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Commodities Briefing - Category | Market Moves more

Goldman Sachs on oil: US needs to cut, not OPEC

Posted on 07 April 2015 by VRS  |  Email |Print

The onus for restoring the oil price back to an equilibrium lies squarely on the shoulders of countries like the U.S. and not on the Organization of the Petroleum Exporting Countries (OPEC), a top Goldman Sachs analyst told CNBC.
Michele Della Vigna, head of European energy research at Goldman Sachs, said non-OPEC oil producers had created the oversupply in the market which has weighed on prices. “I think the market has realized that where we need to find the adjustment is onshore U.S. and that’s where the market is focused,” he told CNBC Thursday………………………………………..Full Article: Source

LBMA admits London gold market can’t be transparent with central banks in it

Posted on 07 April 2015 by VRS  |  Email |Print

Central bank involvement may prevent the London gold market from ever becoming really transparent, the chief executive of the London Bullion Market Association has told a Bank of England study group. The LBMA chief executive, Ruth Crowell, made the assertion in a long statement dated January 30 and sent to the bank’s “Fair and Effective Market Review” committee, which is studying regulation of the currency and commodity markets.
The LBMA statement was found on the bank’s Internet site by gold researcher and GATA consultant Ronan Manly. While Crowell wrote that the LBMA welcomes more transparency in the London gold market, particularly through “post-trade reporting,” she also praised gold lending by central banks for providing “liqudity” to the market, asserting that “it is vital that the role of the liquidity provider is not diminished but in fact strengthened to make sure the markets remain fair and effective.”……………………………………….Full Article: Source

Why oil’s not hitting lows? ‘Phenomenal’ demand

Posted on 02 April 2015 by VRS  |  Email |Print

As concerns about the glut of oil in the world continues to weigh, questions have been raised over why the price of the crucial commodity hasn’t fallen even further. For one analyst, the answer comes down to “phenomenal” demand.
Oil was trading slightly higher Wednesday, with Brent crude around $55.60 a barrel and U.S. West Texas Intermediate at $47.80. Both are some way off their year-to-date lows of around $46 and $42 respectively in March………………………………………..Full Article: Source

How To Reenergize The Hard-Hit Oil And Gas Industry

Posted on 02 April 2015 by VRS  |  Email |Print

Here’s a piece of legislation the Republican Congress should pass pronto: end the decades old, misbegotten ban on the export of crude oil, as well as the stifling bureaucratic restrictions on the export of natural gas. Astounding advances in technology and new discoveries of oil and natural gas reserves have skyrocketed U.S. energy production.
America is drilling and refining more oil than it has in decades. Gas is so abundant that electric utilities can’t build or retrofit plants fast enough to absorb it all. These barriers were put in place to help American businesses and consumers by keeping the stuff at home rather than letting foreigners get their hands on it………………………………………..Full Article: Source

Calling Dr. Copper: Barclays Sees 2015 Rebound

Posted on 02 April 2015 by VRS  |  Email |Print

Is copper the next crude oil? The answer is “no,” according to Suki Cooper, a commodity analyst at Barclays. In a recent note, Copper and her team today laid out case for the metal’s rebound in 2015, forecasting a price of $6,313 per ton for the year.
Because the industrial and consumer sectors make wide use of the metal, investors closely watch movements in the world’s copper price, using it as a barometer of global economic activity. It is often called “Dr. Copper – the metal with a PhD. in economics. At TK, the metal has fallen 9% over the past six months………………………………………..Full Article: Source

Goldman Sachs leads banks on commodities revenue

Posted on 02 April 2015 by VRS  |  Email |Print

Goldman Sachs now leads global banks in commodity trading revenues, overtaking JP Morgan in 2014. A report by Coalition, a financial analytics company, found that while rival banks backed out of the commodity business due to volatility and an increasingly restrictive regulatory environment, Goldman Sachs’ decision to remain in the game has reaped dividend.
Collectively, banks enjoyed a 9% increase in commodity revenue in 2014, despite the chronically low prices of some key commodities. Total revenue was US$4.9bn in 2014 and while it was the first upward tick since 2011, it still represents a fraction of the combined US$14.1bn banks were taking in before the crisis in 2008………………………………………..Full Article: Source

Time for commodities to outperform equities: Jodie Gunzberg

Posted on 01 April 2015 by VRS  |  Email |Print

21 of 24 commodities lost in FY15 with the flagship indices, S&P GSCI and Dow Jones Commodity Index (DJCI), losing 39.5 per cent and 25.9 per cent, respectively. In the past quarter, six commodities are positive: silver, cotton, gasoil, unleaded gasoline, gold, and feeder cattle. In the past month, one-third of commodities are in backwardation, measuring shortages that could be supportive for silver, copper, live cattle, feeder cattle, Kansas wheat, unleaded gasoline, heating oil and gasoil.
This highlights the positive impact of falling oil prices on the petroleum commodities that use crude oil as an input. Each commodity has its own supply and demand model so is impacted by different factors from weather to geopolitical risk. Rising interest rates, Chinese demand from stockpiling, and the possibility of rising oil prices may support commodities this year………………………………………..Full Article: Source

Oil Prices Slide on Expectations of Iran Deal

Posted on 01 April 2015 by VRS  |  Email |Print

Oil prices fell Tuesday as a deal on Iran’s nuclear program appeared more likely, raising the chances of increased Iranian crude-oil exports. Tuesday was the deadline for Iran and six other nations to outline the main elements of a deal constraining Iran’s nuclear program in exchange for lifting international sanctions. The U.S. State Department said the parties made enough progress to merit staying at the talks until Wednesday. The deadline for a final agreement is the end of June.
Iran, which has 10% of the world’s crude-oil reserves, has seen its production and export capacity sharply curtailed by sanctions. Its crude exports dropped from 2.5 million barrels a day in 2011 to 1.1 million barrels a day in 2013, according to the U.S. Energy Information Administration………………………………………..Full Article: Source

Expect oil to tumble if Iran deal gets done

Posted on 01 April 2015 by VRS  |  Email |Print

An unlikely location for oil markets, to be sure, but that is where U.S. Secretary of State John Kerry is meeting with Iran’s Mohammad Javad Zarif for intense negotiations over Iran’s nuclear program. The so-called P5+1 countries and Iran hope to come to an 11th hour agreement that could pave the way for a historic thaw in relations. The deadline for a deal is the end of the month, or Tuesday night.
Although nuclear weapons proliferation is the headline item, one of the most significant side effects of the negotiations will be their effect on the price of oil. Iran, as a member of OPEC and a major oil producer on the world stage, still has substantial influence on oil markets………………………………………..Full Article: Source

Metals Focus: 2015 could be end of gold bear cycle

Posted on 01 April 2015 by VRS  |  Email |Print

Look for continued weakness in the short term, with the price maybe bottoming out $100 per ounce below where it is today, says Metals Focus in its inaugural Gold Focus report.The seers naturally trot out Asian demand as helping to save they day, but more interestingly suggest 2015 as the year the tremendous growth in supply over the past two decades comes to an end.
Further, producer hedging - selling future supply today - is expected to remain flat at levels far lower than seen a few years back.As for rate the start of U.S. rate hikes - widely anticipated and hurting gold’s price at least in dollar terms - it could be a sell the rumor, buy the news moment for the yellow metal as punters realized the pace of hikes will be slow, with real rates remaining negative for years to come………………………………………..Full Article: Source

Commodity investors are bailing at the fastest pace on record

Posted on 31 March 2015 by VRS  |  Email |Print

Investors are bailing out of commodity funds at the fastest pace on record, and the exodus shows no signs of ending. U.S. exchange-traded funds linked to broad baskets of raw materials saw a net outflow of $919 million over the first three months of the year, the most of any quarter since the securities were created in 2006, data compiled by Bloomberg show.
Bank of America Corp. says ample supplies have unleashed price wars, and Goldman Sachs Group Inc. predicts a 20% drop for commodities already near a 13-year low. Morgan Stanley and Societe Generale SA also have cut forecasts for a whole range of items. Rising supplies created bear markets over the past year as drillers unlocked more oil and natural gas, copper mines expanded and farmers harvested record corn and soybean crops………………………………………..Full Article: Source

US battles Opec as oil output growth beats 100 year record

Posted on 31 March 2015 by VRS  |  Email |Print

American drillers increased oil production at the highest rate in a Century in 2014 despite falling prices . Opec’s efforts to slow down the pace of growth of America’s oil industry last year have failed, according to new data which revealed that drillers in the US increased production at the highest rate in more than 100 years.
The US government’s Energy Information Administration (EIA) has said that output increased by 1.2m barrels per day (bpd) last year to reach 8.7m bpd. This is the largest single increase since records began in the early 1900s………………………………………..Full Article: Source

How the conflict in Yemen is impacting the oil market

Posted on 31 March 2015 by VRS  |  Email |Print

The worsening conflict in Yemen – which pits rival internal groups backed by Iran against those backed by a Saudi Arabia-led coalition of countries – brings to the fore again the potential such regional flash points have to disrupt world oil trade.
Even before the coalition, which includes the UAE, took direct military action midweek, bombing Iranian-backed Houthi rebel positions, the risks of Yemen’s civil war spreading had been filtering through to the oil market. World benchmark North Sea Brent crude oil had one of its strongest gains this year, rising by more than 7 per cent last Wednesday and Thursday, to US$59.19, before bearish sentiment reasserted itself and Brent plunged $2.78 on Friday to end at $56.41………………………………………..Full Article: Source

Goldman slaps JPMorgan in commodities as rivals retreat

Posted on 30 March 2015 by VRS  |  Email |Print

Goldman Sachs earned back its place as the largest bank by commodities revenue as competitors including JPMorgan Chase scaled down or abandoned the raw materials business. JPMorgan, which made the most money from commodities among the top 10 investment banks in 2013, ranked second last year and Morgan Stanley was third, according to a report published Friday from Coalition, a London-based business analytics firm.
JPMorgan sold part of its physical commodities business to trading house Mercuria Energy Group last year, while Barclays, Deutsche Bank and Credit Suisse retreated amid regulatory scrutiny and pressure from lawmakers. The Bloomberg Commodity Index of 22 raw materials slumped 17 per cent in 2014, a fourth annual drop, as energy prices plunged………………………………………..Full Article: Source

Silver’s outperformance versus gold set to continue suggests economist

Posted on 30 March 2015 by VRS  |  Email |Print

Gold eased back after a strong run that had seen the spot price rise for seven straight days. Uncertainty over the situation in Yemen, Greece and a rare bout of the wobbles for the dollar spurred the rise, but some profit taking saw spot gold ease US$5 to just under US$1,200.
Even so, it was a good week for the metal, but even more so for near neighbour silver. It has risen by 8% in dollar terms in 2015 to date, whereas gold is up barely 1% said Capital Economics. Julian Jessop, Head of Commodities Research, said silver normally does better when prices of both metals are rising, but this time it has also proved more resilient in bouts of weakness………………………………………..Full Article: Source

Global economic development: Unsustainable goals

Posted on 27 March 2015 by VRS  |  Email |Print

Mary Robinson, a former president of Ireland, calls 2015 “the Bretton Woods moment for our generation”. In 1944 the small town in New Hampshire of that name hosted a conference which was to shape the post-war economic order. The open trading rules it established laid the foundation for decades of post-war growth and the “Bretton Woods twins” that it founded, the IMF and World Bank, still influence global financial governance.
Four UN conferences comprise the new Bretton Woods. Though they are unlikely to produce institutions that will matter in 50 years, if they go well they could boost growth and development in poor countries. If they do not, the only outcome will be windy and pointless political rhetoric………………………………………..Full Article: Source

Oil market’s small fry become big fish

Posted on 27 March 2015 by VRS  |  Email |Print

Like the old cartoon showing a school of small fish organised to form a big one, retail investors have become a whale in the oil market. Uniting as buyers of exchange traded funds, these investors held 180m barrels equivalent of West Texas Intermediate crude futures last week — 30 per cent of the most active futures market.
The resurfacing of oil ETFs is a sign some investors are again warming to commodities as an asset class after years of poor performance. But analysts and some fund managers warn that the fat returns of the previous decade are over and the “supercycle”, the long period of tightness in markets from oil to copper that drove these returns, has rumbled to a halt………………………………………..Full Article: Source

Copper rebounds as Chile closes mines

Posted on 27 March 2015 by VRS  |  Email |Print

Copper rebounded as torrential rain in Chile closed some of the biggest mines in the world’s largest producer of the metal. Copper rose as much as 0.5 percent after snapping the longest rally in six weeks on Wednesday. Some of the world’s largest copper mines were forced to shut down as torrential rain in the Atacama Desert of northern Chile closed roads and flooded towns.
Codelco, the world’s biggest copper producer, shut all of its Atacama mines including Chuquicamata and Radomiro Tomic, according to the state-owned company. “Copper supply expectations have been revised again after news that rains in Chile forced mines shut,” said Fang Junfeng, an analyst at Shanghai Cifco Futures Company. “The market is entering a peak consumption season in the northern hemisphere.”……………………………………….Full Article: Source

Commodities: Come Together

Posted on 26 March 2015 by VRS  |  Email |Print

Cartels have been making a comeback—if in word rather than deed. On Wednesday, Australia’s competition regulator said it had called on Andrew Forrest, chairman of Fortescue Metals, to explain comments he made at a dinner reportedly saying iron-ore miners should cap production to support sagging prices. Fortescue says Mr. Forrest was merely highlighting the damage being done to shareholders, Australia, and consumers by the iron-ore industry’s “last-man-standing fight for market share.”
Consumers, at least, rarely suffer from low prices. Regardless, Mr. Forrest’s words reflect the desperation of a company and industry that, as usual in commodity cycles, invested enormously to boost supply in good times only to suffer as demand failed to match expectations. Fortescue last week pulled a $2.5 billion bond offering, the single biggest withdrawn deal since the financial crisis, according to S&P Capital IQ LCD………………………………………..Full Article: Source

Commodities set to be a focus in 2015

Posted on 26 March 2015 by VRS  |  Email |Print

ETF Securities, one of the world’s leading, independent providers of Exchange Traded Products (ETPs), conducted a poll at their Annual Investment Conferences which showed that commodities are one of investors’ top picks for 2015, along with developed market equities. The poll also indicated that investors use ETPs for a number of different strategies, although tactical approaches proved to be the preferred method.
The results were compiled from a poll of 446 investment professionals conducted during the ETF Securities Annual Investment conferences which took place in Frankfurt, London, Paris, Milan and Zurich during January and February. The conferences focused on the broad macroeconomic outlook, commodities and foreign exchange………………………………………..Full Article: Source

Oil production growth means no quick price fix

Posted on 26 March 2015 by VRS  |  Email |Print

Oil prices were in recovery Wednesday after a three-week slide that took West Texas Intermediate crude to a six-year low last week. But a new report today warns that oil prices are unlikely to bounce back as quickly as they did in 2009, when they plunged to $33 US a barrel but recovered within three years.
That’s because both Canada and the U.S. continue to produce more oil in the face of a global glut in crude production. WTI was trading up $1.46 at $48.97 a barrel on Wednesday. That’s down 7.6 per cent since the beginning of the year and less than half the $107 it hit last June. But the price bounce defies news from the U.S. Energy Information Administration today that crude inventories rose by 8.2 million barrels last week, setting an 80-year high………………………………………..Full Article: Source

Iraq supports OPEC policy to defend market share - official

Posted on 26 March 2015 by VRS  |  Email |Print

Iraq supports OPEC’s policy of defending the group’s market share by keeping oil production steady, an Iraqi parliamentary oil official said on Wednesday, despite pressure on the Arab state’s budget.
The Organization of the Petroleum Exporting Countries (OPEC)holds its next meeting in June and so far looks set to keep policy unchanged. Adanan Al-Janabi, Iraq’s chairman of oil and energy parliamentary committee, said this would be a move he agreed with. “Iraq is with the general consensus of OPEC that we should not be fighting for the price but rather for market share,” he said………………………………………..Full Article: Source

HSBC ‘cautiously optimistic’ of gold price outlook in 2015

Posted on 26 March 2015 by VRS  |  Email |Print

HSBC is “cautiously optimistic” of the gold price outlook for 2015, predicting a trading range of $1,120/oz-$1,305/oz with an average price of $1,234/oz, the bank said late Tuesday, March 24. “The possibility that deflationary pressures could bring on negative rates in some economies helps reaffirm our cautiously optimistic view on gold,” head analyst James Steel said.
However, in Steel’s view gold prices are not “entirely hostage” to monetary developments. “The recent price slump below $1,150/oz may be encouraging greater demand from price sensitive emerging market buyers, notably, but not exclusively, in India and China,” Steel said………………………………………..Full Article: Source

SocGen’s ultra bearish gold and silver outlook

Posted on 26 March 2015 by VRS  |  Email |Print

Analysts at the French Bank Societe Generale (SocGen) in their latest research report have forecast that the gold price, having given away all its early year gains, was headed sharply lower, as it saw the dollar continue its gain in strength. They thus expected the bear market in gold to continue further and saw the price as falling to average only $925 an ounce between 2016 and 2019.
The timing of this report was perhaps unfortunate in that the forecast for a virtually immediate downturn in gold, together with dollar strength, predated the events of the past few days, which has seen the reverse occur. Gold bulls will be fervently hoping that the bank’s analysts are equally incorrect in their forecast of gold’s longer-term prospects………………………………………..Full Article: Source

Morgan Stanley Cuts Commodities Outlook on China Demand

Posted on 25 March 2015 by VRS  |  Email |Print

Morgan Stanley cut its price forecasts for almost all base metals and bulk commodities as China’s “dormant” industry fails to bolster demand in the world’s biggest consumer of copper and iron ore.
The bank reduced its 2015 estimate for nickel by 23 percent from its previous estimate to an average $14,815 a metric ton and lowered copper by 16 percent to $5,945 a ton. It cut its iron ore outlook by 28 percent and coking coal by 16 percent. Industrial metals will perform better than bulk commodities as growth in developed countries supports demand, analysts Tom Price and Joel Crane said in a report on Tuesday………………………………………..Full Article: Source

Non-OPEC members must cooperate to boost oil price - Al Naimi

Posted on 25 March 2015 by VRS  |  Email |Print

Members of the Organisation of the Petroleum Exporting Countries (OPEC) cannot be held solely responsible for the drop in oil prices, Saudi Arabia’s veteran oil minister has said. Ali Al Naimi called on non-OPEC members to cooperate in helping to raise the crude oil price, which has lost about 60 percent since mid-2014.
“GCC countries have made serious efforts to balance oil prices, but the prices are set by the market,” he said. “We refuse to take responsibility alone because OPEC produces 30 percent of market output and 70 percent comes from outside.”……………………………………….Full Article: Source

Is HSBC really closing gold vaults?

Posted on 25 March 2015 by VRS  |  Email |Print

A rumor that HSBC is rapidly and quietly closing gold vaults where clients gold bullion was stored and gold in the GLD ETF is stored has been swirling around the internet. After conversations with key players in the industry including a bullion dealer who used the safety deposit boxes for storage and delivery to clients, we can now confidently say that the speculation was incorrect.
What HSBC is actually doing is closing its safety deposit box facilities some of which are in vaults and strong rooms in branches. The vaults are not specialist gold vaults rather standard vaults or strong rooms which contain safety deposit boxes. These safety deposit boxes hold all sorts of valuables – from legal documents, to family heirlooms, to art works, to jewellery and of course bullion coins and bars………………………………………..Full Article: Source

Is nickel finally back on track?

Posted on 25 March 2015 by VRS  |  Email |Print

At the outset of 2015, the once-stable base metal segment suddenly became a precarious one, recording a bear market rally that sent an alarming signal to investors. Even nickel, whose early January trading was considered exemplary, eventually succumbed to a series of weak prices.
Nickel was 2014’s best performing industrial metal, and experts believe that it will remain a strong contender for the same accolade this year until 2016. However, several unanticipated events pulled the base metal down, including the Greece bailout crisis, the Chinese market’s absence on Lunar Eclipse holiday, and the shaky supply and demand segment dictated by China………………………………………..Full Article: Source

India: Special commodity markets for perishable commodities proposed

Posted on 24 March 2015 by VRS  |  Email |Print

In order to develop the prospect of onion and other perishable commodities like vegetables in the domestic and international market, the ministry is proposing to set up special commodity markets with processing units for perishable vegetables.
These commodity markets will be developed through the state APMCs by providing special incentives and subsidies by ministry of agriculture. This discussion has taken placed between State of Maharashtra, Government of India and National Horticultural Research and Development Foundation (NHRDF) in the context of development of onion and garlic market………………………………………..Full Article: Source

Next Five Years Will Bring Huge Changes To China’s Commodity Demand

Posted on 24 March 2015 by VRS  |  Email |Print

Remember the commodity super-cycle? It was pedaled by the Chinese. It made smart investors like Jim Rogers filthy rich. That story is over, as everyone now knows. And the next five years are going to bring huge changes to the country’s demand for raw materials, especially coal and oil.
China’s commodity demand is in transition, says Barclays Capital’s commodity research team led by Kevin Norrish in London. What’s taking place of China’s raw materials appetite is “a less investment driven, more consumer-led economy that is not as competitive in global manufacturing, but less polluting.”……………………………………….Full Article: Source

HSBC eyes commodities

Posted on 24 March 2015 by VRS  |  Email |Print

HSBC Global Asset Management, an arm of HSBC Holdings, is buying bonds of commodity exporting countries because their valuations have dropped so far with the plunge of oil prices, an executive said. The firm, which managed $454 billion of assets at the end of December, is also increasing its exposure to beaten-down currencies of countries such as Russia and Brazil because of attractive valuations, said Olga Yangol, a vice-president and senior product specialist for emerging markets.
“We are focusing back on commodity exporters, where valuations have become more attractive,” Yangol said. HSBC said assets under management at its emerging market-focused fund rose 30 per cent last year and were continuing to grow, but it did not provide specific figures………………………………………..Full Article: Source

How to Rig the Gold Market

Posted on 24 March 2015 by VRS  |  Email |Print

New technologies bring new changes to our world. One small change just happened in the financial world, although it is not on most people’s radar. The old gold fix – which was a conference call that took place twice a day – has been replaced by a new electronic gold fix. The old gold fix was a century old and consisted of four banks – Barclays, HSBC, Bank of Nova Scotia, and Societe Generale.
These four banks will remain a part of the new process, plus two additional participants. The new gold fix will be an electronic benchmark, utilizing 21st century technology. It is hoped that it will come with more transparency and less vulnerability to rigging of the markets………………………………………..Full Article: Source

European commodity trading firms baulk at tougher rules

Posted on 24 March 2015 by VRS  |  Email |Print

Commodity trading houses and energy companies are making a final attempt to win exemptions from European regulations that are set to subject them to the same capital requirements as banks. In a report published on Monday, Trafigura, one of the world’s leading commodity traders, said there was “little justification” for proposals that would impose substantial requirements but not reduce risk in the financial system.
Trafigura is one of the biggest names to enter the debate over the regulations, which threaten to force tougher demands on many of the region’s energy and commodities traders, regardless of size. The pushback comes as European authorities conclude their final review in coming months of the Markets in Financial Instruments Directive (Mifid II), the region’s flagship markets legislation………………………………………..Full Article: Source

Keeping oil below $100 will shut shale out of market: Saudi official

Posted on 23 March 2015 by VRS  |  Email |Print

Oil prices won’t rebound to $100 a barrel because increased prices would draw more shale and other output from higher-cost producers to the market, said Mohammad al-Madi, Saudi Arabia’s governor to OPEC. “I think it will be difficult to reach $100 or $120 another time,” Madi said at a conference in Riyadh on Sunday. “This will let the high-cost producers come back again.”
Saudi Arabia, the nation leading OPEC in defending its share of the global oil market, will keep investing to maintain its current output capacity, he said. Brent oil, the global benchmark, declined almost 50 percent in the past year as Saudi Arabia and others in the Organization of Petroleum Exporting Countries committed to maintaining output amid a global surplus. U.S. output is the highest in three decades as drillers pump crude from shale………………………………………..Full Article: Source

Gold fix replacement gets more participants, no Chinese yet

Posted on 23 March 2015 by VRS  |  Email |Print

At least six companies can set daily gold prices through an electronic auction that on Friday replaced the century-old London fixing ritual. Thursday was the last day that Societe Generale SA, Bank of Nova Scotia, HSBC Holdings Plc and Barclays Plc agreed twice- daily rates by phone. The four banks, UBS Group AG and Goldman Sachs Group Inc can take part in the new LBMA Gold Price run by ICE Benchmark Administration that set prices at US$1,171.75 an ounce this morning.
Gold is the last precious metal to drop the London fixings after silver, platinum and palladium made way for similar auctions last year. More participants will make the US$18 trillion global gold market more transparent, according to IBA, which said that no companies from China are yet confirmed. The London Bullion Market Association said last month that Chinese banks were among those in talks to take part………………………………………..Full Article: Source

Goldman Sachs And Morgan Stanley Commodities Trading Alarms Fed Governor

Posted on 20 March 2015 by VRS  |  Email |Print

At a U.S. Senate committee hearing Thursday, Federal Reserve Board member Daniel Tarullo singled out Morgan Stanley and Goldman Sachs over continued trading in commodities markets, suggesting that the Dodd-Frank Act could be bolstered to limit the banks’ activities in these markets.
In response to questions from Sen. Elizabeth Warren, D-Mass., as to how Dodd-Frank could be strengthened, Tarullo raised concerns that “those two firms are by statute allowed to engage in the extraction and transportation of highly combustible materials with substantial risks associated with them.” (The Dodd-Frank Act, signed into law by President Barack Obama in 2010, enhanced federal regulations on the U.S. financial system in response to the 2007-09 recession.)……………………………………….Full Article: Source

The World’s Biggest Oil And Gas Companies

Posted on 20 March 2015 by VRS  |  Email |Print

Big Oil is in a panic. The global price of crude has fallen further and faster than anyone could have predicted. At $43 a barrel oil is down about 70% from June 2014. Record oil supplies have outstripped demand, and now storage tanks are filling up. By June we might just run out of room to stick all this crude. If that happens $43 a barrel might look great compared with how far oil prices could fall.
It’s remarkable that the world finds itself swimming in Too Much Oil. A decade ago Earth was using about 83 million barrels per day. That’s grown to 93 million bpd now. Remember back in 2008 when the worryworts were prognosticating that record prices of $147 were just the beginning of a Peak Oil super spike? We don’t hear much of them anymore………………………………………..Full Article: Source

Growth in non-OPEC oil output to keep crude prices in check

Posted on 20 March 2015 by VRS  |  Email |Print

The unravelling of crude oil prices has been the biggest story of 2014. A combination of factors have led to crude oil prices correcting sharply. While demand-supply mismatches happen to be a big reason for the fall, increase in output from non-OPEC oil producing countries have also played a big role in price movements.
The Organization of Petroleum Exporting Countries in its monthly oil market report dated 16 March has given an indication of demand-supply conditions that are expected to play out in 2015. The cartel of oil producing countries says that it has seen price of the OPEC Reference Basket average at $54.06/barrel in February, representing a gain of 22 per cent, on higher demand and expectations that oil prices have hit a bottom………………………………………..Full Article: Source

Iran on course to regain OPEC position

Posted on 20 March 2015 by VRS  |  Email |Print

Industry observers say Iran is able to reclaim its position as the second largest oil producer in OPEC once US-led sanctions are lifted. Iran has said it could add a million barrels to daily oil production shortly after a deal to lift sanctions.
Minister of Petroleum Bijan Namdar Zangeneh says Iran would bring its oil production to 3.8 million “within a few months” placing it behind only Saudi Arabia in the Organization of Petroleum Exporting Countries. “While such a boost would take months because sanctions may be rolled back slowly, industry observers agree the capacity is there,” Bloomberg admitted………………………………………..Full Article: Source

Why Commodities Are Toast

Posted on 19 March 2015 by VRS  |  Email |Print

The 1970s were much like the previous decade. While, as Mark Twain said, the past doesn’t repeat itself, but it does rhyme, the 1970s and the 2000s had many of the same elements: war in the middle east, commodities boom, market crashes. It’s likely a generational effect.
Commodities are a stand out similarity to me. Commodities soared, resource plays sizzled. Plenty of crazy volatility lit up the various markets attached to commodities. Commodities is the fastest game in town. The volatility and the leverage combine to create a potent cocktail for a dangerous speedball of speculation. Commodity trading is a story of fortunes won and lost………………………………………..Full Article: Source

Oil price slump is choking this OPEC economy

Posted on 19 March 2015 by VRS  |  Email |Print

Plunging oil prices are taking a heavy toll on one of Africa’s top producers. Nigeria’s currency is trading at a record low against the U.S. dollar, the stock market has slumped 15% this year — making it the worst performer in Africa — and financial reserves are being depleted.
“It’s going to be a very difficult year,” Nigeria’s Finance Minister Ngozi Okonjo-Iweala told CNN. “We’ve had a more than 50% fall in the price of oil and that has naturally impacted the economy.” Nigeria is currently pumping about 1.8 million barrels of crude oil per day, making it OPEC’s 7th biggest producer — alongside Angola………………………………………..Full Article: Source

Citi Sees Slower Commodities Demand Growth as China Recedes

Posted on 18 March 2015 by VRS  |  Email |Print

Global commodity markets will see slower and less synchronized demand growth from across the world as China’s dominance fades, according to Citigroup Inc. Global demand expansion, which centered on the rise of China in the 2000s, will slow in the next decade and be driven increasingly by India, Southeast Asia, the Middle East, Latin America and Africa, the New York-based bank said in a report e-mailed Tuesday.
While demand will increase from these regions, dubbed the “Emerging 5”, it won’t be enough to offset the impact of slower growth from China, Citigroup said. Commodities tumbled to a 12-year low on Monday, with crude oil in New York slumping 18 percent in 2015. Inventories are rising after a decade-long bull market spurred farmers, miners and drillers to increase production just as economic growth slowed in China………………………………………..Full Article: Source

China is irreplaceable for the commodities market

Posted on 18 March 2015 by VRS  |  Email |Print

The commodities supercycle may be over but there’s no replacement for China as the world’s factory, according to Citi. From now on commodities demand will come from a diversified group of regions including India, the Middle East, Latin America, Africa and countries belonging to ASEAN in Southeast Asia, writes Henry Sanderson, commodities correspondent.
But this won’t be enough to offset China, leading to slower worldwide demand growth for commodities as well as weaker global trade flows, the bank said. Hardest hit will be thermal coal, steel iron ore and coking coal, due to their exposure to China’s manufacturing, infrastructure, and real estate sectors, they said. Base metals such as aluminium and copper are likely to do better, with emerging market demand growth in the 3 per cent to 5 per cent range into the 2020s, they said………………………………………..Full Article: Source

Oil touches six-year low as Iran talks weigh

Posted on 18 March 2015 by VRS  |  Email |Print

Fears of a supply glut popped a rebound in the price of oil on Tuesday, with comments from Iran about higher production and a possible lifting of sanctions piling on further pressure.
West Texas Intermediate (WTI) futures fell as low as $42.63 a barrel—their weakest level since the March 2009 nadir of $42.51—before paring some losses. Brent crude futures hovered near six-year lows below $53 a barrel, before also paring some losses………………………………………..Full Article: Source

The gold:oil ratio is speaking

Posted on 18 March 2015 by VRS  |  Email |Print

As a believer in the power of diversification and inflation protection a basket of commodities can provide in a passive index framework, it is hard to grasp how much investors love oil and gold. It must be that oil is the biggest, most economically significant commodity, and gold is the shiniest, most prized metal – arguably a currency in its own right.
From the largest pensions in the world to the smallest mom-and-pop retail investors, oil and gold dominate the conversation. In Taipei this week, gold and oil were louder than ever. It is an exciting time for greater China as the first commodity futures exchange-traded funds are soon to be launched………………………………………..Full Article: Source

OPEC Warns U.S. Oil Boom Could Be Over by Year-End

Posted on 17 March 2015 by VRS  |  Email |Print

OPEC said Monday the U.S. oil boom could be over by the end of this year, offering a pessimistic view of American producers’ ability to withstand a historic collapse in crude prices and predicting that global petroleum supplies would realign with demand.
The cartel, in its closely watched monthly oil-market report, cited spending cuts by U.S. producers and the falling number of American rigs drilling for oil in recent months after crude prices fell by about 60% from last summer to January before rallying in February. For instance, rig counts fell faster in February than they did in January, according to the latest Baker Hughes report………………………………………..Full Article: Source

China and Middle East will drive oil demand: OPEC

Posted on 17 March 2015 by VRS  |  Email |Print

Almost half of this year’s oil demand growth is likely to come from China and the Middle East, the Organization of the Petroleum Exporting Countries (OPEC) said Monday.
In its monthly report, Opec forecast that global oil demand growth would increase by an average 1.17 million barrels a day to 92.37 million barrels a day, little changed from estimates made in February, as the recent slide in oil prices supports consumption………………………………………..Full Article: Source

Algeria Seeks Global Oil Producers’ Accord to Halt Price Decline

Posted on 17 March 2015 by VRS  |  Email |Print

Algeria is seeking to coordinate a global response from oil-producing nations to tumbling prices, Algeria Press Service reported, citing Energy Minister Youcef Yousfi. Crude fell to a six-year low in New York on Monday.
“The drastic fall in oil prices has had an extremely negative impact on the economies of all exporting countries, whether OPEC or not members of the Organization of Petroleum Exporting Countries,” Yousfi said after a meeting in Algiers with Angolan Oil Minister Jose Maria Botelho de Vasconcelos. Nigeria’s ambassador to Algiers also attended the discussions………………………………………..Full Article: Source

Concerns mount over commodities outlook

Posted on 16 March 2015 by VRS  |  Email |Print

Commodities are the worst performing asset class so far this year and a slowdown in China remains a concern for the remainder of 2015. Deutsche Bank’s strategists have outlined that weakness is returning to global oil markets, while US natural gas, precious metals and industrial metals and bulks also continue to face headwinds.
Michael Lewis, a Deutsche strategist, said that commodities were not only the worst performing asset in the year to date, but the only major asset class to have posted negative returns since the end of last year. “Among commodities, energy has been the worst performing sector so far this month,” he said………………………………………..Full Article: Source

Activists in Commodities Should Beware of Cliffs

Posted on 16 March 2015 by VRS  |  Email |Print

Even a rational plan to shake up a miner or a big oil company can run into the reality of slumping commodity prices. Activists have gotten bolder in terms of targets, with even a giant like Apple fair game these days.
But taking on China? That is what Casablanca Capital did, albeit indirectly. In January 2014, the fund said that it had taken a 5.2% stake in iron-ore miner Cliffs Natural Resources. At the time, Cliffs shares traded at about $19, and Casablanca had paid about $25 a share for its stake. But it said that, under its plan, they could be valued at $53………………………………………..Full Article: Source

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