, as worries grew over economic weakness in the euro zone and tensions between Russia and the West.
Gold for December delivery, the most actively traded contract, rallied $22.90, or 1.8%, to $1,308.20 a troy ounce, the highest settlement price since July 21. The contract posted the biggest one-day percentage gain since June 19. Italy fell back into recession for the third time since 2008, data showed Wednesday, signaling that the euro zone’s recovery has hit a major stumbling block………………………………………..Full Article: Source

Commodities May Continue Slump Into August, But Buying Opportunities Possible

Posted on 06 August 2014 by VRS  |  Email |Print

July was the worst month for commodities overall since May 2012, and the weak performance is likely to continue into August, market watchers said. But weaker markets can offer buying opportunities for savvy traders, they added.
The S&P GSCI lost 5.3% in July, giving up almost its entire gain for the year, and as of Monday has roughly a flat return year-to-date. According to data released by S&P Dow Jones Indices, one of the worst performers in their indexes was unleaded gasoline, which fell 8.1% in July. This is the fifth-worst July on record since 1988 and is also the worst July since July 2008. The agriculture sector lost 8.7% in the S&P GSCI index, falling to its lowest level since July 2010………………………………………..Full Article: Source

Barings backs resources sector equities over commodities

Posted on 06 August 2014 by VRS  |  Email |Print

Resources sector equities are currently more attractive than direct investments in physical commodities and investors should focus on investing in ‘companies not commodities’ to benefit from an increasing global demand for resources, according to Baring Asset Management (Barings).
The opportunity in resources equities is as strong as it has been for several years, believes Barings. Its positive outlook is based on the size of differential between what it sees as positive company specific drivers versus a negative – often macro driven – consensus view………………………………………..Full Article: Source

Zinc positioning shows investor bullishness

Posted on 06 August 2014 by VRS  |  Email |Print

The shift in investor sentiment that has helped propel the price of zinc to a near three-year high has been highlighted by a new report from the London Metal Exchange that details long and short positioning in industrial metals.
Figures from the exchange’s Commitment of Traders Report, published for the first time on Tuesday, shows money managers held a long position of nearly 135,900 futures contracts in zinc as of August 1 – nearly 30 per cent of open interest, or total number of outstanding contracts………………………………………..Full Article: Source

America’s Oil Export Policy Is Stuck in the ’70s

Posted on 05 August 2014 by VRS  |  Email |Print

The unexpected increase in the production of shale oil, a light oil called condensate and natural gas in the U.S. has upended many assumptions about the U.S. energy market. As the oil and gas bonanza continues, the U.S. ban on crude-oil exports looks increasingly outdated, arbitrary and economically damaging.
With Europe poised to endanger its gas supply by imposing more sanctions on its major supplier Russia, the possibility of energy exports from America takes on an important security dimension too………………………………………..Full Article: Source

Commodities slipping down the asset class league table

Posted on 04 August 2014 by VRS  |  Email |Print

Commodities have slipped further down the league table of asset class performance over the past week. The destruction in returns during July has been concentrated in the agricultural and energy sectors. In the event of signs of a further acceleration in US economic activity, Deutsche Bank expect precious metal returns will be the next commodity sector to suffer declines.
Energy: The rapid decline in crude oil inventories at Cushing helps to explain the tightness in WTI fundamentals. However, this inventory drawdown may draw to a close after the summer as pipeline infrastructure starts bringing additional crude into Cushing. Meanwhile, weak physical demand for crude oil has trumped geopolitical risks and facilitated a recovery in refinery margins in the US Gulf Coast and Northwest Europe………………………………………..Full Article: Source

India Snatching Up Swiss Gold, Silver

Posted on 04 August 2014 by VRS  |  Email |Print

Gold loving India is hoarding Swiss gold, and recently accounted for 42% of total gold and silver leaving Switzerland. According to the Swiss government, its total value of exported gold, silver and coins in the month of June stood at 3.9 billion Swiss franc ($4.3 billion), of which India accounted for 1.63 billion francs ($1.8 billion).
Indian demand for gold has taken overall Swiss exports this year to to 32.1 billion francs. And out of that total, gold exports alone to India hit 7.3 billion francs, or roughly 23% of the market………………………………………..Full Article: Source

India: Forward trades in commodity markets to begin this month

Posted on 04 August 2014 by VRS  |  Email |Print

India’s commodity markets will see the debut of forward contracts later this month, a move termed as an attempt to create a national agricultural market. The National Commodity & Derivatives Exchange Ltd (NCDEX) will launch forward contracts based on two commodities—sugar and maize— by the third week of August after receiving a go-ahead from the commodity market regulator.
Commodity market participants say that the introduction of forward contracts could be a game-changer, as it reduces counter-party risk and keeps out speculators, besides creating a central platform for forward trading in agricultural commodities………………………………………..Full Article: Source

Commodity ETFs: The makings of a perfect partnership?

Posted on 01 August 2014 by VRS  |  Email |Print

Commodity price moves are making headlines again after a relatively quiet period earlier this year. The intensifying crisis in Iraq is fuelling the rise in crude oil prices, the six-month long miners’ strike in South African has pushed platinum and palladium prices higher and gold is also attractive again as a safe-haven buy.
For many investors exchange-traded products (ETPs) are becoming the financial instrument of choice when it comes to commodities as they are easy to trade, they bypass some of the regulatory restrictions linked to futures and they come with relatively low fees………………………………………..Full Article: Source

Oil Majors Pivoting Away from Risky Countries

Posted on 01 August 2014 by VRS  |  Email |Print

The rising tide of political instability around the world is negatively affecting the some of the oil industry’s largest companies, and several are considering withdrawing their investments in risky areas. Violence, government turmoil, sabotage, and economic sanctions are presenting serious challenges to the oil majors, after years of expanding deeper and deeper into some of the least developed parts of the world.
The Wall Street Journal wrote on July 27 about several companies that are pivoting away from troubled regions, and moving towards industrialized countries — willing to assume the higher cost of operating in richer nations as the price for a more stable investment climate………………………………………..Full Article: Source

Russia Risk Seen Prompting BNP Paribas Commodity Bond Prepayment

Posted on 01 August 2014 by VRS  |  Email |Print

Bonds backed by loans made by BNP Paribas SA (BNP) to commodity traders will be repaid early because there’s a shortage of borrowers seeking to finance new shipments amid conflict in the Ukraine, according to Fitch Ratings.
The $131.6 million Lighthouse Trade Finance Issuer I Ltd. notes will be redeemed because of “the shortage of commodity transactions” originated by BNP Paribas’s Geneva office, which focuses on energy commodities sourced from eastern Europe, including Russia, Fitch said in a statement………………………………………..Full Article: Source

OPEC oil output rises in July on fragile Libyan rebound

Posted on 31 July 2014 by VRS  |  Email |Print

OPEC’s oil production rose in July from June, a Reuters survey found on Wednesday, as a fragile recovery in Libyan supply outweighed fighting in Iraq and reduced output from Angola.
Despite the increase, unrest in Africa and the Middle East is still weighing on supply. That could hinder OPEC’s ability to boost output later in the year, when the International Energy Agency expects demand for OPEC crude to rise………………………………………..Full Article: Source

Coal Bed Methane market to reach $17.31 billion by 2020

Posted on 31 July 2014 by VRS  |  Email |Print

The Global CBM (Coal Bed Methane) market is expected to reach $17.31 billion by 2020, growing at a CAGR of 5.9% from 2014 to 2020, according to a new report by GrandView Reseach. Asia Pacific region will become most dynamic regional market with China, India and Indonesia are likely to lead the Asian CBM industry, th e report said.
Global CBM production was 2,920.3 Bcf in 2013 and is expected to reach 4,667.4 Bcf by 2020, growing at a CAGR of 7% from 2014 to 2020. US and Canada are the largest CBM producers, accounting for over 70% of global volume in 2013. US CBM market revenues were estimated at USD 7.22 billion in 2013 and are exoected to grow at a CAGR of 5.4% from 2014 to 2020………………………………………..Full Article: Source

Hedge funds: An industry reborn?

Posted on 31 July 2014 by VRS  |  Email |Print

As a less daunting new breed of fund-of-funds comes to the fore, Charles Stanley’s Kris Barclay examines the pros and cons of their underlying strategies. Markets ebb and flow, as do new investment ideas. Sometimes, the setting of a new trend might seem a new precedent but, all too often, it is just an old idea reinvigorated. Hedge funds are of that order.
These abstract vehicles have been around for many a year and, of course, the basic and original premise was to hedge one’s assets against the stock market falling………………………………………..Full Article: Source

Global economy to expand above trend in H2 2014: PIRA Energy

Posted on 31 July 2014 by VRS  |  Email |Print

NYC-based PIRA Energy Group believes that the global economy will expand at above trend pace in the second half of 2014. In the U.S., products increased and crude stock declined. In Japan, crude stocks built as imports rebounded from storm impacts. Specifically, PIRA’s analysis of the oil market fundamentals has revealed the following:
World Oil market forecast: After a sub-par first half, the global economy will expand at above trend pace in the second half of 2014, led by manufacturing. First half weakness in the economy undermined global oil balances with inventories building back to year ago levels………………………………………..Full Article: Source

Goldman Sees Nickel Rising With Palladium to Beat Soy

Posted on 30 July 2014 by VRS  |  Email |Print

Nickel and palladium are set to outperform iron ore and soybeans as supply outlooks for commodities diverge amid a tentative acceleration in global economic growth, according to Goldman Sachs Group Inc.
The bank kept its 12-month recommendation for commodities at neutral, analysts including Jeffrey Currie wrote in a report dated yesterday. They expect the total return for the Standard & Poor’s GSCI Enhanced Commodity Index to be 0.1 percent in 12 months helped by positive roll yields………………………………………..Full Article: Source

Is The Most Important Commodity About To Break Down?

Posted on 30 July 2014 by VRS  |  Email |Print

Is Crude Oil about to follow in the footsteps of the yield on the bell weather bond and break support? The left chart above highlights that the yield on the 30-year bond is breaking down, below a two-year support line. The right chart highlights that Crude Oil and the yield on the 30-year bond have correlated a little bit over the past couple of years, with the 30-year breaking support.
Could crude oil follow yields and break lower? If they both break support and head lower, what would the macro message be coming from them? If Crude would break 5-year support, traders would expressing some concern about the prospects of global growth………………………………………..Full Article: Source

Saudi Arabia oil and gas market to 2023

Posted on 30 July 2014 by VRS  |  Email |Print

Business Monitor International has released a new report, ‘Saudi Arabia Oil & Gas Report Q3 2014’, in which it indicates the view that crude production in the country will remain elevated by historical standards in 2014 and 2014.
This view is based on continued OPEC outages, a mediocre global supply picture, a continued increase of domestic consumption from the power generation and transport sectors, strong demand from the refining sector and a recovering global demand picture………………………………………..Full Article: Source

Who will run the gold fix next?

Posted on 30 July 2014 by VRS  |  Email |Print

The banks that conduct the century- old gold fixing and the London Bullion Market Association will seek proposals next month for a new administrator to run a revamped process for the benchmark by year-end.
The London Gold Market Fixing Ltd., which manages the procedure, and the LBMA will open a market consultation in late August and plan to announce a third-party administrator by the end of September, the association said in a statement today. The process will be open and not restricted to firms who pitched to run a mechanism that will replace the silver fixing on Aug. 15………………………………………..Full Article: Source

Must-know facts about the silver rally

Posted on 29 July 2014 by VRS  |  Email |Print

First, it’s worth putting silver’s recent rise in context. Here are three important facts about the recent rally. 1. While the metal has had a respectable run over the past month, silver is still playing catch-up after losses earlier this year. Between late February and early June, silver prices fell roughly 15%.
In addition, even with the recent rally, for the first half of the year silver has trailed gold, which has gained nearly 10% versus roughly 7.5% for silver. Prices are based on spot prices for both gold and silver from Bloomberg. 2. The recent jump in silver prices is partly a function of the metal’s volatility. Silver tends to be a relatively thinly traded market………………………………………..Full Article: Source

Fundamentals are driving commodity markets

Posted on 28 July 2014 by VRS  |  Email |Print

Commodities performance in Q2 and in the beginning of Q3 has been a mixed bag. We have the grains and oilseeds plunging into a bear market, rallies in the softs and better returns in energy and precious metals. These commodity asset classes are re-aligning and being driven by their own fundamentals rather than broad macro-economic drivers. A whole range of factors, especially from the supply side including weather, export bans, unplanned outages and geopolitical risk, are starting to have more influence on commodity prices than announcements from the Fed.
The first half of 2014 has also seen a decline in the correlation between commodities and other asset classes. With the current environment of high bond issuance, tight credit spreads and record low volatility in these other asset classes, the higher volatility in different commodity markets is inducing investors to re-look commodities again………………………………………..Full Article: Source

Global markets untroubled by world’s chaos

Posted on 28 July 2014 by VRS  |  Email |Print

The world feels especially scary lately. There has been mayhem in the Middle East, Russia seems on the verge of becoming a rogue state, violence in Central America is driving children to make the harrowing trek to the U.S. border, and much of Asia is bickering over Pacific islands and political dominance. Global politics are rarely this unstable.
Global financial markets, by contrast, are sanguine. The U.S. stock market is at record highs, and markets in most of the rest of the world aren’t far behind. Investors are willing to buy the bonds of financially challenged companies and countries at record low interest rates. Global commodity prices and most currencies, including the U.S. dollar, are steady………………………………………..Full Article: Source

Zinc extends rally

Posted on 28 July 2014 by VRS  |  Email |Print

Zinc prices extended a rally to a 35-month high as speculation mounted that global demand will exceed supplies. Lead rose to the costliest this year.
Zinc inventories monitored by the London Metal Exchange have tumbled 30 percent this year to 653,900 metric tons, the lowest since December 2010. Goldman Sachs Group Inc. forecasts a global production deficit will widen to 154,000 metric tons next year………………………………………..Full Article: Source

SocGen: Precious-Metals Traders Continue To Monitor Ukraine-Russia Tensions

Posted on 25 July 2014 by VRS  |  Email |Print

Participants in precious metals markets are watching to see if geopolitical tensions put more of a risk premium into gold and boost palladium again, says Robin Bhar, metals analyst with Societe Generale. Prices spiked last week when a Malaysian jetliner was reportedly shot down by pro-Russian separatists, but have since pulled back.
“However, with all eyes on (Russian President Vladimir) Putin, aside from some price volatility here and there, the majority of investors seem to cautiously sit on the sidelines watching the action in the political spectrum unfold,” Bhar says………………………………………..Full Article: Source

How the second half will be for commodities this year

Posted on 24 July 2014 by VRS  |  Email |Print

Commodity markets are generally perceived to be fraught with risk given the volatility commodity prices demonstrate. And 2014 has been a year of contrasts. The year began with an extremely bullish situation in the grain and oilseed markets, pushing prices to new highs. In addition, the weather premium was built into prices of fears of El Niño striking later this year. Low inventories of some commodities such as soyabeans exacerbated conditions.
Mid-year, everything has turned around. The weather has been extraordinarily good in the North American continent. The dry and hot conditions expected in South America that could have pushed the sugar prices higher has not turned out as bad as feared. Rainfall from the Indian monsoon isn’t great, but it isn’t that bad either. Overall, the weather premium has now been taken out of the market. ……………………………………….Full Article: Source

The End of Quantitative Easing and What It Means for Commodities

Posted on 23 July 2014 by VRS  |  Email |Print

It’s rather bizarre that we’ve heard so much from pundits and Republican policymakers about the horrors of quantitative easing, how we’ve needed to end the problem for too long, and now — when we’re less than three months from closing the program, nobody in Washington or on Wall Street is talking about it.
It’s odd but true — in the wake of such noise making, the debate has abruptly turned to interest rates. Certainly, interest rates are important. Still, how are we looking right past the end of quantitative easing without acknowledging that we’re finally going to be done with printing money?……………………………………….Full Article: Source

Geopolitics Keeps Safe-Haven Bid in Gold Market

Posted on 22 July 2014 by VRS  |  Email |Print

Gold prices are moderately higher in early U.S. trading Monday as heightened geopolitical tensions keep a safe-haven bid in the market. August Comex gold was last up $8.70 at $1,318.00 an ounce. Spot gold was last quoted up $5.60 at $1,317.00. December Comex silver last traded up $0.261 at $21.205 an ounce.
Geopolitics remains on the front burner of the market place early this week. Last week’s downing of a Malaysian airliner on the Russia-Ukraine border and Israel’s ground offensive against Hamas on the Gaza strip are the dominant fundamentals in the markets Monday morning………………………………………..Full Article: Source

Iran rejects selling oil to Greece, Sri Lanka, South Africa

Posted on 21 July 2014 by VRS  |  Email |Print

Mohsen Qamsari, an official with the National Iranian Oil Company, said on July 20 rejected the claims that Iran is selling crude oil to Greece, Sri Lanka, and South Africa. “China with 400,000 barrels per day is the biggest costumer of Iranian crude oil,” he said, adding that Beijing’s imports account for 40 percent of Iran’s total oil export, Iran’s IRNA News Agency reported.
“India with 25 percent is the second biggest costumer of Iranian oil,” Qamsari explained. He went on to note that South Korea, Japan, and Turkey are the other main costumers of Iranian oil………………………………………..Full Article: Source

Gold to head north on geo-political tensions

Posted on 21 July 2014 by VRS  |  Email |Print

In the international market, spot gold prices dropped two per cent to $1310.8 per troy ounce. The metal touched a high of $1324.7 on Friday but came off the peaks soon on profit booking. News of the shooting down of a Malaysian Airlines plane in Ukraine increased geopolitical tensions and helped gold — a classic haven — to edge up.
However, the sharper drop in price in the initial part of the week on fears of an early increase in interest rates in the US made gold close in the negative zone for the week………………………………………..Full Article: Source

Commodities Face Back End Pressure

Posted on 18 July 2014 by VRS  |  Email |Print

The Oil market backwardation has narrowed significantly over the past month and the forward discount on oil is now at the lowest level since 2012. Libya’s imminent return to the market as well as the insurgence in Iraq have been key forces stirring up the market. The move has been passed on to oil product curves as well as base metal curves.
For some time now the oil market forward curve has mainly been driven by movements in the front end of the curve. Most recently the Iraqi insurgence pushed the oil price to the highest level in nine months. However, concerns over the unrest quickly eased and the price fell back again. The drop was further exacerbated by the news that Libya after a year of shutdown looks ready to restart exports………………………………………..Full Article: Source

Commodity prices will dip as super-cycle ends: Goldman Sachs

Posted on 18 July 2014 by VRS  |  Email |Print

Commodities from iron ore to copper and Brent crude will drop over the next five years as global supplies climb, according to Goldman Sachs Group, which highlighted oil’s recent losses as a sign of increased output. There will be substantial declines in some metals, energy and bulk commodities, analysts including Chief Currency Strategist Robin Brooks wrote in a report.
The period of continued year-on-year price rises for most commodities is over, they said in the report, which was dated July 15. Banks from Citigroup to Deutsche Bank AG have called an end to the commodities super-cycle, when China’s surging demand combined with supply constraints to more than double prices in the 12 years through 2010………………………………………..Full Article: Source

Gold spikes on Malaysia Airlines crash

Posted on 18 July 2014 by VRS  |  Email |Print

The price of the safe haven metal surged amid market nervousness over the crash in Ukraine. Safe-haven gold spiked and stocks fell as investors took fright at the loss of a passenger jet in Ukraine near the border with Russia.
Gold, a shelter for investors in times of uncertainty, surged as much as 1.9pc on reports the Malaysia Airlines aircraft, which was carrying 295 people, had been shot down………………………………………..Full Article: Source

Wall St. and commodity risk: Morgan Stanley’s VaR dips

Posted on 18 July 2014 by VRS  |  Email |Print

The quarterly earnings of Wall Street’s biggest banks offer a glimpse into the scale of their commodity trading activity through a measure of trading risk called VaR.
On Thursday, Morgan Stanley reported its commodity Value-at-Risk (VaR) fell to $19 million in the second quarter from $20 million in the first quarter and $24 million in the second quarter of 2013. VaR is the largest amount of money that the bank could lose on 95 percent of the trading days during the period………………………………………..Full Article: Source

Commodities to fall in price over next five years, says Goldman Sachs

Posted on 17 July 2014 by VRS  |  Email |Print

Commodities from iron ore to copper and Brent crude are expected to see price falls over the next five years as global supplies increase, according to Goldman Sachs. There will be substantial declines in some metals, energy and bulk commodities, analysts including chief currency strategist Robin Brooks wrote in a report. The period of continued year-on-year price rises for most commodities is over, they said.
Banks from Citigroup to Deutsche Bank have called an end to the commodities super-cycle, when China’s surging demand for raw materials combined with supply constraints at mines and wells to more than double prices in the 12 years to the end of 2010. Commodities rallied this year from three consecutive annual losses as a lack of rainfall in Brazil lifted coffee 46 per cent and a ban of ore exports from Indonesia spurred a 39 per cent increase in nickel………………………………………..Full Article: Source

Iraq: What Is The Real Impact On Oil?

Posted on 17 July 2014 by VRS  |  Email |Print

Over the last several decades, political and military turmoil in Iraq has been almost immediately associated with rising oil prices and increased uncertainty in energy markets. From a supply and demand perspective, there are some real and appropriate reasons for why this might occur. Iraq is one of the largest contributors in the Organization of the Petroleum Exporting Countries (OPEC), which accounted for more than 80% of world crude oil reserves, as of 2012.
So, it is relatively easy to understand why there is a strong association between political turmoil in the Middle East and the potential for rising prices in oil and many other energy markets. This is also why stocks likeExxon Mobil have rallied to yearly highs above $100 per share………………………………………..Full Article: Source

Winning by Waiting in Commodities

Posted on 16 July 2014 by VRS  |  Email |Print

In a bumpy year for commodities markets, some investors think they have hit on a winning strategy: Wait it out. Extreme weather and an uncertain economic outlook have sent prices for commodities ranging from coffee to natural gas to soybeans on a wild ride this year. In many of these markets, the cost for commodities delivered today is higher than months from now. That is opening up a number of ways for investors to profit.
How it works: A fund manager buys a futures contract for delivery next month. Right before it expires, the investor sells the contract, buys a cheaper one for delivery at a later date and pockets the difference………………………………………..Full Article: Source

OPEC’s Clout Falls as US Increases Oil Supply

Posted on 16 July 2014 by VRS  |  Email |Print

Crude oil supply from hydraulic fracturing isn’t just a controversial topic for U.S. politicians and industry regulators; it’s also affecting the business of the world’s biggest oil cartel. The Organization of the Petroleum Exporting Countries (OPEC) cut demand forecast for its own oil by around 300,000 barrels per day (bpd) in 2015, mainly due to increased supply from American and Canadian shale formations.
Last week, OPEC’s secretariat in Vienna, Austria, issued a report projecting that demand for oil from its 12 member nations would drop from 29.7 million bpd this year to 29.4 million bpd in 2015………………………………………..Full Article: Source

Commodity Price Volatility: What Should Producers Do About It?

Posted on 15 July 2014 by VRS  |  Email |Print

What can you do in your business about commodity price volatility? I’ve written recently about Commodity Prices: Basics for Businesses That Buy, Sell or Use Basic Materials and Commodities Prices: Why Do They Shoot Up And Then Collapse? If commodities are important to your business, can you hedge away your challenges? And if you can, should you?
Investors may find the underlying analysis useful as they think about how they trade. Businesses can have basically three relationships with commodities: producers, users or traders This article is about producers; the others relationships will be covered in subsequent articles………………………………………..Full Article: Source

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