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The Market May Crowd Out the OPEC Cartel

Posted on 24 May 2016 by VRS  |  Email |Print

Daniel Yergin’s excellent “Where Oil Prices go From Here” (op-ed, May 16) suggests that shale-oil production in the U.S. will increase once the world’s crude-oil supply and consumption return to balance later this year. This is a very optimistic scenario as it is unlikely that the Saudis will reverse their production policy.
Market forces will also ensure that other members of OPEC will start increasing production rather than sticking to their quotas. This is happening with Saudi Arabia, which is likely to produce 12 million barrels a day within 18 months to counteract the increasing surge in Iranian production. Venezuelan production will also increase within a few years after there is a more oil-company friendly government in power………………………………………..Full Article: Source

Greenback To Pressure Commodities

Posted on 23 May 2016 by VRS  |  Email |Print

The US dollar will now be the major driver for commodity prices after last week’s rather blatant move by the US Federal Reserve to return a rate rise to centre stage. While an increase is possible at next month’s Fed meeting, the July and September meetings look more likely candidates.
For that reason the US dollar will reverse its recent weakness and start rising - and will put downward pressure on commodity prices. The only exception will be the vote on June 23 about UK membership of the EU. A vote to leave would see a sell-off in sterling, a surge in the greenback and also gold. A vote to remain in the EU will see markets quickly focus on the July meeting of the Fed for a rate rise (if there is no increase at the June meeting a week before the EU vote in Britain)………………………………………..Full Article: Source

Iran Won’t Freeze Oil Output Before OPEC Meeting

Posted on 23 May 2016 by VRS  |  Email |Print

Iran, which is due to meet with OPEC partners on June 2, has no plan to join any freeze in crude output as the country won’t be done ramping up oil exports to pre-sanctions levels before the second half of the year, the head of the state oil company said.
The Persian Gulf state’s oil exports will likely surpass 2.2 million barrels a day by the middle of the summer, Rokneddin Javadi, managing director of National Iranian Oil Co., told Mehr news agency. Iran last exported at this level before sanctions were imposed on the country for its nuclear program more than four years ago. Sanctions were eased in January, and Iranian officials said they won’t discuss any output freeze or cut before reaching pre-sanctions levels………………………………………..Full Article: Source

Huge Trend Changes Point To Something Big In The Gold Market

Posted on 20 May 2016 by VRS  |  Email |Print

Very few precious metals investors realize how recent trend changes will greatly impact the gold market going forward. The reason many investors fail to grasp the huge change in the gold market is that they look at data or information on an individual basis. To really understand what is going on, we must look at how all segments of the market compare to each other… a BIRD’S EYE VIEW.
Let’s start off with one segment of the gold market that has changed significantly in the past 15 years. The Global Gold Hedge Book hit a peak of nearly 3,100 metric tons (mt) in 1999: Here we can see that after the Global Gold Hedge Book peaked in 1999, it fell to a low at a little more than 100 mt in 2013………………………………………..Full Article: Source

Oil outages speeding up new world energy order

Posted on 19 May 2016 by VRS  |  Email |Print

The world’s oil market is rebalancing faster than expected due to several serious outages, but for now there is enough oil in storage and excess capacity to keep prices from spiking.
“We’ve strung together an impressive number of outages and supply disruptions for the moment, but there’s every incentive in the dire straits the industry’s been in to get these barrels on line,” said John Kilduff, partner with Again Capital………………………………………..Full Article: Source

China goes cold on platinum jewellery, crimping world demand

Posted on 16 May 2016 by VRS  |  Email |Print

China’s penchant for luxury platinum jewellery is fading despite lower global prices, leaving world demand for the metal exposed to sharper decline. China is by far the biggest market for platinum jewellery, making up more than 60 percent of global manufacturing use for the white metal in 2015.
A close to double-digit drop in Chinese platinum jewellery demand is expected this year, GFMS analysts said ahead of the industry gathering London Platinum Week, which starts on Monday. This follows a seven percent drop in Chinese buying in 2015 fed into a four percent decline in global demand for jewellery made from the metal………………………………………..Full Article: Source

Price of Gold Will Rally in 2016 Thanks to These 2 Bullish Trends

Posted on 13 May 2016 by VRS  |  Email |Print

There are two reasons why prices will continue higher in 2016. But first, here’s the newly revealed trend that’s pushing the gold price higher today…This Is Why the Price of Gold Is Surging in 2016: A report from the World Gold Council (WGC) today shows gold demand is rising faster than ever.
During the first three months of 2016, demand for the metal soared 21%. Investors piled into gold due to worries of a global slowdown and market volatility. Gold demand in Q1 2016 totaled 1,289.90 tons. That’s a huge 21% increase from 1,070.40 tons last year………………………………………..Full Article: Source

Demand for gold skyrockets, but skepticism remains

Posted on 13 May 2016 by VRS  |  Email |Print

Gold fever is back, a sign of investors’ growing – but perhaps misplaced – anxiety about what lies ahead for the global economy. The World Gold Council, the marketing arm of the gold industry, announced on Thursday that demand for the precious metal hit its second-highest level on record during the first quarter of the year.
Meanwhile, Bank of Montreal analysts boosted their forecast for gold. They say they now expect the metal to begin next year at around $1,400 (U.S.) an ounce. That is well above its current level of roughly $1,270 and far ahead of the bank’s previous forecast of $1,200………………………………………..Full Article: Source

Blink and you’ll miss it: China’s two-month commodities bubble

Posted on 12 May 2016 by VRS  |  Email |Print

Chinese investors are known for their ability to drive markets to eye-popping extremes, resulting in some of the most spectacular booms and busts of recent times. The latest frenzy has been a bet on China’s economic recovery expressed through trading the commodities futures market, but how does it compare with history’s most-famous bubbles?
If the charts are anything to go by, the latest rage in trading commodities futures could already be over, after just two months that saw futures pricing in everything from iron ore to eggs and cotton rise as much as 50 per cent. ……………………………………….Full Article: Source

Commodities fall back to earth on China worries

Posted on 10 May 2016 by VRS  |  Email |Print

Commodities from copper to iron ore fell sharply on Monday, as a speculative rally lost steam over fresh worries about economic growth in China, the world’s biggest consumer of raw materials.
A burst in speculative trading that drove up commodity prices over the past month has led to increased production and a build-up of inventory in the country, the world’s largest consumer of commodities. Traders are now growing concerned that real demand is not there to support prices………………………………………..Full Article: Source

Saudis hand oil market the one thing it really hates

Posted on 10 May 2016 by VRS  |  Email |Print

The removal of Ali al-Naimi as Saudi Arabia’s oil minister ushers in a new age of uncertainty, and more erratic prices. Naimi was a major architect of Saudi’s current policy of forcing oil prices lower through higher supply of crude, but he was also a trusted voice within government and a respected figure at the Organization of the Petroleum Exporting Countries.
His successor Khalid al-Falih is unlikely to command the same influence over output decisions that his 80-year-old predecessor had once enjoyed. The son of a Bedouin who climbed through the ranks of Saudi oil industry technocrats, Naimi commanded the respect of successive rulers in the oil-rich kingdom………………………………………..Full Article: Source

India: Business is sluggish this Akshaya Trithiya due to rising gold prices

Posted on 10 May 2016 by VRS  |  Email |Print

It was a rush for gold on the auspicious day of Akshaya Trithiya on Monday with people thronging various jewellery shops across the city to mark the occasion with a good buy.
According to S Venkatesh Babu, president, Karnataka State Jewellers’ Federation (KJF), the business this year has been low due to the rising gold prices when compared to that of the previous year. The gold price for the day stood at Rs 2,850 per gram and Rs 3,050 for pure gold (24 carat)………………………………………..Full Article: Source

The most powerful man in oil is out - here’s what comes next

Posted on 09 May 2016 by VRS  |  Email |Print

Ali al-Naimi was the most powerful man in the oil business for two decades - until this weekend. As the oil minister of Saudi Arabia, in control of the largest proven crude reserves in the world, al-Naimi was the de-facto leader of OPEC.
At one point he held three key positions at the same time: Minister of petroleum, chairman of Saudi Aramco and chairman of Saudi’s Supreme Petroleum Council. In a word, he called the shots, and he let other OPEC ministers know just that. The past year and a half had been particularly important, as oil prices crashed and oil-dependent countries looked to Saudi Arabia to lead the effort to support prices………………………………………..Full Article: Source

Industry lobby expects 10-15% gold sales growth on Akshaya Tritiya

Posted on 09 May 2016 by VRS  |  Email |Print

The All India Gems & Jewellery Trade Federation (GJF) expects good growth in sales across India on Akshaya Tritiya, which falls on May 9 this year, due to the ongoing wedding season.
“Traditionally, Indians buy jewellery on Akshaya Tritiya and have great faith on this auspicious day. We expect a growth of 10-15% over last year due to pent up demand that was unfulfilled due to non-availability of products in previous months,” said G V Sreedhar, chairman of GJF……………………………………….Full Article: Source

China’s commodities lose more froth as economic worries underpin curbs

Posted on 06 May 2016 by VRS  |  Email |Print

Chinese steel and iron ore futures fell sharply for a third straight day and other commodities also slid on Thursday, giving up more froth after Chinese exchanges slapped curbs to quell speculation that spurred a buying frenzy last month.
Mixed signals on China’s economic health have also weighed on sentiment, breaking earlier perceptions that the world’s second-largest economy had stabilized. Trading volumes have tapered off from record highs hit in April after China’s securities regulator told commodity exchanges in Shanghai, Dalian and Zhengzhou to rein in speculation following rapid price gains in everything from steel to cotton………………………………………..Full Article: Source

Doctor Copper Still Holds Sway as Fed Barometer

Posted on 06 May 2016 by VRS  |  Email |Print

As copper goes, so goes the Federal Reserve. At least, that’s what the market thinks. Copper’s ebb and flow are thought to lend insight into global momentum (or a lack thereof) because it’s used in everything from household appliances to the wiring that powers them.
The highly conductive metal is seen as reliable gauge of economic health: Hence, its oft-used honorific, “doctor.” The transformation of the commodity into a form of collateral, however, (China has stockpiled enough copper to build 30,000 Statues of Liberty) has somewhat diminished the extent to which it still serves as the planet’s financial pulse……………………………………….Full Article: Source

OPEC to Head for June Talks Without Plan for Supply Limits

Posted on 05 May 2016 by VRS  |  Email |Print

There are currently no proposals on the table for OPEC to revive limits on crude output at its June meeting after the failure of talks to freeze production last month, according to six delegates from the group.
A meeting of representatives from the Organization of Petroleum Exporting Countries in Vienna Wednesday discussed how the fundamentals of oil supply and demand are improving, according to two delegates, who asked not to be named because the talks were private. The proposal to freeze output has been overtaken by changes in the market and may no longer be necessary, said two delegates from nations that had supported the idea last month………………………………………..Full Article: Source

Lithium: The lucky commodity?

Posted on 04 May 2016 by VRS  |  Email |Print

Lithium seems to be lucky: it has roared into prominence just when most other things are doing badly, which has given it more pronounced (or at least more noticeable) thrust than probably may have been the case if all boats were rising. Call it the after-burner effect. It is the space capsule that keeps on going when the booster rockets fall away after take-off.
In the past, whatever was the latest fashion in commodity investing had surged in unison with the market in general. So when uranium went crazy in 2007, and hit $136/lb, or when phosphate and potash had their moments in the sun, or nickel went to $50,000/tonne, or gold threatened to get to $2,000/oz, they were not the only shows on the road………………………………………..Full Article: Source

Oil Prices Slide on Bearish Data

Posted on 03 May 2016 by VRS  |  Email |Print

OPEC production figures reinforce concerns oversupply fundamentals still gripping the market. U.S. and global oil prices fell sharply Monday after data showed rising oil stockpiles in the U.S. and increased production from the Organization of the Petroleum Exporting Countries.
Analysts and brokers said the three-month, 70% rally in oil prices appeared to be losing steam, with speculative bets hitting their highest levels in a year even as supply-and-demand conditions have yet to show substantial improvement………………………………………..Full Article: Source

Commodities recovery has sceptics, but a boon while it lasts

Posted on 02 May 2016 by VRS  |  Email |Print

The recovery in commodity markets has plenty of sceptics, including the major resource companies, but the benefits will soon start flowing through the rest of the economy. The lift in the iron ore price from its low of just under $US38 a tonne last December to a high of just under $US70 a tonne last month has paralleled a broader improvement in resource markets including oil, copper and nickel.
It may not be enough to spark fresh investment in new resource projects, but it will boost the profits of the resources sector, delivering more dividends, taxes and royalties and, at the margin, more employment. It should help lift Western Australia — at present the biggest drag on national economic performance — out of its slump………………………………………..Full Article: Source

Rising oil prices throw lifeline to shale producers: Kemp

Posted on 29 April 2016 by VRS  |  Email |Print

Brent prices for 2017 ended trading above $50 per barrel on Wednesday for the first time since mid-December following the largest and most sustained rally in prices since the oil slump started.
The average for the 12 futures contracts expiring in 2017, called the calendar strip, has risen by 34 percent from its recent low of $37.45 on Jan. 20 to $50.26 on April 27.Spot prices, represented by the nearest futures contract, dominate the headlines and are of most interest to analysts and financial investors………………………………………..Full Article: Source

Saudi reforms could be low oil price’s cure

Posted on 27 April 2016 by VRS  |  Email |Print

A major obstacle holding back economic reform in Saudi Arabia has been removed. And with it goes one of the main barriers to a rising oil price. Saudi’s cabinet approved an economic reform plan on April 25 aimed at ending the country’s addiction to crude.
The plan’s author, Deputy Crown Prince Mohammed bin Salman, could plausibly argue that after the price of oil had fallen 60 percent in two years, it was time to radically overhaul the economy and open up new sources of non-oil income. Now that his strategy has won official backing, the 31-year-old prince has a chance to get the best of both worlds by moving ahead with reforms while letting oil prices - which Saudi effectively drives as the swing producer - climb at the same time………………………………………..Full Article: Source

Commodity Hedge Funds Are Hot Again

Posted on 26 April 2016 by VRS  |  Email |Print

The first quarter was a turning point for commodity markets, and the hedge funds that invest in them. The market investors couldn’t wait to get out of a year ago is the one they’re rushing into in 2016.
Commodity hedge funds netted more investor cash in the first quarter than any other type of hedge fund, and their $4 billion of inflows was their largest for any quarter in more than six years. The group has brought in more money that it has had to redeem for seven straight months, the longest winning streak ever tracked by eVestment, which plans to release the data later Monday morning………………………………………..Full Article: Source

Why cheap oil hasn’t saved the US economy

Posted on 25 April 2016 by VRS  |  Email |Print

Cheaper oil boosts an economy. It’s Econ 101. But while growth has been chugging along in America, it hasn’t been as vigorous as you’d expect with a 60% drop in oil prices since 2014. Former US Treasury secretary Larry Summers has called the lack of a big bounce one of the biggest economic puzzles of our time.
Somehow, it may even turn out to be bad for the economy. The economy should get a lift through several channels. One of the most significant is that lower fuel prices mean people have more money to spend on other things………………………………………..Full Article: Source

OPEC Officials: May Discuss Oil Freeze at June Meeting

Posted on 22 April 2016 by VRS  |  Email |Print

OPEC is ‘still alive’ as a force in the oil market, says secretary-general Abdallah Salem el-Badri. OPEC spoke on Thursday, but the market wasn’t listening. The Organization of the Petroleum Exporting Countries could revive talk of freezing oil production along with nonmembers at its next meeting in June, said top oil officials on Thursday.
A production freeze was an idea that had helped send prices rallying more than 50% from 12-year lows last winter. But after the 13-nation producer group ultimately failed to strike a production deal with Russia in Qatar over the weekend, investors didn’t react much to the news that freeze talks could soon be renewed………………………………………..Full Article: Source

Iron ore break-even points halve but unlikely to dive much further: Citi

Posted on 21 April 2016 by VRS  |  Email |Print

The “breakeven” point at which the world’s largest iron ore producers are neither making nor losing cash has halved in less than three years but is unlikely to continue its steep decline, Citi says.
The “break-even” points at which the world’s largest iron ore producers are neither making nor losing cash have halved in less than three years but are unlikely to continue their steep decline, Citi says. An analysis conducted by Citi found that in the second half of 2013, the “big five” iron ore producers needed an average benchmark iron ore price of approximately $US64.30 a tonne to break even on exports to China. ……………………………………….Full Article: Source

Switzerland – A trading paradise?

Posted on 20 April 2016 by VRS  |  Email |Print

How do Swiss-based commodities giants Glencore or Vale operate in the field and what are the consequences of their work for those living there? A new documentary by respected Swiss director Daniel Schweizer takes a rare look behind the scenes of this industry.
“Today some of the biggest extraction and trading firms are based between Geneva, Zug and Lausanne. Switzerland has a great responsibility accepting them here and monitoring them so little,” declared Schweizer at the world premiere of his new documentary Trading Paradise, shown at the Visions du Réel film festival in Nyon last weekend………………………………………..Full Article: Source

China to launch gold benchmark

Posted on 19 April 2016 by VRS  |  Email |Print

China will launch a new contract today to set a “benchmark” price for gold bullion in the world’s biggest producer and consumer of gold, as part of efforts to increase its influence in pricing of the precious metal.
The yuan-denominated gold fix will be launched on the Shanghai Gold Exchange this morning, with the benchmark price at 257.97 yuan (US$39.83) per gram, said a statement released by the exchange yesterday. Eighteen banks and bullion traders have been chosen as initial market makers for the fix, including 10 Chinese lenders, Standard Chartered Bank, Australia and New Zealand Banking Group and six domestic and international bullion traders including Switzerland-based MKS Gold Ltd, the exchange said………………………………………..Full Article: Source

Copper mines shut in Chile as deluge floods Santiago streets

Posted on 18 April 2016 by VRS  |  Email |Print

Service restoration work to resume production is estimated to take at least three days, equivalent to 5,000 metric tons of copper production. Codelco, the world’s biggest copper producer, and Anglo American Plc shut mines after heavy rains in central Chile over the weekend.
Operations at Codelco’s El Teniente underground mine were halted and homes and roads were inundated as the Cachapoal River broke its banks in the O’Higgins region south of Santiago. Meanwhile, London-based Anglo American suspended its Los Bronces open-pit mine in the Andes mountains above the capital for safety reasons, while continuing some processing using stockpiled ore………………………………………..Full Article: Source

Copper Climbs With Metals, Miners as China Data Improves Outlook

Posted on 14 April 2016 by VRS  |  Email |Print

Industrial metals and mining shares jumped as Chinese trade data showed recovering demand in the biggest consumer of the commodities. Freeport-McMoRan Inc., the biggest publicly traded copper miner, headed for its highest closing price in five months.
China’s overseas shipments grew 11.5 percent in dollar terms in March from a year earlier, compared with a 25 percent slump in February, when factories and offices were closed for a week-long holiday. Copper imports rose for the first time this year, gaining 36 percent on the month to a record 570,000 metric tons………………………………………..Full Article: Source

South America Suffers From End of Commodities Boom

Posted on 13 April 2016 by VRS  |  Email |Print

World Bank foresees second year of economic contraction in Latin America and the Caribbean. The economies of Latin America and the Caribbean will likely contract for a second consecutive year, dragged down by South American countries that rely heavily on commodities and are more exposed to the slowdown in China, the World Bank said Tuesday.
In its semiannual report on the region, the World Bank said it expects output to shrink 0.9% from 2015 as the region enters its fifth year of economic slowdown………………………………………..Full Article: Source

Damaged Opec has lost the power to influence a world broken by debt

Posted on 13 April 2016 by VRS  |  Email |Print

Opec and non-Opec oil producers meet in Doha next Sunday to decide on what to do about the still depressed oil price. On the agenda is a proposal to freeze production at January or February levels, with a view to possibly cutting it at the following meeting in June.
Time was when such machinations would be front page news. Journalists would hang on the every word of Opec’s vainglorious overlords, and their pronouncements would be major market moving events, with sometimes profound repercussions for the global economy………………………………………..Full Article: Source

Is China Becoming An Even Bigger Player In The World’s Gold Market?

Posted on 12 April 2016 by VRS  |  Email |Print

China, the world’s largest producer and consumer of gold, may be expanding its presence in the international gold market. According to a new story by the Wall Street Journal, low gold prices in recent years have driven a new wave of international gold asset acquisitions by Chinese companies.
Sprott Asset Management CEO Peter Grosskopf says China’s five or six gold companies are all better-positioned financially than their North American counterparts. “I have been in touch with all of them, and they all have plans for increasing assets overseas,” Grosskopf says………………………………………..Full Article: Source

Opec’s days as economic force are ‘over’

Posted on 11 April 2016 by VRS  |  Email |Print

‘The era of Opec as a decisive force in the world economy is over’ argues Daniel Yergin. Opec’s economic power is broken, says the unofficial historian of the oil industry, who has argued that the association of oil exporting countries has become irretrievably divided and is unable to reverse the current slump in crude prices.
Daniel Yergin, whose Pulitzer-prize winning book The Prize provides a comprehensive history of oil and power, said he believes the association’s economic prowess has been undone by its inability to agree on how to stop the oil crisis.Yergin, who is also vice-chairman of data provider IHS, said the recent disagreements among Opec members have revealed how weak the organisation now is………………………………………..Full Article: Source

OPEC’s political agenda and the price of oil

Posted on 08 April 2016 by VRS  |  Email |Print

Because we trade ProShares Ultra Bloomberg Crude Oil and ProShares UltraShort Bloomberg Crude Oil as that relates to West Texas Intermediate (WTI), and because the words of OPEC largely influence those prices, the politics surrounding oil is immediately entertaining, and of special interest, to me.
In this case, I’m talking specifically about Saudi Arabia and Iran. Of course, there’s more going on in the oil space than just what we’re seeing from these two countries, but the price of oil has recently been influenced what Saudi Arabia has said about participating in a production freeze when OPEC meets with Russia on April 17………………………………………..Full Article: Source

Oil prices lower on IMF’s ‘not-so-good news’

Posted on 06 April 2016 by VRS  |  Email |Print

Crude oil prices moved lower for a second straight day as the International Monetary Fund gauged the prospects of “mediocre” economy momentum. The IMF warned Chinese growth patterns may have a lingering ripple effect on the global economy.
Chinese slowdown last year dragged on broader economic momentum and 2016 started with a hiccup following steep declines in the benchmark Shanghai Composite Index. Speaking in Germany, IMF Managing Director Christine Lagarde said the global economy was moving forward and there were no signs of imminent crisis………………………………………..Full Article: Source

Gold is the pile of poker chips in the next global crisis

Posted on 06 April 2016 by VRS  |  Email |Print

Countries around the world are acquiring gold at an accelerated rate in order to diversify their reserve positions. This trend, combined with the huge reserves held by the U.S., Eurozone and the IMF amount to a shadow gold standard.
The best way to evaluate this shadow gold standard among various countries is to use the ratio of gold to the gross domestic product, (GDP). This Gold-to-GDP ratio can easily be calculated using official figures and compared across countries to see where real gold power resides………………………………………..Full Article: Source

Crude oil market to rebalance in 2016-17: Adnoc CEO

Posted on 05 April 2016 by VRS  |  Email |Print

Global crude oil prices should increase slowly over 2016 and 2017, as supply and demand rebalances, the CEO of state-owned Abu Dhabi National Oil Co., or ADNOC, said Monday. “Over the last few weeks, we have seen some recovery in prices. While we expect to experience continue volatility in the short term, we expect to see a slow but upward improvement in prices in the medium term”, ADNOC CEO Sultan al-Jaber said in an interview with official news agency Wam.
“Overall, we think 2016 and 2017 will be the years during which markets will start to rebalance the gap between demand and supply, barring unforeseen events”, he added………………………………………..Full Article: Source

Saudi Arabia will only freeze its oil output if Iran does so - and it won’t

Posted on 04 April 2016 by VRS  |  Email |Print

The recovery in the price of oil may not be sustainable as Iran chooses to play hard ball. There’s quite a way to go yet. Burgeoning oil-producer unity, which was leading toward an accord in Doha to cap output, came under immense strain as Saudi Arabia’s deputy crown prince said the kingdom’s commitment depended on regional rival Iran, which has already ruled out its participation.
If any producer increases output - and Iran has made clear its intention to do so - Saudi Arabia will likewise boost sales, Mohammed bin Salman said this weekend in an interview with Bloomberg………………………………………..Full Article: Source

3 Ways to Turn Metal Into Cash

Posted on 01 April 2016 by VRS  |  Email |Print

Precious metals are volatile in the best of times. Nowadays, the price swings for investors is like being attached to a tennis ball at Wimbledon. The swings can be rapid, violent and go in either direction. Then they can swing right back.
Worse, however, is that before and after the financial crisis, there is no clear long-term direction for precious metals. See, the great thing about stocks is that they have a long-term upward bias. Over time, stocks go up. Precious metals don’t. That’s why I don’t believe they have a place in a long-term diversified portfolio………………………………………..Full Article: Source

The Extend-and-Pretend Oil Market

Posted on 31 March 2016 by VRS  |  Email |Print

See, OPEC: Janet Yellen knows how to do a freeze. Or, rather, a very slow thaw.The Federal Reserve Chair’s reassurance of a gradual approach to raising interest rates helped revive an oil market losing its fascination with OPEC’s chatter.
(Good job, too, what with Saudi Arabia and Kuwait announcing on the same day they would actually restart a field shut down in 2014. Clearly, the supply freeze is a complicated affair.)So, too, though, is the Fed’s relationship with oil. And if you want to see how frozen, low rates can wreak havoc, cast your mind back to the housing crisis………………………………………..Full Article: Source

OPEC oil output rises in March as Iran, Iraq growth offsets outages

Posted on 31 March 2016 by VRS  |  Email |Print

OPEC oil output is rising in March, a Reuters survey found, as higher supply from Iran after the lifting of sanctions and near-record exports from southern Iraq offset maintenance and outages in smaller producers.
The survey also found no major change in production in top exporter Saudi Arabia - another sign that Riyadh is serious about freezing output to support prices, which hit a 12-year low near $27 a barrel in January but have since recovered to $40. Producers are meeting on April 17 in Qatar to discuss the plan………………………………………..Full Article: Source

Riding out the commodities storm

Posted on 30 March 2016 by VRS  |  Email |Print

The era of oil shocks is far from over. In the past two years, oil prices have been in a free-fall, tumbling from US$100 (RM401.5) a barrel to around US$30. Frighteningly, nobody knows for sure where the bottom is. The International Energy Agency optimistically predicts a rebound to US$80 a barrel in 2020.
Calculation by the Federal Reserve Bank at St Louis proposes oil prices could drop all the way to zero by mid-2019. This by no means suggests that oil will be offered for free. The conclusion is based on a model that combines inflation expectations with oil prices. What the study does point to is the contradiction of economic data and the roller-coaster nature of the oil market………………………………………..Full Article: Source

OPEC’s Little Helper

Posted on 29 March 2016 by VRS  |  Email |Print

Oil ministers from OPEC and non-member countries are looking hard for a recovery in prices, and are hoping their meeting next month will produce an output freeze that can be a first step toward that goal.
They’re getting some surprise help from Iraq, the member which added more to supply last year than any other country, and that’s due in large part to a change in fortunes in Kurdistan.The Kurdish Regional Government had planned to be overseeing production of 1 million barrels a day of oil by now. Instead, it faces declining output, recurring difficulties in getting its oil to market and renewed pressure from federal authorities………………………………………..Full Article: Source

Russia near to critical US$48 oil price for recovery

Posted on 24 March 2016 by VRS  |  Email |Print

Oil prices need to hit US$48 a barrel in order for the Russian economy to achieve the stimulus it needs and consumer confidence to return, says one analyst as numbers this week indicate a genuine strengthening of the commodity.
IHS Global European LVS Forecasts manager CEE, Tatiana Hristova outlined the importance of hitting the near US$50 mark, but the last few days alone have seen it reach US$42. “The trend unfortunately leans towards the pessimistic forecast – US$38 a barrel,” Hristova noted. “Two years down the road [perhaps] US$48 – that is a critical level for the Russian economy. The rebound with Russia will be a lengthy process – US$80 we expect by 2020 and US$100 maybe by 2026.”……………………………………….Full Article: Source

Doctor Copper Hiding in Shanghai Warehouse

Posted on 24 March 2016 by VRS  |  Email |Print

The price of copper has risen as China keeps buying this industrial metal, sending positive signals about the state of demand in its economy. But there is evidence that the metal is just being stockpiled, raising questions about what those signals actually say.
Instead, a rebound that has added 15% to the price of copper since mid-January could be more about technical factors and a cheaper greenback than resilience in Chinese demand………………………………………..Full Article: Source

Aluminum emerges as most widely used base metal across the globe

Posted on 22 March 2016 by VRS  |  Email |Print

Base metals are crucial in the growth of the infrastructure, manufacturing, and utilities sectors of a country. Base metal mining refers to the mining of the major industrial non-ferrous metals such as nickel, lead-zinc, copper, tin, and aluminium.
Rapid infrastructure development across the globe has propelled the growth of the global base metal mining market. The global base metal mining market is expected to expand at a CAGR of 5.01% during the period between 2015 and 2023. In terms of volume, the overall market stood at 103.33 million metric tons (MMT) in 2014 and is projected to reach 160.19 MMT by 2023………………………………………..Full Article: Source

Saudi Arabia Won’t Let Oil Prices Stay Over $40

Posted on 21 March 2016 by VRS  |  Email |Print

Saudi Arabia faces a stark choice: either let markets crush American frackers or watch American frackers crush markets. After testing the upper twenties for a couple times, oil prices have staged a huge rally lately, trading above the $40 mark. Energy companies have rallied along, helping major Wall Street averages race towards new highs.
But the oil rally may not last for too long. Saudi Arabia won’t let it last, in our opinion. Once, Saudi Arabia liked higher oil prices. The higher the better, as it will bring more revenues to the royal coffers. That was back in the old good days when Saudi Arabia was the world’s largest oil producer and OPEC’s boss………………………………………..Full Article: Source

Odds on, odds off: London gold market seemingly confused on best route forward

Posted on 18 March 2016 by VRS  |  Email |Print

With Cheltenham races this week, everyone is in betting mood. It would appear that the cards could be stacked in IntercontinentalExchange’s favor, as the operator has come up as an outside favourite to possibly succeed the London Bullion Market Association ‘request for proposal’ to reform the London gold market.
Why? Because the other two rumored exchanges involved in the process — the London Metal Exchange and CME Group — have already been touted, maybe? “The market is currently built on hearsay, and rumors,” said one source close to the situation………………………………………..Full Article: Source

Oil Production Freeze to Stabilize Market by 2017

Posted on 17 March 2016 by VRS  |  Email |Print

Earlier in the day, Novak said that major oil producers would meet in the capital of Qatar, Doha, on April 17 to discuss the agreement on oil production freeze.
“If such agreements will be reached, the re-balancing will be reduced according to our estimates, to the term from six to nine months. At the end of 2016, in the beginning of 2017 we could see the balance of supply and demand, and consequently, the stabilization of the oil market,” Novak told reporters. Unless the deal is agreed on, the oil market will reach the balance in late 2017, Novak said………………………………………..Full Article: Source

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