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OPEC: Saudi Prince says Riyadh won’t cut oil unless others follow

Posted on 03 December 2014 by VRS  |  Email |Print

Saudi Arabia’s former spy chief Prince Turki said world’s biggest oil exporter won’t surrender market share to anyone. Saudi Arabia’s influential royal Prince Turki al-Faisal al-Saud has said the kingdom would only consider cutting oil production if Iran, Russia and the US agreed to match those cuts because it wants to protect its market share.
Speaking in London, the Prince who is a senior Saudi royal and the former head of the country’s spy agency, said that the kingdom would not repeat previous mistakes of surrendering its share of the global market for crude to its rivals………………………………………..Full Article: Source

Commodity prices: Why the selloff may continue in 2015

Posted on 02 December 2014 by VRS  |  Email |Print

Several of the world’s key commodities — including oil, gas, gold and corn — have been suffering the worst months of trading since the commodities crash of 2008. Back then, the main reason for downturn in prices was obvious: the credit crisis and subsequent panic about global economic growth.
Yet today, while global growth is more sluggish than hoped in certain parts of the world — particularly in China — the overall economic picture seems much brighter than in 2008………………………………………..Full Article: Source

Equity investors should heed message from commodities and bonds

Posted on 02 December 2014 by VRS  |  Email |Print

It is that season again when commentators review the year’s developments and what they imply for next year. A big surprise is the extent to which record equity prices have diverged from declining commodity prices and unusually low yields on government bonds. This historically unusual divergence can no longer be explained by big macro factors, and the bespoke explanations will be harder to sustain the greater the divergence as we enter 2015.
Had 2014 closed this past weekend, investors in US equity markets would have earned 12 per cent (as measured by the S&P 500). Meanwhile, commodity investors would have lost 9 per cent (as measured by the Thomson Reuters Commodity Index) at a time when the yield on the 30-year US Treasury bond has fallen 100 basis points to 2.89 per cent………………………………………..Full Article: Source

Wanted: Buyer of last resort for commodities

Posted on 02 December 2014 by VRS  |  Email |Print

One of the problems with cartel systems is that when they bust apart they tend to take out not just their own industry but all the other industries that have come to depend on their ability to keep things balanced in their favour.
In fact, best to think of cartels and monopolies as an “ecosystem”, which allow a whole range of different lifeforms to thrive on the back of their ability to keep things in a permanent goldilocked state of not too much and not too little control………………………………………..Full Article: Source

OPEC’s War Won’t Be All Over by Christmas

Posted on 02 December 2014 by VRS  |  Email |Print

Like invasions of Russia and land battles in Asia, a war on U.S. shale promises to be a protracted and unpredictable campaign. Rising U.S. shale oil output is one target of Saudi Arabia’s push to have OPEC members maintain their output and so depress oil prices. Even leaving aside OPEC’s clutch of internal divisions, though, fighting U.S. shale will prove a grind—with substantial attrition on the cartel’s side.
Part of OPEC’s problem is that U.S. shale is a many-headed beast, with multiple resource basins and operators. So there isn’t a single price below which production gets shut down. Rather, estimates of break-even prices in U.S. shale span a range: Citigroup , for one, estimates this to be around $70 to $90 a barrel using full-cycle costs………………………………………..Full Article: Source

Iron’s big three remain bullish as prices tumble

Posted on 02 December 2014 by VRS  |  Email |Print

Australia’s three major iron ore producers, BHP Billiton, Rio Tinto and Fortescue Metals, are feeling the pressure of the slump in the commodity’s price this year. During the past week all have gone on the offensive to convince the investment community that the problems are not of their own making, and that they have strategies to mitigate the downside to earnings.
With the price in freefall, investment banks and their commodity experts are updating their outlooks at increasingly closer intervals. At the start of the year the general consensus – to the extent there is one – was a price of about $US100 ($119) per tonne, they are now closer to $US70 a tonne. The outlyers are far lower. For the most part this exercise is not rocket science, rather the forecasters are just following the price down. ……………………………………….Full Article: Source

Gulf Markets Weaken on Falling Oil Prices

Posted on 01 December 2014 by VRS  |  Email |Print

Stock markets in the Gulf closed sharply lower Sunday as tumbling oil prices sparked concerns about the economic growth prospects for the crude-exporting region. Saudi Arabia and its Gulf neighbors are among the biggest sellers of oil globally, using billions of dollars in revenue from hydrocarbon sales to bolster local economies.
But the Organization of the Petroleum Exporting Countries—of which Saudi Arabia is the de facto leader—decided late last week to maintain crude output levels, which means a glut in the market is likely to remain and keep oil prices at multiyear lows………………………………………..Full Article: Source

Iran Wary of Oil ‘Shock Therapy’ as OPEC Vies for Market Share

Posted on 01 December 2014 by VRS  |  Email |Print

The “shock therapy” of a steep decline in crude prices is no solution for OPEC’s loss of market share to U.S. shale producers, Iran’s Oil Minister Bijan Namdar Zanganeh said.
U.S. crude prices tumbled 10 percent after the Organization of Petroleum Exporting Countries decided on Nov. 27 to keep its production target unchanged at 30 million barrels a day. Prices at this lower level are no guarantee of a significant reduction in U.S. shale output, Zanganeh said in an interview in Tehran on Nov. 28, after arriving from the OPEC meeting in Vienna………………………………………..Full Article: Source

Swiss Voters Reject Increasing Gold Reserves In Referendum

Posted on 01 December 2014 by VRS  |  Email |Print

In today’s Swiss gold referendum, roughly 78% voted against expanding central bank gold reserves to 20% of central bank assets from the current 7%, according to Swiss national broadcaster SRF. The vote is a blow to the movement to “Save Our Swiss Gold” that had the hopes of moving Switzerland back toward a gold standard which the country left in 1999.
Since then, there has been no requirement for the country’s currency to be backed by gold and as a result central bank gold reserves have waned considerably. The referendum results are not surprising given earlier polls had predicted the “no” camp would win by a large margin, however the results have mitigated concerns that increased demand from the Swiss National Bank (SNB) could cause a spike in gold prices………………………………………..Full Article: Source

Gold is freely importable again, but ignore it

Posted on 01 December 2014 by VRS  |  Email |Print

The removal of the 80:20 rule comes with the implicit admission that government regulation is powerless to modify gold consumption patterns. Last week, the government removed all restrictions on the import of gold. Along with this, government officials were quoted in news stories saying that the removal of curbs would do away with distortions in gold import.
As things stood before the relaxation, final gold consumption in India was said to be at around the same level it was before the restrictions began. Even though the curbs helped control the apparent current account deficit, it had no impact at all on the ultimate source of the gold problem, which is the actual gold consumption. All it appeared to have done was to create problems for gold exporters………………………………………..Full Article: Source

China’s slowdown is putting pressure on commodities market: Hemindra Hazari

Posted on 28 November 2014 by VRS  |  Email |Print

By and large everything has gone up in this market, everything looks over heated. Banking has gone up and people are still talking about that it is the beginning of a multi-year bull cycle run. Commodities are under lot of pressure because China is in a slowdown mode.
Surprisingly, while imports over all were down in month of October, iron ore imports were actually up which shows that a lot of dumping is taking place. Indian people are importing the iron and the steel because that is what is happening globally……………………………………Full Article: Source

Commodities cycle is alive and well – and turned very, very bearish

Posted on 28 November 2014 by VRS  |  Email |Print

Anybody who still has lingering doubts that the commodity cycle has turned bearish need only delve into two reports released this week on Australia’s resources sector. The half-yearly report from the Bureau of Resources and Energy Economics (BREE), the government’s forecaster, showed only three projects, worth a total A$597 million ($507 million), reached a positive final investment decision (FID) in the six months to October.
This is not only the lowest number, but the lowest value for more than a decade, and is conclusive proof that investment in projects is waning under the burden of low prices and more muted demand forecasts as growth in top buyer China slows……………………………………Full Article: Source

Gold rush in Europe as concern over money printing rises

Posted on 28 November 2014 by VRS  |  Email |Print

Many European countries are now moving to repatriate their gold holdings from storage abroad. They are also looking to increase the proportion of gold in their international reserves to assure currency and financial stability.
This move is significant, as it reflects growing concern that the unprecedented money printing of major central banks could debase fiat currencies, trigger runaway inflation and cause another financial crisis - perhaps even bigger than that of 2008. In spite of surging demand for the yellow metal, the gold price continues to struggle at under $1,200 per ounce……………………………………Full Article: Source

Winter of discontent for oil producers?

Posted on 27 November 2014 by VRS  |  Email |Print

Global oil producers could face a bleak winter unless OPEC heavyweights reverse course as they head into a critical meeting and reach an agreement on production cuts to boost sagging prices.
Ministers from Saudi Arabia and the United Arab Emirates signalled Wednesday that there would be no deal reached in Vienna, although the cartel’s leaders may have been employing scare tactics in order to persuade fiscally-strapped members that they must participate in production cuts or face steep price declines…………………………………..Full Article: Source

HSBC, Goldman rigged platinum prices

Posted on 27 November 2014 by VRS  |  Email |Print

Goldman Sachs and HSBC were sued in New York over claims they conspired for eight years to manipulate prices for the precious metals platinum and palladium in what plaintiffs’ lawyers say is the first class-action lawsuit of its kind in the US.
Standard Bank and a metals unit of BASF, the world’s largest chemical company, were also sued. The four companies used inside information about client purchases and sale orders to profit from price movements for the metals used in products ranging from jewellry to cars, according to a complaint filed yesterday in Manhattan federal court…………………………………..Full Article: Source

Has the Silver Correction Hit Bottom?

Posted on 26 November 2014 by VRS  |  Email |Print

It has been a tough year for investors in silver with the lustrous white metal plunging 17% over that period. This was on the back of recent weakness across all precious metals as the U.S. dollar continued to strengthen on positive economic data coming out of the U.S.
Of even greater concern for investors, are claims silver still has further to fall, with some analysts predicting further weakness among precious metals because of a stronger U.S. economy which cause the U.S. dollar to continue appreciating in value. But in recent days silver has rebounded – after hitting its lowest point in almost five years – to be trading at over $16 per ounce and I believe there is further gains ahead with the silver having already bottomed……………………………Full Article: Source

What ails the aluminium market?

Posted on 26 November 2014 by VRS  |  Email |Print

The disruption to the aluminium market is being debated in front of a US Senate committee. But will it get to the truth of what has been going on in the aluminium market and why?
The disruption to the aluminium market is being debated in front of a US Senate committee. But will it get to the truth of what has been going on in the aluminium market and why? What’s the real price of a commodity? That question, which at first appears to be a pretty simple one, is in many ways at the heart of the argument – now being debated in front of a US Senate committee – about what has been going on in the aluminium market……………………………Full Article: Source

Commodities: Nickel on a steady rise

Posted on 26 November 2014 by VRS  |  Email |Print

The stock market continued higher on Monday as the rally in U.S. stocks broadened out to include not only large cap stocks, but small and mid-cap shares as well. The Standard and Poor’s 500 large cap index ended the day higher by 0.29 percent, but small cap stocks had an entirely different agenda, as seen in the Russell 2000 small cap index which rose 1.19 percent on the day.
Small cap stock indexes have lagged large cap stock indexes for much of the year, and it would take a Herculean effort for small caps to catch up with just 25 trading days left. However, this doesn’t mean they won’t try, given Friday’s news out of China that their central bank will make money cheaper to borrow, in an attempt to stimulate their economy. The European Central Bank also announced on Friday they are getting closer to additional stimulus efforts……………………………Full Article: Source

Report reveals breadth of banks’ commodities activities

Posted on 25 November 2014 by VRS  |  Email |Print

The 403-page report published by the US Senate last week on Wall Street’s involvement in physical commodities is a treasure trove of information. It shows just how deeply Goldman Sachs, Morgan Stanley and JPMorgan pushed into raw materials over the past decade.
According to a special review by the Federal Reserve’s commodities team cited in the report, Goldman Sachs had ownership interests in more than 30 power stations, 84 metal warehouses, a Colombian coal mine as well as a uranium trading business………………………………….Full Article: Source

Fed on Commodities, Credit Suisse Plea: Compliance

Posted on 25 November 2014 by VRS  |  Email |Print

The Federal Reserve may curtail Wall Street commodity businesses after lawmakers said banks’ role in energy, power and metals markets spurred unfair trading advantages and could threaten financial stability.
At a Senate hearing Nov. 21 held by the Senate Permanent Subcommittee on Investigations, Fed Governor Daniel Tarullo said curbs under consideration include ownership limits, restricting how much revenue can be derived from commodities and requiring Wall Street firms to boost capital. He said the new rules, to be proposed early next year, could restrict banks from investing in oil tankers, coal mines and other businesses involved in physical commodities………………………………….Full Article: Source

Copper concentrate market seen splitting into three-tier system: Citibank

Posted on 25 November 2014 by VRS  |  Email |Print

The pricing of copper concentrate treatment and refining charges may be splintering into a three-tier system owning to the variety of ore available to the market, Citibank said in a research piece Monday. Analyst at the bank David Wilson questioned the validity of a benchmark reference price for copper raw material.
“Is there even such a thing as a ‘benchmark’? As of November 20, miners and smelters remained stuck in negotiations between $105-110. We expect the benchmark level will be set at $108. However, we believe that a three-tier market is emerging,” said Wilson………………………………….Full Article: Source

Commodities now caught up in a ‘super-down’ cycle

Posted on 24 November 2014 by VRS  |  Email |Print

We’re still in a super commodity cycle — except that Credit Suisse says it’s a “super down” cycle. And have we got further to fall? Perhaps, considering that oil ­prices are still 35 per cent above their 40-year inflation-adjusted norm, and minerals are 41 per cent above. Real commodity prices are not that low. Credit Suisse shows that, in real terms and over a trajectory of the past 50 years, present prices are still well above the norm.
In fact, on only four occasions since 1964 have commodities in real terms been higher than now: during the two oil shocks of the 1970s, then in the 2007 culmination of the recent commodity boom and finally during the temporary recovery surge after the GFC. We’re still well ahead of what miners and oil drillers received right from the early 1980s through to about 2005…………………………………Full Article: Source

Commodities boosted by ‘double dose’ of stimulus

Posted on 24 November 2014 by VRS  |  Email |Print

Commodity markets mostly rallied this week as China cut interest rates for the first time in more than two years, boosting the demand outlook in the Asian powerhouse. Prices also won support after European Central Bank chief Mario Draghi signalled readiness to act quickly to deter deflation, sparking fresh stimulus hopes.
“Markets in Europe took a double dose of stimulus on Friday; Mario Draghi again implied the ECB is moving towards full quantitative easing and shortly afterwards China cut interest rates for the first time in two years sending commodities and risky assets flying,” said CMC Markets analyst Jasper Lawler…………………………………Full Article: Source

Oil markets: A new chapter for Opec?

Posted on 24 November 2014 by VRS  |  Email |Print

At the last meeting of Opec nations Ali al-Naimi, the Saudi oil minister, dashed in and out of Vienna in just a few hours. He even cast aside his customary 45-minute jog with reporters. With markets stable and the price of oil around $110 a barrel, there was little for the 12 members of the oil producing cartel to talk about.
“The customer is happy, the producer is happy, the consumer is happy, the market is in balance, everything is good,” said Mr Naimi, arguably the world’s most important man in the oil world, in June…………………………………Full Article: Source

The ‘age of abundance’ in oil and gas poses fresh dilemmas for companies

Posted on 24 November 2014 by VRS  |  Email |Print

The defining image of the global energy industry in 2014 has been a tanker loading up with an ultralight form of crude oil known as condensate in Galveston, Texas, bound for South Korea.
The delivery was significant because US exports of crude oil have been tightly restricted under regulations dating back to the 1970s. For most of that period, the restrictions have been an irrelevance: the US was a large and growing importer of both oil and natural gas up until the 2000s…………………………………Full Article: Source

Iran to push for Saudi oil output cut at OPEC

Posted on 24 November 2014 by VRS  |  Email |Print

Iran will try to persuade Saudi Arabia to cut oil production when the oil ministers from the two OPEC members meet this week in Vienna, Iran’s semi-official Mehr news agency reported on Sunday citing a television interview with the country’s oil minister.
The Organization of the Petroleum Exporting Countries meets on Nov. 27 to set its output policy and some of its members have called for output cuts to shore up oil prices. Brent crude oil LCOc1 has lost about 30 percent of its value since June to around $80 a barrel because of abundant supplies and weakening demand………………………………..Full Article: Source

Why Gold Should Rise And Exceed Previous Highs

Posted on 24 November 2014 by VRS  |  Email |Print

Are Russia and Europe buying more Gold? Will the Swiss vote ‘yes’ in its gold referendum? Is there a chance for QE4? Peter Schiff is on Kitco News to comment on some of the most recent headlines surrounding the gold market and also to share his thoughts on the U.S. economy. The Euro Pacific CEO says the U.S. recovery isn’t real and adds that the dollar is only strong because all other currencies are weak.
The dollar isn’t really strong, it’s just that temporarily other currencies are weaker. I think people are worried about the yen, they’re worried about the euro, and so the dollar wins by default. They say, ‘Well it’s the cleanest shirt in the hamper.’ But it’s actually not. It’s actually the dirtiest shirt in there, people just don’t appreciate that yet. It’s only because the euphoric effects of our last round of QE haven’t worn off yet…………………………………Full Article: Source

Iron ore price dips below $US70 a tonne

Posted on 24 November 2014 by VRS  |  Email |Print

The price of iron ore has sunk below $US70 a tonne for the first time since the middle of 2009 as investors continue to fret about the imbalance of supply and demand.At the end of the offshore session on Friday, benchmark iron ore for immediate delivery to the port of Tianjin in China was trading at $US69.80 a tonne, down 0.3 per cent from its previous close of $US70 a tonne.
The latest dip rounded off a fortnight of heavy falls, which dragged the commodity down about 10 per cent. It is now trading at levels almost 50 per cent below the $US135 mark seen at the start of the year…………………………………Full Article: Source

How Long And How Much Can Silver Rally?

Posted on 24 November 2014 by VRS  |  Email |Print

November 5th likely marked a turning point for silver. My working assumption is that spot silver and the iShares Silver Trust made a significant bottom on November 5th. Since then, silver has rallied over 7%. I believe it was a significant bottom due to several reasons:
Silver mining stocks have significantly outperformed silver since then. SIL closed at $8.23 on November 5th and closed above $10 on Friday, which is a gain of over 21%. Usually, when silver is in rally mode, silver miners will outperform. Investors become more optimistic and take on more risk by buying the miners…………………………………Full Article: Source

US Senators question banks over commodities trading

Posted on 21 November 2014 by VRS  |  Email |Print

Executives of three US banks are being grilled by senators over accusations the banks engaged in unfair trading practices relating to several commodities. A two-year report found that Goldman Sachs, Morgan Stanley and JP Morgan Chase bought up large stockpiles of commodities like aluminium and copper.
In doing so, they were able to influence prices and gain advantages. The banks deny they exploited any trading advantages from these holdings…………………………………Full Article: Source

China ‘triple bubble’ points to long slide for commodities

Posted on 21 November 2014 by VRS  |  Email |Print

The “commodity super cycle” is dead. Now, it’s time to get used to the “commodity super down cycle, and China is the biggest reason why, warn strategists at Credit Suisse in a Thursday note.
Commodity demand tends to be very cyclical. Commodities, however, have been underperforming cyclical indicators of growth, including industrial production and new manufacturing orders (as measured by Institute for Supply Management survey data), they say. Much of the blame is on China, the strategists argue, noting that the country remains the “most significant source” of demand for most industrial commodities…………………………………Full Article: Source

Did Goldman Sachs rig commodities markets?

Posted on 21 November 2014 by VRS  |  Email |Print

Goldman Sachs has been trying to distance itself from the “vampire squid” image it developed during the financial crisis. The findings of a Senate investigation into commodities market rigging probably won’t help.
According to the report, Wall Street banks may have manipulated commodity prices in recent years, raising costs on consumers. The investigation looked into the holdings and dealings of Goldman (GS), JPMorgan Chase (JPM) and Morgan Stanley (MS) in physical commodities………………………………….Full Article: Source

Venezuela, Ignored By OPEC, Seeks Oil-price Relief Elsewhere

Posted on 21 November 2014 by VRS  |  Email |Print

Venezuela, openly frustrated by Saudi Arabia’s refusal to support a cut in crude production, is reaching out beyond OPEC to discuss ways to stop the recent decline in oil prices.
OPEC will be meeting at its Vienna headquarters on Nov. 27 to decide on its production goals, but on Nov. 17, Venezuelan President Nicolas Maduro said he and Russia were working to set up a meeting “very soon” with oil countries outside OPEC as well as within the cartel to discuss ways to prop up the price of crude, which is now at a four-year low………………………………….Full Article: Source

Iran to Hold Market Share Talks With Saudis at OPEC

Posted on 21 November 2014 by VRS  |  Email |Print

Iran’s oil minister said he will talk with top oil exporter Saudi Arabia about market share when OPEC meets next week in Vienna, as Tehran plans for the possible end of sanctions and unfettered crude exports. Zanganeh said Iran’s oil exports would increase by two fold within two months of lifting the sanctions, although analysts say it may take longer. Iran exports around 1.3 barrels of oil per day.
“The countries in the south of the Persian Gulf are interested in keeping their market share and a decrease in market share will be difficult,” Iran Oil Minister Bijan Zanganeh was cited as saying by the official news agency IRNA on Thursday. “Under no circumstance, will we reduce our global market share, even by one barrel.”…………………………………Full Article: Source

Oil markets wonder: Whither OPEC?

Posted on 21 November 2014 by VRS  |  Email |Print

There is a high degree of uncertainty over how November’s OPEC meeting and Iranian nuclear negotiations will unfold. Either way, the end of November will have a huge impact on oil prices. As November draws to a close, there are two major events that could profoundly change the oil markets.
With the clock ticking, the 5 permanent members of the UN Security Council plus Germany (P5 plus 1) are negotiating down to the wire with Iran over its nuclear program. The two sides have made substantial progress, but some difficult issues remain unresolved ahead of the November 24 deadline………………………………….Full Article: Source

Gold extends losses as Swiss vote concerns weigh

Posted on 21 November 2014 by VRS  |  Email |Print

Gold prices extended losses for a second session Thursday, continuing to feel pressure from news that a proposal which could require the Swiss central bank to ramp up its holdings in bullion is losing support.
Gold for December delivery fell $3 to settle at $1,190.90 an ounce, reducing an earlier loss that saw it down as much as $16. December silver was off 16 cents to $16.14 an ounce. When interest rates rise, demand for gold weakens since it does not pay interest………………………………….Full Article: Source

Goldman Spars With Senators Over Its Aluminum Business

Posted on 21 November 2014 by VRS  |  Email |Print

Goldman Sachs Group Inc. (GS) executives sparred with lawmakers over accusations that its aluminum business improperly influenced prices and that the firm’s traders had unfair access to market-moving data. Under fire at a hearing today on whether Wall Street’s ownership of commodities spurs conflicts, Goldman Sachs’s Jacques Gabillon disputed senators’ charges that long wait times for aluminum stockpiles had a direct effect on what companies and consumers pay for the metal.
Only a handful of Goldman Sachs employees get information on the aluminum unit and reports are limited to financial performance, he said. “When everything is said and done, you can say there is no correlation” between wait times and price, said Gabillon, head of the New York-based bank’s global commodities principal investments group………………………………….Full Article: Source

What are the consequences of commodities price slump?

Posted on 20 November 2014 by VRS  |  Email |Print

When prices of commodity rise they transfer riches from consumers to producers but when they fall consumers benefit. With so much at stake, the turning points are important. Currently we are standing at the cusp of such a turning point.
Commodity prices have fallen nearly 15 per cent since June-end, according to Bloomberg index. The Economist price index for Commodities has fallen by 16.5 per cent in terms of the dollar. Last week, the price of crude oil on NYMEX dropped to a four-year low of $74 a barrel from some $107 in June………………………………Full Article: Source

Senate probe says Goldman, other banks exploited commodity markets

Posted on 20 November 2014 by VRS  |  Email |Print

A two-year Senate investigation into Wall Street’s physical commodities business found that U.S. banks had manipulated prices and gained unfair trading advantages at the expense of consumers.
While the detailed report was critical of how banks purchased and exploited huge commodity stockpiles, it did not offer any damning new details on their activities………………………………Full Article: Source

Wall Street firms accused of driving up commodity prices

Posted on 20 November 2014 by VRS  |  Email |Print

Machinations by financial firms that have bought up huge swaths of coal mines, aluminum warehouses, or natural gas reserves could be leading to higher prices for consumers and companies that rely on those natural products, a new Senate report alleges.
Furthermore, Wall Street titans may be exposing themselves to huge risks and reaping unfair trading advantages by investing heavily in physical commodities, according to the Senate Permanent Subcommittee on Investigations………………………………Full Article: Source

Oil and gold price plunge does not signal a global recession, experts say

Posted on 20 November 2014 by VRS  |  Email |Print

In a rare phenomenon, the prices of completely unrelated commodities are falling. Is another global recession coming? Not quite. What could possibly cause several different kinds of commodities – from oil to gold to silver – to drop at the same time?
Prices for nearly two dozen commodities – from crude oil to corn – are in the red. A major index that tracks commodities, the S&P GSCI, is down about 18% on the year and is trading at four-year lows………………………………Full Article: Source

Oil Near 4-Year Low as OPEC Seen Resisting Cutting Output

Posted on 20 November 2014 by VRS  |  Email |Print

West Texas Intermediate crude dropped for a third day as U.S. oil inventories gained unexpectedly. Brent rose in London. Futures fell as much as 1 percent in New York. Ecuador and Venezuela will ask members of the Organization of Petroleum Exporting Countries to reduce excess output, an Ecuador official said.
A car with explosives blew up in Erbil in Iraq’s Kurdish region, the local Rudaw news agency reported, with Al Jazeera television reporting six people killed. U.S. crude inventories expanded by 3.7 million barrels last week, countering forecasts expecting a drop, the American Petroleum Institute said………………………………Full Article: Source

IEA prepares for oil supply disruption scenarios

Posted on 20 November 2014 by VRS  |  Email |Print

The International Energy Agency (IEA) completed its latest biennial Emergency Response Exercise (RER) on 18 November, as delegates from member and 10 non-member countries in Paris practiced and improved skills for responding to energy supply disruptions.
This seventh ERE focused on how member and non-member countries can cooperate during significant disruptions to oil supplies, building on lessons learned at the previous ERE in 2012. Participants from the key partner countries China, India, Indonesia and South Africa as well as other non-member countries from three continents works alongside government and industry in the 29 IEA countries to examine how best to resolve potential supply interruptions. The process included simulations of responses to three hypothetical emergencies………………………………Full Article: Source

Oil industry risks trillions of ’stranded assets’ on US-China climate deal

Posted on 20 November 2014 by VRS  |  Email |Print

Petrobas’ hopes of becoming the world’s first trillion dollar company have deflated brutally. Brazil’s Petrobras is the most indebted company in the world, a perfect barometer of the crisis enveloping the global oil and fossil nexus on multiple fronts at once.
PwC has refused to sign off on the books of this state-controlled behemoth, now under sweeping police probes for alleged graft, and rapidly crashing from hero to zero in the Brazilian press. The state oil company says funding from the capital markets has dried up, at least until auditors send a “comfort letter”………………………………Full Article: Source

The ECB’s gold buying idea is a non-starter

Posted on 20 November 2014 by VRS  |  Email |Print

Bullion bulls, desperate for positive news amid prevailing negative sentiment on the gold market, latched onto pronouncements by Yves Mersch, member of the ECB’s executive board, earlier this week. Mensch said the European Central Bank may “theoretically” look at purchasing gold, equities and exchange-traded funds as part of a quantitative easing program as it tries to find ways to stoke inflation and stimulate economic growth.
The economic bloc only just escaped tilting back into recession during the third quarter and price inflation has been well below the 2% target for a considerable time………………………………Full Article: Source

India mulling stricter control on gold imports

Posted on 20 November 2014 by VRS  |  Email |Print

The Indian government is considering a further crackdown on gold imports, as New Delhi tries to control the country’s yawning trade deficit. Officials from the ministry of finance and the central bank have met in the past week to discuss the current restrictions on gold imports, reports Avantika Chilkoti.
“They have not taken the final decision so far,” said D.S. Malik at the ministry of finance. The move comes as imports of the yellow metal begin to tick up once more. Official data released this week show gold imports reached 106.3 tonnes, or $4.2bn, this October, almost four times the shipments in the same period a year earlier………………………………Full Article: Source

The Commodity Supercycle: It’s Not Over Just Yet

Posted on 19 November 2014 by VRS  |  Email |Print

As surprising as it might sound today, we believe the secular trend for commodities has higher elevations to travel, before eventually running its course - perhaps stretching as far as early into the next decade.
While in 2011 we became adamant that the thesis trade in commodities—specifically in its leading sector of precious metals—had become crowded and overhyped, those excesses have been wrung out of the markets over the past three and a half years and offer what we perceive to be extremely compelling long-term valuations going forward……………………………………Full Article: Source

A Different Kind of Oil Crisis

Posted on 19 November 2014 by VRS  |  Email |Print

In a world that has become acclimated to sky-high oil prices, the Great Oil Crash is shaping up to be good news for cash-strapped Americans on the brink of the winter heating season. For the major oil economies, not so much. And oh, by the way, that now includes the United States.
As oil producers brace for the November 24 deadline in the nuclear talks between the West and Iran—as well as what is expected to be a particularly tricky meeting for the Organization of the Petroleum Exporting Countries—political prognosticators are sensing a geopolitical shake-up may be nigh……………………………………Full Article: Source

Goldman Says OPEC in Dilemma as Output Cut Seen Helping U.S.

Posted on 19 November 2014 by VRS  |  Email |Print

A “large” production cut by OPEC to prop up crude prices isn’t in the group’s interest because it’s likely to bolster an expansion of U.S. shale oil, according to Goldman Sachs Group Inc.
While the slide in prices into a bear market increases the chances of a reduction, trimming output by more than 500,000 barrels a day would mean further cuts are needed starting 2016 as higher prices prompt more U.S. drilling, Goldman said. Some members of the Organization of Petroleum Exporting Countries including Saudi Arabia have resisted calls to decrease supply while others seek action to support crude……………………………………Full Article: Source

Venezuela calls ‘OPEC and non-OPEC’ talks on oil slide

Posted on 19 November 2014 by VRS  |  Email |Print

Venezuela has called for a meeting of OPEC and non-OPEC countries to address the slide in oil prices, which is adding to the woes facing President Nicolas Maduro’s cash-strapped government. With the price of Brent crude at less than $80 a barrel, a drop of more than 25 percent since June, Venezuela and many other major oil producers are feeling the pinch.
“We have coordinated a special meeting of OPEC and non-OPEC countries to be held very soon to take decisions in defense of oil and oil prices and the world oil market,” Maduro said Monday in a televised address……………………………………Full Article: Source

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