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OPEC members unlikely allow Iran to regain market share

Posted on 12 May 2015 by VRS  |  Email |Print

OPEC member countries unlikely to allow Iran to regain market share, Thomas Pugh, commodities economist at British economic research and consulting company Capital Economics believes. Iran’s oil minister, Bijan Zanganeh this week said the country will increase oil exports by more than one million barrels per day and urged other oil-producing countries “to pave the way for the return of Iranian oil to the world market” after the removal of international sanctions.
Zanganeh said Iran’s oil export has decreased by 60 percent since “crucial international sanctions” against the country were imposed (in mid-2012), adding that oil producers should make room for Iranian oil export resumption after sanctions are removed, Shana news agency reported………………………………………..Full Article: Source

Hedge funds lift bullish copper bets to August high

Posted on 12 May 2015 by VRS  |  Email |Print

Hedge funds and other speculators raised their net long position in copper to the highest level since August, the latest data show, as China cut interest rates for the third time in six months. Net long positions rose by 17,731 lots to 31,654 lots, the latest data from the Commodity Futures Trading Commission show, writes Henry Sanderson, commodities reporter.
Copper for July delivery, the most actively traded contract, slipped 0.48 per cent Monday on the New York Mercantile Exchange, despite the news of further monetary easing from China. It has risen 3.8 per cent this month………………………………………..Full Article: Source

RBA expects commodity export prices to stay high

Posted on 11 May 2015 by VRS  |  Email |Print

The outlook for Australia’s commodity exports has been further downgraded by the Reserve Bank but, like Treasury, it still believes prices will remain permanently higher than ever before, even at the peak of the last big boom 40 years ago.
Downgrades in the terms of trade (the ratio of export prices to import prices) will be one of the main sources of revenue writedown in tomorrow’s federal budget, despite Treasury endeavouring to make the estimates included in both last year’s budget and the mid-year budget update published last December more conservative than the market consensus………………………………………..Full Article: Source

Markets to rule oil prices in the coming years

Posted on 11 May 2015 by VRS  |  Email |Print

Despite the recent blip - oversupply continues to weigh on crude markets. In recent weeks, oil prices went up by around 50 percent - from January’s six-year low - posting their largest monthly gain in almost six years in April. Over the past one month, markets soared $15 a barrel - interestingly during a season when historically prices tend to be weak.
Yet the buzz is a growing - this rally is unsustainable. A consensus seems emerging. The upswing indicates a deep disconnect with the physical markets - Reuters quoted traders as saying - as tens of millions of West African, Azeri and North Sea barrels appeared struggling to find buyers………………………………………..Full Article: Source

Gold Holds Gain on Rate Outlook After Jobs Data; Palladium Drops

Posted on 11 May 2015 by VRS  |  Email |Print

Gold held an advance as investors gauged the outlook for higher interest rates after data showed that U.S. payrolls increased and unemployment fell while wage gains were limited. Palladium dropped from an eight-week high.
Bullion for immediate delivery added as much as 0.2 percent to $1,190.54 an ounce and was at $1,190.05 at 8:55 a.m. in Singapore, according to Bloomberg generic pricing. The metal rose 0.3 percent on Friday after the Labor Department release to cap the first weekly gain in a month. Gold in Shanghai fell………………………………………..Full Article: Source

Nickel bulls’ focus on LME stocks a risky strategy

Posted on 11 May 2015 by VRS  |  Email |Print

For the nickel market, it’s a case of once bitten, twice shy. Analysts are finding ever more evidence that the Indonesian ban on nickel ore exports introduced at the start of 2014 is finally starting to impact China’s massive nickel pig iron (NPI) sector.
Chinese stocks of nickel ore are falling. So too, everyone agrees, is actual NPI production, although the scale and pace of decline is difficult to pinpoint in what is a notoriously opaque part of the nickel supply chain. China’s imports of nickel are trending higher, particularly those of ferronickel, the most obvious substitute for NPI. Yet the market remains decidedly unenthused by these developments………………………………………..Full Article: Source

Tin may make a smart comeback

Posted on 11 May 2015 by VRS  |  Email |Print

Metal prices are in a meltdown globally and tin is no exception. Tin has been the worst performer among metals, falling 20 per cent so far this year. The metal now trades near a seven-year low of about $16,000 a tonne — lower than its production cost.
After touching a low of under $16,000 due to increased export from Myanmar to China, prices stabilised, thanks to the drastic output cuts announced recently by Indonesia, a major tin producer. What’s more, after a bleak performance in the last few years, analysts expect a turnaround aided by reduction in supply, and robust demand from the electronics industry in the coming years………………………………………..Full Article: Source

Indonesia Considers Rejoining OPEC

Posted on 08 May 2015 by VRS  |  Email |Print

Indonesia is considering rejoining the Organization of the Petroleum Exporting Countries as an observer after leaving the group six years ago, a minister said Thursday. “We want to have an interaction with the market [by becoming an observer in OPEC],” the Minister of Energy and Mineral Resources Sudirman Said said. He said Indonesia has in the past been invited by OPEC to attend meetings as an observer.
Indonesia discontinued its OPEC membership when it expired on Jan. 1, 2009. It has been a net oil importer since the early 2000s. The government is struggling to increase the country’s crude-oil production from about 830,000 barrels a day currently, while domestic consumption continues to rise………………………………………..Full Article: Source

Global surge in silver output passes SA by

Posted on 08 May 2015 by VRS  |  Email |Print

South Africa is Africa’s second-largest silver producer, but it is minuscule when compared with global supply, which last year notched up a 12th consecutive year of growth to reach 877-million ounces. Silver in SA is largely a by-product of other mining processes, and production has remained constant at about 2.8-million ounces a year over the past decade.
Silver is used mainly in industrial, jewellery and investment applications. The silver market ended last year with a 4.9-million ounce deficit, but the price fell 20% to $19.08/oz, the lowest average annual price since 2009, according to the 2015 World Silver Survey compiled by Thomson Reuters GFMS………………………………………..Full Article: Source

China allows more state firms to trade global commodities derivatives

Posted on 07 May 2015 by VRS  |  Email |Print

China has more than tripled the number of central government owned firms permitted to trade overseas commodities derivatives without approval from the state assets regulator, said three sources with direct knowledge of the matter.
The move will see roughly 100 additional large government-backed Chinese companies boost trading in global commodities derivatives markets such as futures, swaps and options, marking a significant step after years of strict controls in this area………………………………………..Full Article: Source

Pain is not over for commodities yet warns Kames Capital

Posted on 07 May 2015 by VRS  |  Email |Print

Investors should not be lulled into increasing their commodity exposure because of discounted valuations across commodities markets, with major headwinds poised to further disrupt returns this year, Kames Capital has warned. Kames’ chief investment officer Stephen Jones says while prices in some major commodity markets appeared to be showing signs of stabilisation, the fundamentals remained unfavourable for the sector.
“Now though, it would appear that both oil and copper have found something of a floor, and investors appear only too keen to buy into this, judging by inflows into ETFs. However, we remain sceptical. When you look through short-term factors for commodities, for example unrest in the Middle East and its impact on oil, analysis inevitably reverts back to supply and demand dynamics to dictate the price………………………………………..Full Article: Source

China One Step Closer to Becoming World’s Gold Hub

Posted on 07 May 2015 by VRS  |  Email |Print

Chinese ambitions to become the world’s leading gold trading hub and international financial hub have taken another step forward. Trials were quietly conducted to launch a yuan-backed gold pricing benchmark last month, according to Reuters today.
China, the world’s largest gold producer and buyer, feels its market weight should entitle it to be a price setter for gold bullion. It is asserting itself at a time when the established benchmark, the century old London ‘gold fix’, is under scrutiny because of long-running allegations of price manipulation. The new Chinese gold price benchmark may be launched before the end of the year………………………………………..Full Article: Source

Silver to slump 14% in 2015 – GFMS

Posted on 07 May 2015 by VRS  |  Email |Print

Silver prices on average will decline 14 percent this year as speculation that the Federal Reserve will raise U.S. interest rates spurs a shift to alternative assets, Thomson Reuters GFMS said. Silver will drop to $16.50 an ounce from the average fixing price of $19.08 in 2014, Andrew Leyland, manager of precious- metal demand at Thomson Reuters GFMS, said.
Silver futures declined 2.7 percent last month after the Fed damped speculation that it will delay boosting borrowing costs. Higher rates drive investors to favor assets that pay interest, such as bonds, curbing the metal’s appeal as a store of value, since it generally offers returns only through price gains………………………………………..Full Article: Source

Copper slips from near 2015 peaks

Posted on 07 May 2015 by VRS  |  Email |Print

Copper and most other industrial metals retreated on Wednesday from recent peaks as copper demand in China falters. Some investors also regard the base metals sector’s recent strong gains as outpacing supply and demand fundamentals.
The index of six base metals traded on the London Metal Exchange had rallied 13 per cent from lows in mid-March until Tuesday, when zinc hit its highest price in eight months and copper its strongest since mid-December. “I do think in general they’ve moved a bit too far too soon. The sector is overdue a correction,” said Stephen Briggs, metals strategist at BNP Paribas in London………………………………………..Full Article: Source

How QE impacts commodities

Posted on 06 May 2015 by VRS  |  Email |Print

The economic cycle of depression/recession has created the need for Quantitative Easing (QE), the occasionally used and effective tool used by central banks across the globe. The world knows all about it and will be remembered for ages. Before we delve deep in to this topic, it is essential to understand the basic definition of this much hyped “Quantitative Easing” and how it is supposed to work.
Quantitative Easing can be defined as monetary policy used by central banks to stimulate the economy when standard monetary policy has become ineffective. The new money swells the size of the bank reserves and lower interest rates will stimulate the economy by encouraging banks to make more loans which in turn boosts investment………………………………………..Full Article: Source

EU commodity trading firms face capital punishment

Posted on 06 May 2015 by VRS  |  Email |Print

Imposing CRD IV capital rules on trading houses, utilities and oil majors carries huge costs and makes no sense. The notion of imposing capital requirements on firms that trade commodities has been advocated by some financial regulators in recent years. It has also been loudly cheered by banks, which argue non-bank commodity traders enjoy an unfair competitive advantage from not having to set aside regulatory capital against their assets.
Since the entry into force of Europe’s Mifid II legislation in July last year, this abstract debate has become very real indeed. Mifid II both removes and narrows exemptions to financial market rules that many commodity trading firms previously benefited from. That means such firms may be forced to comply with CRD IV – the European Union version of Basel III bank capital rules………………………………………..Full Article: Source

Oil hits 2015 high as China data spur stimulus bets

Posted on 05 May 2015 by VRS  |  Email |Print

Brent crude oil touched $67 a barrel in intraday trade on Monday, its highest in 2015, as dismal Chinese factory activity enhanced expectations the world’s second-largest economy would roll out stimulus measures to arrest a slowdown.
The North Sea crude variety rose 39 cents to $66.85 a barrel by 1046 GMT, having scaled the 2015 peak of $67 earlier in the session. US crude, which had hit its highest this year at $59.90 per barrel on Friday, inched up by 22 cents to $59.37 a barrel. Brent crude oil has surged by over 40% from an almost six-year low of $45.19 in January on expectations of a tighter demand-supply balance and tension in West Asia………………………………………..Full Article: Source

Gold may witness gentle bull run in 2015: GFMS

Posted on 05 May 2015 by VRS  |  Email |Print

Despite gold’s inverse co-relation with the dollar, precious metals consultancy firm GFMS predicts a “mild bull run” in gold in 2015. This could happen even when the dollar gains strength after the US Federal Reserve hikes interest rates. Speculations on rising interest rates in the US have been putting pressure on gold price for some time now. GFMS finds that there will be a complex interplay between competing asset classes, like gold and dollar, while the investors will implement fresh strategies.
There appears to be something of a contrarian consensus developing in the gold market. Higher US rates, when they come, will trigger higher gold prices, whereas usually higher interest rates, in a low inflationary environment, would be bad for gold as a non-yielding asset class, GFMS said in the quarterly update on the metal………………………………………..Full Article: Source

Oil Builds Bullish Momentum Following Breakout

Posted on 04 May 2015 by VRS  |  Email |Print

Much like gold, this past week was an interesting week for oil which until Thursday, had struggled to breach the well developed area of resistance that had been building in the $58.50 per barrel region on the daily chart, above. Until then, oil had struggled to continue its recent bullish momentum, trading between the ceiling of resistance at this level, and the floor of support in the $55.80 per barrel region.
However, with the arrival of two pivot lows, the current bullish tone for the commodity was established. Wednesday’s run higher was also accompanied by good volume, with Thursday’s price action then taking oil through the key $58.50 level, a price point I have highlighted several times in previous market analyses………………………………………..Full Article: Source

China’s commodity demand returns, but will it last?

Posted on 30 April 2015 by VRS  |  Email |Print

Chinese demand for a wide range of commodities has been surprisingly strong this year despite worsening economic data, raising questions over how long the demand recovery can last. For the first three months of the year, oil demand grew an annual 7.7 percent, its biggest gain in over two years while March iron ore imports soared 18.5 percent on month, snapping a two-month run of declines.
Imports of refined copper metal rose to a four-month high last month, building on an 11.4 percent gain in copper consumption in February. And in the precious metals sector, March platinum imports jumped 26 percent on year, hitting their highest since December 2013………………………………………..Full Article: Source

Gold Prices Inadvertently Spur Make In India’s Manufacturing Push

Posted on 30 April 2015 by VRS  |  Email |Print

Current volatility in the gold markets has led to a new wave of ‘Make In India’ that is taking place at home – notably in the jewelry segment. Before starting, it is important to note that India’s gem and jewelry industry is a hefty contributor to the country’s economy, comprising up to seven percent of GDP.
Industry body FICCI estimates that this market, valued at approximately $40.4 billion in 2013, has the potential to grow to $85 billion by 2018. However, facts and figures on the Indian jewelry segment tend to account largely for gems and gold, which have always been staples of the economy – purchases are made for religious and cultural occasions – and consumption relies on the price of gold. India is the world’s largest consumer of gold………………………………………..Full Article: Source

Gold market: A ‘contrarian consensus’ developing

Posted on 30 April 2015 by VRS  |  Email |Print

Accepted wisdom has it that rising interest rates in a low inflationary environment put pressure on the dollar price of gold as a non-yielding asset class. This time, however, the onset of the new interest rate cycle in the United States is expected to trigger gold price rises. The GFMS Metals Research and Forecasts team at Thomson Reuters has enhanced its suite of products with the launch of its first Quarterly Update and Outlook, supplementing the prestigious annual Gold Survey.
Rhona O‘Connell, Head of the GFMS team, said that “The next move in the gold price is likely to be the result of a complex interplay between competing asset classes. In the short term the price remains under some pressure, but any approach towards $1,100 will be constrained by a growing demand side response………………………………………..Full Article: Source

How China Will Shock the Gold Market

Posted on 30 April 2015 by VRS  |  Email |Print

One of the freaky things about tsunami waves is they’re barely noticeable out at sea. In the open ocean, where the depths can hide its raw power, a tsunami is only about a meter high at most. It’s when the tsunami wave finally hits land that it starts to rear up and tower overhead, astonishing and terrifying all who see it.
We’re about to see something like this in the gold market. Courtesy of China. I’ve told you recently how China is planning to dethrone King Dollar. Right now, those plans are slowly falling into place, just as I said. The country already announced it will unveil the new China International Payment System later this year. That opens the door to making the yuan (or renminbi) a fully convertible trading currency………………………………………..Full Article: Source

Russia Plans to Meet With OPEC Before Group Next Gathers in June

Posted on 29 April 2015 by VRS  |  Email |Print

Russia, the world’s biggest energy exporter, will meet with OPEC before the group next gathers in June to discuss whether to adjust production limits, amid prices that are almost half their level of 10 months ago.
Talks with the 12-nation group will take place on June 2-3, Energy Minister Alexander Novak said Tuesday in Moscow. The Organization of Petroleum Exporting Countries gathers in Vienna on June 5 with no signs so far that it will alter plans to maintain output amid a surplus. Novak said April 15 that a meeting with OPEC would happen in June, without giving a date………………………………………..Full Article: Source

Oil see-saws on report of Iranian ship seizure

Posted on 29 April 2015 by VRS  |  Email |Print

A reminder that politics can move an oil market that’s been paying more attention of late to rigs counts and inventories. Crude prices were in a state of flux on Tuesday amid reports that Iranian forces had seized a cargo ship in the Persian Gulf.
Brent spiked by nearly a dollar to $65.46 a barrel following initial reports from Saudi Arabia’s Al Arabiya News that the vessel in question was a US ship. The report - later denied by the Pentagon - also pushed prices for West Texas Intermediate, the US oil benchmark, a dollar higher to $57.82 a barrel………………………………………..Full Article: Source

Saudi keen to maintain oil market share

Posted on 29 April 2015 by VRS  |  Email |Print

Saudi Arabia’s high crude oil production policy is based on the status of global demand and the top oil exporter is keen to maintain its market share, the kingdom’s deputy oil minister said. Speaking to reporters in Saudi Arabia, Prince Abdulaziz bin Salman bin Abdulaziz described the oil market as “excellent”, suggesting the Opec heavyweight was comfortable with current global conditions.
“As the minister mentioned, the kingdom responds to demand and supplies oil to wherever the demand is and whoever asks for it,” he said. “We care about our market share, we care about maintaining our customers and we care about the stability of the market.”……………………………………….Full Article: Source

Switzerland And Gold: What Next?

Posted on 29 April 2015 by VRS  |  Email |Print

How can we explain such a reversal so shortly after a campaign by the SNB against gold? We must remember that during the referendum campaign the SNB and its president strongly defended the peg and promised it would continue. I expected the Swiss Gold Referendum to be a big shock in the central bank sector and the gold market, but only if passed and it didn’t.
However, the consequences of the initiative, I am sure, helped prepare the “big surprise” event that was the lifting of the cap by the SNB just a month and a half later. The strong support for the initiative scared the banking industry and the SNB and, even though defeated, I think it affected the central bank in some way. It was a message from the people………………………………………..Full Article: Source

Three risks that could derail this year’s commodity rally

Posted on 28 April 2015 by VRS  |  Email |Print

Can commodities continue their early year rally? After spending most of 2014 sinking, prices for commodities such as oil have steadily climbed in the past few months, leading analysts to speculate whether the commodity bear market is finally at an end.
The picture is certainly looking brighter, said Julian Jessop, economist at Capital Economics, but there are three key risks that could prevent a real commodity turnaround in the coming months. The first one is the ongoing strength of the U.S. dollar, which has reached its highest level in more than a decade………………………………………..Full Article: Source

Saudi Prince Sees ‘Excellent’ Oil Market as Kingdom Pumps On

Posted on 28 April 2015 by VRS  |  Email |Print

Saudi Arabia, the world’s biggest oil exporter, will meet any demand for its crude as the kingdom seeks to keep customers happy and maintain a balanced market, Prince Abdulaziz bin Salman, the deputy oil minister, said.
The oil market is in “excellent” condition, he told reporters on Monday in the eastern city of Khobar, without elaborating. Benchmark Brent crude has gained 13 percent this year and was trading 9 cents lower at $65.19 a barrel at 4:39 p.m. in London………………………………………..Full Article: Source

Oil’s 45 percent rebound could be markets’ next headache

Posted on 28 April 2015 by VRS  |  Email |Print

Whisper it, but the next challenge for financial markets and policymakers may not be deflation, but the remarkable surge in oil prices from the six-year low touched in January. Since then, Brent crude futures have risen 45 percent. If that is sustained or even increased throughout this year, inflation next year could rise significantly, posing questions for policymakers largely committed to ultra-loose policy.
No fewer than 27 central banks around the world have eased monetary policy to some extent this year in a battle against deflation, slowing growth or both. These measures have ranged from interest rate cuts to bond-buying “quantitative easing” programs. All have been in response to the fall in inflation rates and inflation expectations driven by the 60 percent collapse in oil prices over the latter part of last year………………………………………..Full Article: Source

This Is How Much OPEC Really Earns

Posted on 28 April 2015 by VRS  |  Email |Print

The world already knows that the Organization of Petroleum Exporting Countries, or OPEC, can change the fate of the international oil price. By producing close to 40 % of the world’s combined crude oil, OPEC’s oil exports represents about 60% of the total petroleum traded internationally.
In spite of having such clout, 2014 has been kind of odd for the cartel as there was a considerable drop in OPEC’s revenues. As per Energy Information Administration, OPEC earned close to $730 billion in net oil export revenues in 2014, which was a decline of 11% from 2013. Low oil prices and reduction in the net oil exports were the major factors behind this decline. This was the cartel’s lowest revenue earning since 2010………………………………………..Full Article: Source

Why the US won’t have OPEC to kick around in 2016

Posted on 28 April 2015 by VRS  |  Email |Print

As candidates for the 2016 U.S. general election gear up for a White House run, one villain of recent campaign cycles will be conspicuously absent: the cartel known as OPEC. With the U.S. oil boom helping the world’s largest economy churn out more than 9 million barrels per day (bpd), its highest in about three decades and up 80 percent since 2008, energy prices appear to be sidelined as political theater.
Should current trends continue-prices of Brent crude and West Texas Intermediate are trading near their lowest levels in nearly 10 years-energy prices are unlikely to figure prominently in the coming presidential election………………………………………..Full Article: Source

Lack of fear leaves gold looking vulnerable

Posted on 28 April 2015 by VRS  |  Email |Print

After a swift surge in late March and early April, gold prices have turned around, losing some 2 percent in the past two weeks. And the pros say that with a general lack of fear in the market, there’s little reason to jump into the yellow metal just yet.
“Equities markets are again at all-time highs and keeping safe-haven gold buying to a minimum, as there is clearly no fear,” Bill Baruch, senior market strategist at iiTrader, wrote in a note to clients. The lack of fear is also weighing on the CBOE Volatility Index, which generally measures how much investors are willing to pay for insurance on the S&P 500………………………………………..Full Article: Source

Gold Vs. Silver: Better Fundamental Value In Silver, But More Short-Term Price Risk?

Posted on 28 April 2015 by VRS  |  Email |Print

Gold has outperformed silver on a risk-adjusted basis since the GFC. Our fair value model suggests that neither gold or silver are overpriced, with greater relative value in silver. We see some short-term price risk in both commodities: slightly more in silver.
Unanticipated increases in US interest rates (and the USD) could favor silver relative to gold. Gold and silver have been in an overall uptrend since 2008. Over the last 6.5 years, gold has returned an average 9.0% p.a. with a volatility of 18.8%. Silver has returned 15.4% p.a. over the same period with a volatility of 35.2%………………………………………..Full Article: Source

Strong demand to rebalance oil market by early 2016: Kemp

Posted on 24 April 2015 by VRS  |  Email |Print

Global oil demand is set to rise by 1 million or even 1.5 million barrels per day (bpd) in 2015, according to a range of forecasters. Coupled with a fall in shale output in the second half of the year, as the decline in the U.S. rig count takes effect, that should be enough to bring the oil market near to balance by early 2016.
Worldwide consumption will increase by a little over 1 million bpd in 2015, according to forecasts published this month by both the International Energy Agency and the U.S. Energy Information Administration (EIA). Ian Taylor, chief executive of Vitol, the world’s largest oil trader, has also predicted demand will grow by around 1 million bpd, at a conference hosted by the Financial Times…………………………………..Full Article: Source

U.S. Shale Fracklog Triples as Drillers Keep Oil From Market

Posted on 24 April 2015 by VRS  |  Email |Print

Think the U.S. is awash in crude now? Thank the fracklog that it’s not worse. Drillers in oil and gas fields from Texas to Pennsylvania have yet to turn on the spigots at 4,731 wells they’ve drilled, keeping 322,000 barrels a day underground, a Bloomberg Intelligence analysis shows. That’s almost as much as OPEC member Libya has been pumping this year.
The number of wells waiting to be hydraulically fractured, known as the fracklog, has tripled in the past year as companies delay work in order to avoid pumping more oil while prices are low. It’s kept crude off the market with storage tanks the fullest since 1930. The fracklog may slow a recovery as firms quickly finish wells at the first sign of higher prices…………………………………..Full Article: Source

China’s molybdenum export tax removal to overshadow Japanese term talks

Posted on 24 April 2015 by VRS  |  Email |Print

China’s removal of its export tax on molybdenum products from May 1 will overshadow term contract negotiations between Japanese steelmakers and overseas moly suppliers, industry sources said Thursday, April 23. Japanese moly term contracts typically run over a one-year period.
But for 2015, some consumers last year have asked to break up the annual contract into two six-month contracts as the launch of the Chilean Sierra Gorda mine in 2014 may impact the supply and demand picture. Japanese traders told Platts Thursday that they were told that first Sierra Gorda moly shipment will be in May-June. More than 140 mt/month of moly oxide in total are to be discussed for July-December contracts. The negotiations are expected to heat up in May…………………………………..Full Article: Source

Could The Oil Market Be In For A Quick Rebound?

Posted on 23 April 2015 by VRS  |  Email |Print

A global oil glut led to the slump in oil prices over the last year. Yet some in the industry believe the turnaround could come much quicker than markets expect. Glencore chairman and Genel CEO Tony Hayward is particularly bullish. Though he thinks the oversupply in the market would likely take a year or two to work off, he predicts that cuts to oil companies’ capital spending are laying the seeds for the next oil price bull market.
“The supply chain in the U.S. is being decimated,” Mr. Hayward said. U.S. shale oil production, the source of the current battle among producers for market share, is expected to be flat this month and will decline next month for the first time in 4.5 years, he told the FT Commodities summit in Lausanne. The decline will be faster than people are anticipating due to a significant fall in activity, he said……………………………………Full Article: Source

Zinc bull story to keep rolling

Posted on 23 April 2015 by VRS  |  Email |Print

Zinc has started to show signs of life again. In recent weeks the spot price of zinc crossed over $1/lb, up from a one-year low around 0.90/lb. It seems the prospect of a growing zinc deficit is back in play.
The notion of zinc deficit, long forecast by analysts and base metal miners, has already created one false dawn. With such a deficit in mind, zinc fever caught the market in late 2013 and persisted to mid 2014, driving the price from near $0.80/lb to around C$1.10……………………………………Full Article: Source

Oil Market Uncertain As US Shale Boom “Goes Bust”

Posted on 22 April 2015 by VRS  |  Email |Print

Oil market is uncertain as the US shale oil output is expected to fall for the first time in four years, and the coming months are likely to see a continuing price war between OPEC producers. Deutsche Bank, Goldman Sachs and HIS are now projecting that US oil production growth will now end. The global oil price rose slightly in the morning of April 14.
Citing the April 13, 2015 US Energy Information Administration prediction on the US shale production Andy Rowell writes in Oil Change International: The production would fall by 57,000 barrels per day in May this year. The report says: “The EIA forecasted that the seven major shale formations in the US: Bakken, Eagle Ford, Haynesville, Marcellus, Niobrara, Permian and Utica will produce a total of 5.56 million barrels of crude oil daily next month, down from 5.62 million barrels per day in April…………………………………..Full Article: Source

Investors See Opportunities in Commodities

Posted on 21 April 2015 by VRS  |  Email |Print

Commodities from crude oil to copper to sugar are luring investors, fueled by signs of a healing global economy and a pause in the dollar’s rally. Investors are tiptoeing back into commodities from crude oil to copper to sugar, fueled by signs the global economy is healing and a pause in the U.S. dollar’s rally.
The Standard & Poor’s GSCI Index, which tracks the prices of 24 commodities, has risen more than 12% over the past month and around midday stands near its highest level since December. Fueling those gains are higher prices for oil, which have risen by nearly a third from their lows, as well as rallies in copper, sugar, gold and other raw materials…………………………………..Full Article: Source

Global Steel demand will grow by 1.4% in 2016: worldsteel

Posted on 21 April 2015 by VRS  |  Email |Print

In its latest report worldsteel forecasts that global apparent steel use will increase by 0.5% to 1,544 Mt in 2015 following growth of 0.6% in 2014. In 2016, it is forecast that world steel demand will grow by 1.4% and will reach 1,565 Mt. Chinese steel demand in 2014 saw negative growth for the first time since 1995 due to the government’s rebalancing efforts that had a major impact on the real estate market.
This situation is likely to remain unchanged in the short term and Chinese steel use will continue to record negative growth of -0.5% in both 2015 and 2016. In the medium term no strong rebound is expected. Some uncertainty remains regarding the impact of government measures aimed at stabilising the decelerating economy…………………………………..Full Article: Source

A Beginner’s Guide To Indian Commodity Futures Markets

Posted on 21 April 2015 by VRS  |  Email |Print

Skyrocketing food prices in 2007 and 2008 sparked riots in more than 40 countries and provoked a heated debate in academic and policy circles regarding the role of commodity futures markets in aggravating food price rise. In India, too, the government banned futures trading in several agricultural commodities in 2008 to control food inflation.
The Guide explains the rapidly changing and complex world of commodity futures markets with special emphasis on the Indian markets. It connects the dots, showing how the futures markets operate in India and globally. It aims to enhance the layman’s understanding of the intricacies of commodity futures markets in a historical and theoretical context…………………………………..Full Article: Source

Greece is ‘main threat to global economy’s recovery’

Posted on 21 April 2015 by VRS  |  Email |Print

World finance officials worry about unevenness of growth as the Greece’s debt crisis poses the biggest problem that now needs solving. World finance officials said they see a number of threats on the horizon for a global economy still clawing back from the deepest recession in seven decades, and a potential Greek debt default presents the most immediate risk to the recovery.
After finance officials wrapped up three days of talks on Saturday, the International Monetary Fund’s policy committee set a goal of working toward a “more robust, balanced and job-rich global economy” while acknowledging growing risks to achieving that objective…………………………………..Full Article: Source

Three Reasons Oil Will Continue to Run the World

Posted on 20 April 2015 by VRS  |  Email |Print

While all the buzz surrounds oil prices, the global demand side remains on solid footing: up. Supplying 33% of all energy, oil is the world’s primary fuel. Oil is so important that global demand is ever-growing: 67 million b/d in 1990, 77 million b/d in 2000, and 91 million b/d in 2014.
I’ll never understand the animosity of some Westerners toward critical fuels that they depend on everyday, making their lives easier in ways their great grandparents only dreamed of. Oil, after all, is the reason the world is truly globalized. And it’s oil that takes a grandson living in Atlanta back home to Seattle for his grandmother’s funeral…the very same day he learned she passed……………………………………Full Article: Source

Investors Who See ‘Froth’ in Market Go All In for Oil

Posted on 20 April 2015 by VRS  |  Email |Print

Joseph Gladbach and his fellow bankers at Jefferies Group field three to five calls a day from investors eager to park their millions in energy stocks or bonds in the worst down cycle in 30 years. They’re no dummies, Gladbach says. One of the biggest mysteries of the oil market crash is why the money hasn’t dried up. The collapse in crude prices was supposed to devastate companies and spook investors after wiping more than $200 billion off the balance sheets of U.S. and Canadian producers. It didn’t.
As industry luminaries gather at the IHS CeraWeek Energy Conference in Houston this week to ponder the implications of $50-a-barrel crude, the money keeps piling into oil, with hedge funds, buyout firms and asset managers rushing to claim a spot at the table……………………………………Full Article: Source

Silver Set To Lead The Metals Lower

Posted on 20 April 2015 by VRS  |  Email |Print

Markets and stocks had a solid week until Friday when weakness set in hard off resistance. It looks like we aren’t quite ready to move higher unless we can see markets come back strong Monday but we do have several of the heavyweight leading stocks set to report next week so that may change the market landscape dramatically and quickly.
I am a bit surprised though, with good numbers coming from the video streaming company, that stocks didn’t perform better to close out the week but that’s how it went. The stocks I’m holding have done very well and are still solidly above our buy levels for now and are holding up well but I may have to do some selling if that changes……………………………………Full Article: Source

Global-focused funds falter amid slump in commodities

Posted on 20 April 2015 by VRS  |  Email |Print

The downturn in the international commodities markets has hit select global funds investing in themes such as mining, commodities, gold and Latin America.Most of these products, launched in the past five to six years, have performed poorly in terms of their NAV (net asset value) growth, which was in the range of 2-28 per cent in the past 12 months, data collated by ICICIdirect show.
While the themes may have commodities in their names, the funds actually invest in shares of companies linked with a dominant theme. For example, the gold funds actually invest their money in firms whose primary economic activity is gold mining……………………………………Full Article: Source

Russia: Still too dependent on Commodities

Posted on 16 April 2015 by VRS  |  Email |Print

The unimaginable has happened: Oil prices have dropped to less than $50 a barrel in recent trading days. Of all the oil-producing countries in the world, it seems like Russia took the biggest hit, with its economy largely reliant on the world’s most vital commodities—metals, energy, and agriculture.
Russia is regarded as one of the world’s leading producers of minerals. In fact, the country ranks first in the production of chromium, nickel, and palladium. Russia’s Norilsk Nickel remains to be the top nickel and palladium mining smelting company in the world, as well as one of the top ten copper producers………………………………………..Full Article: Source

Citi: Q2 Commodities Outlook Hinges On Oil

Posted on 16 April 2015 by VRS  |  Email |Print

In a new report, analysts at Citi Research looked at the slumping commodity market and updated their forecast for 2Q15 and beyond. One of the topics that analysts addressed is whether or not the worst of the slump is over or if there is downside remaining in oil and other commodities.
Analysts believe that many commodities have found near-term support at current levels, but that this support could be short-lived. The center of the collapse in commodity prices is crude oil, and Citi analysts to not feel that crude oil has bottomed just yet. According to the report, demand for crude oil will be seasonably low in Q2 due to refinery turnarounds. In addition, investment outflows from physically-backed crude oil ETFs will likely push crude prices lower………………………………………..Full Article: Source

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