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Commodities Briefing - Category | Market Moves more

In times of commodities turmoil, it pays to be agile

Posted on 16 May 2016 by VRS  |  Email |Print

As the prices of resources plunged, independent commodities trading houses thrived in 2015. The winners had two things in common: They were not focused on upstream concessions, and they showed a knack for adjusting their strategies to market movements.
Low oil prices contributed to a huge profit for Mercuria Energy Group, CEO Marco Dunand said at the FT Commodities Global Summit, hosted by the Financial Times in mid-April. Leaders of other major commodities traders made similar bullish remarks at the gathering in Lausanne, Switzerland……………………………………….Full Article: Source

Commodities in a tailspin

Posted on 16 May 2016 by VRS  |  Email |Print

Most people are probably aware that until recently global commodity prices have been in a tailspin. All natural resources have fallen by some degree or another over the last two years, from fossil fuels such as coal, gas and oil to base metals including copper, iron and steel to crops such as wheat and corn to soft commodities, including coffee and pork bellies, cattle and sheep.
The Goldman Sachs Global Commodity Index has fallen 60 per cent, and even the Rogers International Commodity Index, a more diversified index, less weighted in oil and gas, is down over 50%………………………………………..Full Article: Source

Where Oil Prices Go From Here

Posted on 16 May 2016 by VRS  |  Email |Print

Leaders of major oil-exporting countries used to talk about “saving the oil” for their grandchildren. But now the grandchildren are in charge, and they want to monetize the oil.
That is certainly so in Saudi Arabia, where Deputy Crown Prince Mohammed bin Salman—a grandson of the country’s founder, Abdul Aziz ibn Saud—has launched an ambitious plan to reduce the country’s dependence on oil. Decrees issued this month announced far-reaching changes in Saudi ministers and government organization………………………………………..Full Article: Source

Big Oil’s Big Plans for New Gas Markets

Posted on 16 May 2016 by VRS  |  Email |Print

Producers hope to create new markets to boost demand to drag LNG prices out of the doldrums. Natural gas transported across the world’s oceans by ship has helped to displace coal burned in European power plants and Chinese household cookers. Now, producers want it to become a fuel for cruise liners, container ships and road trucks.
In doing so, Big Oil hopes to boost demand by enough to drag prices of liquefied natural gas out of the doldrums. LNG prices last month sank to a seven-year low in Asia as demand failed to keep up with rising supply from countries including the U.S. and Australia………………………………………..Full Article: Source

OPEC ‘will’ stay strong – Oil demand rising

Posted on 16 May 2016 by VRS  |  Email |Print

According to recent reports in international media, OPEC is on the verge of breaking up. They claim that this oil organization will no longer be able to function especially after its recent failure in the Doha meeting in February because of disagreement among the OPEC members.
It is a known fact that not all OPEC members agree on matters but they eventually reach an agreement over the outcome based on the majority. Disagreements are common in this petroleum organization but they are not indications of the breaking up of OPEC………………………………………..Full Article: Source

Platinum and palladium markets to go into deficit in 2016: GFMS

Posted on 16 May 2016 by VRS  |  Email |Print

There is good news on the horizon for investors of platinum group metals (PGMs), though a reader has to scrutinize the fine print in the latest report from GFMS to find it. The GFMS team at Thompson Reuters released their annual GFMS Platinum Group Survey 2016 (registration required) last week.
In it, GFMS forecasts the platinum market will return to a small deficit in 2016 and the deficit in palladium will deepen, with the chief determinant of lowered supply for platinum being a reduction in mined metal. “There will be little addition from new projects in the development pipeline while the headwinds of mines’ reduced capital spending is expected to start to weigh,” say the report’s authors………………………………………..Full Article: Source

Global commodity, energy funds drained

Posted on 16 May 2016 by VRS  |  Email |Print

The commodity rout over the past two years has taken a toll on India-based global commodity and energy funds. The Birla Sun Life Global Commodities Fund is down about 13 per cent over the past year, while the DSP BlackRock World Energy Fund has slipped nearly 17 per cent. The annualised return since inception of these funds in 2008/2009 is less than 2 per cent.
Until recently, there was another fund in the category — Mirae Asset Global Commodity Stock Fund. But this has been merged with the Mirae Asset India-China Consumption Fund with effect from March 2016 — a result, perhaps, of the pain in global commodities………………………………………..Full Article: Source

China’s commodities meltdown could rock the markets

Posted on 13 May 2016 by VRS  |  Email |Print

For the moment, the following is the shock NOT heard ’round the world … at least not yet. Rampant speculation in China’s commodities markets could very well be the next “black swan” event that rocks global markets and possibly the global economy.
Though very little attention has been paid to this recent action, speculative excesses in China’s commodity markets have taken traders and investors on a wild ride, which may likely soon spill over to the rest of the world………………………………………..Full Article: Source

Commodity Rout Hits Home as South Africa Has Record Output Drop

Posted on 13 May 2016 by VRS  |  Email |Print

South Africa’s mining production fell the most since at least 1980 after the country’s biggest gold and platinum mines halted unprofitable output. Production declined 18 percent in March from a year earlier, accelerating February’s revised contraction of 8.3 percent, Statistics South Africa spokesman Juan-Pierre Terblanche said by phone Thursday.
Expectations were for a drop of 12 percent, according to a Bloomberg survey of eight analysts. “This is a radical structural shift for South Africa”, said Mike Schussler, chief economist at economists.co.za………………………………………..Full Article: Source

Global oil markets ‘heading towards balance’: IEA

Posted on 13 May 2016 by VRS  |  Email |Print

Global oil markets are heading towards a long-awaited equilibrium, according to updated supply and demand data from the International Energy Agency (IEA).
The IEA said in its latest oil market report on Thursday that a rebalancing of supply and demand was starting to become evident from the existing supply and demand data which showed that global oil supply was starting to look more measured. Demand was resilient and a surplus of oil could start to shrink later this year, it added………………………………………..Full Article: Source

Russia’s Novak: Global oil market won’t balance before H1 2017

Posted on 13 May 2016 by VRS  |  Email |Print

Russian Energy Minister Alexander Novak told reporters on Thursday that the global oil surplus stood at 1.5 million barrels per day (bpd) and that the market might not balance out until the first half of 2017.
A deal to freeze oil output by OPEC and non-OPEC producers fell apart last month after Saudi Arabia demanded that Iran join in, ruining any chance of sealing what would have been the first such cooperation plan in 15 years. “This (the forecast that the market won’t balance until the first half of 2017) is an optimistic forecast as oversupply persists and the decline in production volumes is slower than analysts expected,” he said………………………………………..Full Article: Source

Saudi Arabia’s oil policy: Beyond OPEC

Posted on 13 May 2016 by VRS  |  Email |Print

Khalid Al-Falih is a busy man. When he met The Economist in Riyadh in April, he was sitting in the sprawling office from which he was running the health ministry. But the subject was the part-privatisation of Saudi Aramco, the world’s biggest oil company, whose board he also chairs. And then there was the big football match—Manchester City v Real Madrid—to rush home to watch.
Since then his focus has narrowed a little. On May 7th the 55-year-old was moved from the health ministry to what had been known as the oil ministry, but is being renamed the Ministry of Energy, Industry and Mineral Resources. That gives him oversight of the kingdom’s ambitious drive to take its economy beyond oil………………………………………..Full Article: Source

Iran’s Speedy Oil Revival Unlikely to Mean Change in OPEC Stance

Posted on 13 May 2016 by VRS  |  Email |Print

Iran’s success in boosting crude output to the most since late 2011 is no incentive for it to join OPEC partners in curbing production to shore up prices. With crude rallying, analysts see no immediate need for action.
Oil Prices are near the highest since November as supply interruptions in Nigeria, Libya and Venezuela balance an increase of 600,000 barrels a day in Iran’s April crude exports, according to data from the International Energy Agency………………………………………..Full Article: Source

Copper slides to 2-1/2 month low after weak U.S., Europe data

Posted on 13 May 2016 by VRS  |  Email |Print

Copper slid to the weakest levels in 2-1/2 months on Thursday on worries about global demand for industrial metals after worse-than-expected data on U.S. jobs and European industrial output.
Other base metals also turned lower after data showed the number of Americans filing for unemployment benefits unexpectedly rose last week to the highest level in more than a year, raising further concerns about the health of the labour market………………………………………..Full Article: Source

Hedge-Fund Investors Called Commodities Markets’ Rebound: Chart

Posted on 13 May 2016 by VRS  |  Email |Print

Hedge-fund investors rushed into commodities money pools in the first quarter and the bet’s paying off. They allocated about $4 billion to the strategy in the period, benefiting as the pools returned 6 percent in the first four months.……………………………………….Full Article: Source

From bull to bear market: China commodities shakeout hits investors, threatens mills

Posted on 12 May 2016 by VRS  |  Email |Print

Only a month ago, Chinese commodities prices were skyrocketing, led by a stampede of speculative investors betting on early signs of recovery in the world’s second-biggest economy. Now, not only has the bubble been popped but a dive has left steel and iron futures 23 per cent off their April peaks and in bear market territory.
This in turn threatens to put the brakes on the restart of steel plants that became profitable as prices rose, as well as drive investors to other markets. When prices shot up in April, Chinese commodities exchanges moved quickly to raise trading fees and push speculators to dial down trading positions, anxious to ensure there was no repeat of the boom and bust Chinese stocks suffered last year………………………………………..Full Article: Source

Saudi Arabia’s reshuffle: challenges and implications for oil market

Posted on 12 May 2016 by VRS  |  Email |Print

Last week Saudi Arabia’s King Salman announced a major government reshuffle and a reorganization of key ministries. The Kingdom’s oil minister Ali al-Naimi was replaced by former health minister and the chairman of the state-owned oil company Aramco Khalid Al-Falih.
The reshuffle has raised a question about the possibility of changes in Saudi Arabia’s oil strategy and its implications for the world oil market. Cyril Widdershoven, Middle East geopolitical specialist and energy analyst, partner at Dutch risk consultancy VEROCY and SVP MEA-Risk believes that the oil strategy of Saudi Arabia is not going to be changed for the foreseeable future………………………………………..Full Article: Source

Goldman Raises Gold Forecast While Retaining Bearish Outlook

Posted on 12 May 2016 by VRS  |  Email |Print

Goldman Sachs Group Inc. raised its forecasts for bullion prices as it scaled back expectations of U.S. Federal Reserve rate hikes over the next year, while remaining bearish on the metal’s prospects.
The bank increased its three, six and 12-month forecasts to $1,200, $1,180, and $1,150 an ounce from $1,100, $1,050 and $1,000 respectively, analysts including Jeffrey Currie and Max Layton wrote in a report dated May 10. Gold currently trades around $1,270………………………………………..Full Article: Source

Goldman Expects Gold to Drop 10%–And That’s More Optimistic Than Its Last Call

Posted on 12 May 2016 by VRS  |  Email |Print

Goldman Sachs Group is warming to gold. A bit. For some time Goldman has been one of the biggest bears on the yellow metal, but a surge in its price coupled with more supportive macro factors has softened its tone.
As recently as March, Goldman had a 12-month target of $1,000 a troy ounce for gold, despite its impressive 16% rally in the first quarter that sent the price soaring above $1,200. The bank put the rally down to short-term geopolitical risks and an excessive belief in the weakness of the U.S. economy………………………………………..Full Article: Source

Gold Now in a Long Bull Market, Analysts Say

Posted on 12 May 2016 by VRS  |  Email |Print

JPMorgan is bullish on the precious metal, and Goldman Sachs is upping its price targets as well. Gold is glittering, and that has analysts making a bull call on the precious metal.
“We’re recommending our clients to position for a new and very long bull market for gold,” said Solita Marcelli of JPMorgan Private Bank on CNBC’s “Futures Now” Tuesday. The precious metal has shot up more than 20% so far this year vs. a 1.2% gain for the S&P 500………………………………………..Full Article: Source

Japan’s Biggest Traders See No Commodities Recovery in Sight

Posted on 11 May 2016 by VRS  |  Email |Print

Japan’s top trading houses see no recovery on the horizon for the commodities crash that forced some of the first-ever annual losses by the champions of the nation’s economy, accelerating their shift away from energy and raw materials.
The country’s five biggest traders all expect further declines in oil, which has already slumped about 60 percent over the past two years. Mitsubishi Corp. sees prices sliding 19 percent in the current fiscal year, while rival Mitsui & Co. sees a 15 percent decline. Itochu Corp. sees Brent, the global benchmark, slumping almost 29 percent………………………………………..Full Article: Source

Commodities bull is over, blame China?

Posted on 11 May 2016 by VRS  |  Email |Print

Apparently, the exuberance in commodities markets that has taken gold 25 per cent higher, zinc 20 per cent higher and copper eight per cent higher since the beginning of 2016 was due to a defect in Chinese regulation. It’s now been fixed, which is why the massive correction in commodity prices happened yesterday, Bloomberg News reported Monday.
“Rarely has a mania escalated so rapidly, and spurred such fevered trading, as the great China commodities boom of 2016. Over the span of just two wild months, daily turnover on the nation’s futures markets has jumped by the equivalent of $183 billion, outpacing the headiest days of last year’s Chinese stock bubble and making volumes on the Nasdaq exchange in 2000 look tame,” says Bloomberg News………………………………………..Full Article: Source

Two reasons why commodities prices could collapse

Posted on 11 May 2016 by VRS  |  Email |Print

After big falls in the iron ore price overnight, and likely again tonight, a number of other commodities could also come off the boil. Silver prices appear to be falling, as does gold, and copper definitely is as the chart below shows. Copper sank to a four-week low overnight.
Platinum prices have come off, and Brent crude oil has dropped to US$43.58 a barrel, down from above US$48 a barrel at the end of April. Several resources companies have seen their share prices double or triple since the start of this year, but that trend could be about to reverse (perhaps apart from those in the lithium sector). South32’s share price is still up 45% since the start of this year, while BHP and Rio are flat………………………………………..Full Article: Source

Africa’s Economic Future without Commodity Dependence

Posted on 11 May 2016 by VRS  |  Email |Print

The current slump in world commodity prices is forcing Africa to rethink its traditional dependence on raw material exports. This is why the time for African nations to lay the foundations for transitioning from extractive to learning economies is now.
The jolts are real. The International Monetary Fund has projected that the continent will grow by 3% in 2016. This is well below the 6% average growth over the past decade and the lowest rate in the past 15 years………………………………………..Full Article: Source

Saudi Arabian Fight for Oil Market Intensifies

Posted on 11 May 2016 by VRS  |  Email |Print

Saudi Arabia’s economic battle over the oil market with Iran, Russia and others is intensifying even as it attempts to reduce its dependence on oil, Benoit Faucon, Selina Williams and Summer Said report.
Officials with the Organization of the Petroleum Exporting Countries, or OPEC, say the contest won’t settle down until geopolitical rifts in the Middle East cool. Saudi Arabia’s rivalry with Iran has contributed to violent conflicts in Syria and Yemen and made it nearly impossible for OPEC to agree on tactics to raise crude prices. Russia has managed to keep its European market share steady in 2014 and 2015, while Saudi Arabia has slipped………………………………………..Full Article: Source

Oil Market `Rebalancing’ for Qatar as OPEC Heads for Vienna

Posted on 11 May 2016 by VRS  |  Email |Print

Global oil demand is catching up with supply and the market should see a “rebalancing” in the second half of the year as cheaper crude has forced some production to close, Qatar’s Energy Minister Mohammad Al Sada said.
The rate of production shutdowns is accelerating and global demand is increasing, especially for products such as gasoline, Al Sada said in an e-mailed statement on Tuesday. “This trend is likely to increase further from next month due to the onset of the summer driving season,” the minister said………………………………………..Full Article: Source

Copper teeters on edge of downtrend, iron ore at key support level

Posted on 11 May 2016 by VRS  |  Email |Print

A decent rally in prices of industrial metals like iron ore and copper is unwinding on fears China will slow its rate of economic stimulus. Technical charts show both metals now stand at key points that could signal future price direction.
The impressive rally seen in the industrial metals space looks to be unwinding as early indications appear to show China will not continue its rate of stimulus into the second quarter. Both copper and iron ore prices are at key points in the charts, with further downside on the cards if support levels are broken………………………………………..Full Article: Source

It looks like the worst is over for commodities for this year

Posted on 10 May 2016 by VRS  |  Email |Print

Commodity prices have been falling since the last two years.But in March 2016, commodity prices witnessed a recovery. Does this mean commodity prices have bottomed out or is there still more room for downside? Let’s find out.
One of the major reasons for the collapse in prices of commodities was supply glut. Supply of a number of commodities had risen exponentially. Some commodities include steel, iron ore, coal, crude oil, copper, and aluminium, among others………………………………………..Full Article: Source

The Cold, Hard Facts Raining on China’s Commodity Parade

Posted on 10 May 2016 by VRS  |  Email |Print

There’s nothing like facts to get in the way of a good yarn. Prices of everything from steel rebar to cotton are extending losses in China as a slew of bearish data hastens the reversal of a rally last month triggered by speculation that economic stimulus and industrial reforms would drive up demand and curb supplies.
Steel futures in Shanghai fell the most since trading began in 2009 after inventories rose while iron ore in Dalian sank as much as 7.1 percent, extending its retreat from a 13-month high, after data showed Chinese port stockpiles expanded to the highest level in more than a year………………………………………..Full Article: Source

Oil Market Erases Gains as Fears of Fire Threat Fade

Posted on 10 May 2016 by VRS  |  Email |Print

U.S. and global oil benchmarks fell Monday as reports said Canada’s wildfires that have curtailed oil output there have slowed and moved away from key production facilities. After jumping more than 2% as the markets opened with Asian trading Sunday night, both major contracts fell as reports emerged that the threat from the fires was diminishing, at least for the moment.
The market’s losses deepened midmorning Monday as private energy data forecaster Genscape Inc. said inventories at the key U.S. delivery hub in Cushing, Okla., rose 1.4 million barrels last week, according to reports………………………………………..Full Article: Source

Saudi oil price hike justifiable, possibly perspicacious: Russell

Posted on 10 May 2016 by VRS  |  Email |Print

Saudi Arabia’s decision to hike crude oil prices to Asian customers by the most in more than a year is both understandable and curious. Saudi Aramco, the kingdom’s state oil company, lifted its official selling price (OSP) for June-loading cargoes for the main Arab Light grade to a premium of 25 cents a barrel to the Oman-Dubai benchmark, up $1.10 from a discount of 85 cents for May deliveries.
This was the biggest one-month jump since April 2015 and took the OSP to its highest since September last year. The increase was more than the market expected, but it is understandable in the context of how the Saudis calculate their OSPs………………………………………..Full Article: Source

Gold Prices Sub-$1270 Despite Hedge Fund Surge as Dollar Rallies

Posted on 10 May 2016 by VRS  |  Email |Print

Gold Prices fell through $1270 per ounce for the first time in 5 trading sessions in London on Monday, retreating as the Dollar rallied on the FX market following Friday’s weaker than expected US jobs data, writes Steffen Grosshauser at BullionVault.
After the official non-farm payrolls report said the US economy added the fewest jobs in seven months in April, weak international trade data from China today saw the Dollar rebound to the highest levels in almost 2 weeks on its trade-weighted index against other major currencies. China’s exports shrank almost 2% last month from a year earlier, while imports sank by 10%………………………………………..Full Article: Source

Oil price lows to drag on after Saudi minister is ousted

Posted on 09 May 2016 by VRS  |  Email |Print

Saudi oil minister Ali al-Naimi, who was leading calls to help rebalance the struggling oil market, has been ousted by the government in a move which could signal a slower price recovery. The highly influential Mr Naimi will be replaced after twenty years by the chairman of the state oil company Saudi Aramco, Khalid al-Falih, scuppering hope that the world’s major oil producing nations might agree to freeze output in a bid to raise prices in the oversupplied global oil market.
Earlier this year oil prices rallied almost 40pc from twelve year lows after Mr Naimi said that members of the Organization of Oil Producing Countries (Opec) would meet with non-Opec oil producers in Doha to thrash out a production freeze deal………………………………………..Full Article: Source

Saudi Shift Brings Uncertainty on Oil

Posted on 09 May 2016 by VRS  |  Email |Print

The dismissal of Saudi Arabia’s long-serving and influential oil minister ushered in a new wave of uncertainty for oil prices, which have rallied lately but could change course depending on the kingdom’s policies.
To some, the removal of Ali al-Naimi after 20 years as oil minister cemented the grip of 31-year-old Deputy Crown Prince Mohammed bin Salman on Saudi Arabia’s energy policy. Some officials at the Organization of the Petroleum Exporting Countries said that could mean a deeper politicization of oil-production strategy as the kingdom looks to neutralize its rival Iran, which is trying to come back from years of Western sanctions with a surge of output………………………………………..Full Article: Source

Saudi Arabia Is Getting Ready For “Peace” In The Oil Market, For Now

Posted on 09 May 2016 by VRS  |  Email |Print

A shake-up in the Saudi government over the weekend, which included the replacement of oil minister Ali al-Naimi by Khaled al-Faleh, signals that the Kingdom is ready for peace in the oil market.
Long serving oil minister Ali al-Naimi was the architect of Saudi Arabia’s policy to flood world markets with oil in an effort to halt the American fracking revolution and to undermine Iran’s re-entry into world markets after the lifting of sanctions………………………………………..Full Article: Source

OPEC Leaves Us Exposed to Oil Shock

Posted on 09 May 2016 by VRS  |  Email |Print

OPEC’s strategy to lock down its share of the oil market comes with a worrying by-product: rising production means the world is less able to cope with a big supply disruption than at any time since the financial crisis.That may not seem a cause for fear when the world’s awash with oil. But it could become much more of a problem once the market re-balances and demand outstrips supply again.
Global spare capacity — defined by the IEA as the volume of oil that can be brought into production within 90 days and sustained for an extended period — stands at 3.44 million barrels per day, according to data compiled by Bloomberg. But much of that may not be available as quickly as you’d hope………………………………………..Full Article: Source

Why It’s Time To Buy Gold

Posted on 09 May 2016 by VRS  |  Email |Print

Gold, as an asset, is inherently volatile. Yet, the yellow metal has broadly held on to gains above the 1200 level broken over the course of this year. In the current environment, should investors buy gold?
The yellow metal is considered as a safe-haven asset, which market players can turn to during times of market or economic uncertainty. One of the most pertinent economic issues today is the possibility that the UK will exit the European Union. While the economic implications of such a decision on markets continues to be debated, the possibility of a Brexit is leading to significant worries within the business community……………………………………….Full Article: Source

Rio Tinto CEO a non-believer in commodities rebound

Posted on 06 May 2016 by VRS  |  Email |Print

Mining giant Rio Tinto is not counting on an upturn in commodities markets anytime soon despite recent gains in prices of iron ore, its main source of revenue, as much of the world’s economies continue to underperform.
Chief Executive Sam Walsh said factors such as the looming U.S. election, a softer outlook in China and immigration woes facing Europe were suppressing a recovery in commodities. His view, however, is a departure from others calling for an end soon to the commodities rout that has sent just about every major mining company into the red………………………………………..Full Article: Source

Don’t Underestimate the Power of an Oil Market Rally

Posted on 06 May 2016 by VRS  |  Email |Print

A big move in oil prices still goes a long way in the markets these days. Crude is up more than 3% Thursday, pushing prices back over $45 a barrel. That’s setting up a risk-on day, with the S&P 500 index climbing 0.3%. It’s overshadowing recent mixed U.S. economic readings and weaker China services data.
Oil’s been a big driver of stocks for much of the year, and crude’s 67% rally off its February lows was seen as a big driver of recent stock gains. The correlation between stocks and oil had shown some signs of breaking down recently, but big rises in crude are still having a positive effect on shares………………………………………..Full Article: Source

Oil Market at Crossroads as Big Rally Masks Risks Lurking Ahead

Posted on 06 May 2016 by VRS  |  Email |Print

If the oil market needed a theme song for now, it might turn to the one where Taylor Swift nervously sings: “Are we out of the woods yet?” A slump in U.S. production, unexpected cuts in output from Nigeria to Colombia and rising gasoline demand have helped drive a major rally since mid-February. As investors boost their bullish bets, analysts from UBS Group AG to Morgan Stanley and Goldman Sachs Group Inc. see pitfalls ahead.
The global crude glut has spread to diesel and will threaten gasoline after the peak summer driving season. Unplanned outages may be resolved in coming months, boosting supplies as Iran seeks to regain market share and Saudi Arabia defends its turf………………………………………..Full Article: Source

Oil Pulls Back After Approaching 2016 Highs

Posted on 06 May 2016 by VRS  |  Email |Print

U.S. oil briefly reached some of its highest prices of the year Thursday as Canadian wildfires threatened a major oil producer, but the rally faded throughout the day with traders still confident of heavy stockpiles.
U.S. oil breached $46 a barrel for only the fourth time in 2016 and the day’s gains have rivaled some of the largest in the last month. The jolt helped revive a rally that has brought oil’s sharpest gains in years, but analysts and traders kept up their warnings of oversupply that has tugged that rally back throughout the week………………………………………..Full Article: Source

Shift in Saudi oil thinking deepens OPEC split

Posted on 06 May 2016 by VRS  |  Email |Print

As OPEC officials gathered this week to formulate a long-term strategy, few in the room expected the discussions would end without a clash. But even the most jaded delegates got more than they had bargained with.
“OPEC is dead,” declared one frustrated official, according to two sources who were present or briefed about the Vienna meeting. This was far from the first time that OPEC’s demise has been proclaimed in its 56-year history, and the oil exporters’ group itself may yet enjoy a long life in the era of cheap crude………………………………………..Full Article: Source

China Is Laying The Foundation For The Next World Gold Standard System

Posted on 06 May 2016 by VRS  |  Email |Print

On April 19, the Shanghai Gold Fix officially began. The pricing mechanism is intended to be a replacement for the London Gold Fix, the primary price-discovery mechanism for gold bullion today. The London “bullion” market is not a market in bullion.
Rather, it is a market in “unallocated” gold, defined as an unsecured liability of banks. In short, it looks suspiciously like an exercise in paper-hanging. The London Bullion Market Association claimed 21.95 million ounces of “net” clearing per day on average in 2013, worth about $27 billion. Estimates of “gross” trading are considerably higher than this………………………………………..Full Article: Source

Commodity rebound pits Citigroup v Goldman

Posted on 06 May 2016 by VRS  |  Email |Print

Commodity bulls, it might finally be time to exhale. There’s a growing chorus of voices and a surge of investor money signalling the worst of the commodity slump is over. Leading the pack is Citigroup, the bank that was ahead of the game back in 2012 when analysts declared the end of the super cycle of rising demand and prices.
Now, the bank expects a weaker US dollar and China’s stabilising economy mean most markets have reached their bottoms. Raw materials are on the brink of a bull market, after five straight years of price declines fuelled by slowing Chinese demand and global surpluses for most metals, grains and energy products………………………………………..Full Article: Source

On Bull-Market Brink, Citi Sees Commodity Gains as Goldman Jeers

Posted on 05 May 2016 by VRS  |  Email |Print

Commodity bulls, it might finally be time to exhale. There’s a growing chorus of voices and a surge of investor money signaling the worst of the commodity slump is over. Leading the pack is Citigroup Inc., the bank that was ahead of the game back in 2012 when analysts declared the end of the super cycle of rising demand and prices.
Now, the bank expects a weaker dollar and China’s stabilizing economy mean most markets have reached their bottoms. Raw materials are on the brink of a bull market, after five straight years of price declines fueled by slowing Chinese demand and global surpluses for most metals, grains and energy products………………………………………..Full Article: Source

Investing after commodities super-cycle

Posted on 05 May 2016 by VRS  |  Email |Print

According to conventional wisdom, the challenges of global commodities can be attributed to China’s slowdown. Advanced economies are not immune. In the US, just two commodity-related sectors — oil and gas, as well as metals and steel — accounted for more than half of the defaults in 2015.
And yet, the rebound of most commodity price indexes in the first quarter suggests different realities. From iron ore to aluminum, most commodities have rallied. Silver is surging. And in China policy authorities have begun to clamp down the frenzy in the commodities markets. Conventional wisdom is off, once again. But why?……………………………………….Full Article: Source

Commodities boom “damaged” Australia

Posted on 05 May 2016 by VRS  |  Email |Print

Australia’s unprecedented commodities boom caused “considerable damage” to its economic relationship with East Asia, according to a senior economist.
Tom Taylor, the head of international economics at the National Australia Bank (NAB), says that the boom sent the Australian dollar so high, it helped hollow out other areas of the economy, which became uncompetitive as a result………………………………………..Full Article: Source

Is the bloom off the commodity rose already?

Posted on 05 May 2016 by VRS  |  Email |Print

With both the S&P/TSX Composite index and the S&P/TSX Venture composite index both down over one per cent in the last two sessions, investors are wondering if the bloom has somehow come off the commodity rose already. The corrective forces are the outcome of negative economic data triggering profit-taking in a market that has soared by nearly 30 per cent since the beginning of 2016, and is no cause for alarm.
This is just natural market movement. A lot of money has been flowing into mining lately. Yesterday alone saw a total of $145 million worth of bought deal and debenture financings flow into junior energy and mining deals………………………………………..Full Article: Source

Iran’s return to the oil market turned out to be quicker than anticipated

Posted on 05 May 2016 by VRS  |  Email |Print

Iran’s return to the global oil market turned out to be quicker than anticipated but it will not affect the market in 2017, Neil Atkinson, who is head of the International Energy Agency’s (IEA) Oil Industry & Markets Division, said Wednesday.
“The real numbers, we are starting to see, do suggest the pace of return has been a bit quicker than we anticipated but it is not that much quicker and I don’t think it is affecting the balances materially for 2016. And there is an upper limit because Iran can only go back to where it was when sanctions were imposed,” Atkinson told the Bloomberg media outlet………………………………………..Full Article: Source

Beware Of The Fake Rally In Gold

Posted on 05 May 2016 by VRS  |  Email |Print

Everyone wants to see my head on a silver platter. Or make it a gold platter. Why? Because they think I’ve completely missed the gold rally and if I don’t tell them to get on board now, they will forever have lost their chance to get in as gold ultimately works its way to over $5,000 an ounce.
Well, sorry everyone. Gold isn’t going to $5,000 an ounce tomorrow. So let’s get things straight about the gold market right now. First things first. Gold has recently rallied up to its point of maximum resistance at the $1,306 level basis the June futures contract………………………………………..Full Article: Source

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