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Commodity Funds Are Struggling in Low-Volatility Environment

Posted on 17 September 2014 by VRS  |  Email |Print

Commodity hedge funds, which tend to perform the best when volatility spikes, have suffered in some areas this year with wrongly timed bets. Winners include Duet Commodities, Cumulus Energy, Merchant Commodity, whereas Brevan Howard Commodities Fund, Armajaro Commodities and Andurand Capital had a tough run through most of the year.
The recent surge in volatility has helped some, but most of the gains came from natural gas and soft commodities. Oil and precious metals have not done any favors to hedge funds who had major positions as prices tumbled………………………………………Full Article: Source

Libya, Iraq Insecurity May Hit Future OPEC Supply Prospects

Posted on 16 September 2014 by VRS  |  Email |Print

Amid a continuing slide in global oil prices, the head of OPEC has said political insecurity in Iraq and Libya could affect the oil-producing cartel’s future output prospects.
In an interview at the Organization of the Petroleum Exporting Countries’ headquarters, Secretary-General Abdalla Salem el-Badri said that while Iraq has great potential to grow oil production, it needs to solve its security problems. “If there is no security, there will be no investment,” he said. “If there is no investment, there will be no additional supply.”……………………………………….Full Article: Source

Why Goldman Sachs is Wrong on Gold

Posted on 16 September 2014 by VRS  |  Email |Print

Wall Street powerhouse Goldman Sachs has recently reiterated its negative view on gold, which it has held for the past year. However, it is now doubling down on this view and advising clients to actually go short the metal. Jeff Currie, head of commodity research at Goldman noted “Our target is really driven by the view that we think that the Fed will ultimately be the dominate force here and put more downward pressure [on prices]“.
While I am in agreement with Goldman that the Fed will be the dominant force behind the price of gold, I believe the central bank will soon be back into the QE business, rather than raising interest rates and crushing the dollar price of gold………………………………………..Full Article: Source

How poor countries seemed to be catching up with rich ones

Posted on 15 September 2014 by VRS  |  Email |Print

If the 20th century belonged to the rich countries of North America and Europe, the thinking among some economists goes, then the 21st will be the era of the emerging world. Economic growth across emerging markets has been scorching since 2000. Some of the largest countries, like India and China, managed growth rates above 10% per year. Continued growth at such rates would mean a process of “convergence” with the rich world.
That would mean higher living standards in developing countries and a shift in the balance of economic and political power. Yet those prospects seem to be diminishing. Growth rates are dropping across emerging markets, from the largest—including countries like Brazil and Russia that are now in recession—to the smallest. As a result, the rate of convergence has dropped to almost zero. What was driving convergence, and why has it stopped?……………………………………….Full Article: Source

Commodity price slump is a matter of perspective

Posted on 12 September 2014 by VRS  |  Email |Print

Commodity prices may have come under pressure this year, but they are still 115 per cent above their 1990s average, with iron ore and oil up over 500 per cent, according to a long-term analysis of commodity prices by HSBC.
But taking an even long-term view back to the 19th century, commodity prices are actually about normal, HSBC found. In the future, sugar and meat prices will increase sharply, oil will go up further, and metal prices will remain strong, the bank’s economists predict………………………………………..Full Article: Source

Silver Loses Its Polish

Posted on 12 September 2014 by VRS  |  Email |Print

It hasn’t been a good day for precious metals. We already reported that gold is on its way to its fourth straight day of declines thanks to a strong U.S. dollar and falling demand for a safe haven. But silver has also taken a thumping, and earlier today fell to its lowest price in 14 months. That took silver-focused ETFs along for the ride.
Silver futures for December delivery dropped 1.5% to $18.65 an ounce after earlier falling to $18.57, the lowest price since June 28, 2013. Checking in on solver ETFs, the iShares Silver Trust (SLV) fell 1.9% to $17.90. The Proshares Ultra Silver (AGQ) fell 3.6% to $55.40, while the ProShares UltraShort Silver (ZSL) rose 3.8% $91.03………………………………………..Full Article: Source

OPEC says world will need less of its oil next year

Posted on 11 September 2014 by VRS  |  Email |Print

OPEC said demand for its crude oil will be lower than expected next year, with a surge in US output potentially bringing its production to levels not seen since the past decade.
In its monthly oil-market report, the Organization of the Petroleum Exporting Countries said it had lowered the estimate of demand for its crude by 200,000 barrels a day for 2015 and by the same amount for this year. As a result, markets will need 300,000 barrels a day less of OPEC crude next year, it said………………………………………..Full Article: Source

Limited physical demand poses risk for Gold: Barclays

Posted on 08 September 2014 by VRS  |  Email |Print

Limited physical demand for gold will put the yellow metal under downside risk, a report by Barclays said. The strength of the dollar has weighed upon gold, but prices have held up relatively well, considering the magnitude of the move in the currency.
Macro data from the US have been better than expected, increasing market speculation of earlier rate hikes. While in Europe, the ECB rate cut and ABS purchase programme to be launched in October have driven the euro to weaken further against the dollar. The EUR/USD is now trading at levels last seen in July 2013 on the back of the ECB announcement and expectations for a Fed rate hike next year………………………………………..Full Article: Source

Why the crisis in Ukraine isn’t saving gold

Posted on 05 September 2014 by VRS  |  Email |Print

Whenever a geopolitical crisis rears its head—such as the one slowly unfolding between Russia and Ukraine—Wall Street can be quick to tie gold’s daily moves to any belligerent or peaceful headlines. Many turn to bullion in times of turmoil, viewing gold as a safe haven asset that rises when situations gets scary.
But according to gold experts, that betrays a basic misunderstanding of how the gold market works. “I don’t think the geopoliticals are doing anything for gold. And the only time they do is if they destabilize the equity market,” said Edward Meir, senior commodity consultant with INTL FCStone………………………………………..Full Article: Source

Did Opec Miss the Shale Boat?

Posted on 04 September 2014 by VRS  |  Email |Print

Opec missed the fracking bandwagon according to this article that includes quotes from a secret letter written by Prince Al-Waleed Bin Talal, a high-ranking member of the Saudi royal family, that drew attention to the threat posed by non-Opec unconventional resource production growth.
“In addition to the many discoveries of oil and gas in the U.S., Canada and Australia,” the prince wrote, “there are also great discoveries of shale gas, which will lead to a reduction of consumption of our oil.” It does not appear conditions exist in Opec nations that would facilitate similar levels of shale development seen in North America………………………………………..Full Article: Source

Policy uncertainty threatens to slow renewable energy momentum

Posted on 02 September 2014 by VRS  |  Email |Print

IEA forecast sees renewable power as a cost-competitive option in an increasing number of cases, but facing growing risks to deployment over the medium term. The expansion of renewable energy will slow over the next five years unless policy uncertainty is diminished, the International Energy Agency (IEA) has said in its third annual Medium-Term Renewable Energy Market Report.
According to the report, power generation from renewable sources such as wind, solar and hydro grew strongly in 2013, reaching almost 22% of global generation, and was on par with electricity from gas, whose generation remained relatively stable………………………………………..Full Article: Source

Brent Oil Extends Two-Month Slump Amid OPEC Expansion

Posted on 02 September 2014 by VRS  |  Email |Print

Brent crude extended a two-month slide as OPEC’s production was seen increasing and manufacturing gauges in Europe and China missed estimates. West Texas Intermediate fell in New York.
Futures slid as much as 0.6 percent in London, having retreated more than $9 in July and August. The Organization of Petroleum Exporting Countries boosted output by 891,000 barrels a day to 31 million in August, the highest level in a year, estimates compiled by Bloomberg show………………………………………..Full Article: Source

How to Simplify Commodities

Posted on 01 September 2014 by VRS  |  Email |Print

Investors have long known that adding a dash of commodities to their portfolios can be beneficial to their wealth. The only problem has been implementing this strategy. It’s difficult to know which commodities are a good bet, and broad commodities-focused indexes are inadequate. Investors also worry that futures prices don’t always track the spot market.
But veteran economist David Ranson, at Cambria, Calif.-based HC Wainwright & Co. Economics, might have a solution to all these potential problems: investing in just four commodities………………………………………..Full Article: Source

Iraq and Libya spark oil production fears

Posted on 29 August 2014 by VRS  |  Email |Print

The world fears an oil crisis will occur if the security situation in oil-producing countries does not improve, especially in Iraq and Libya, two prominent producing countries. Everyone is concerned and is expecting the suspension of the Iraqi oil supply at any time now. If an Iraqi oil disaster occurs — especially if production allocated for export is halted — oil prices will easily hit an average of $130 per barrel and will only cease to fluctuate when Iraq regains calm and stability.
There is an urgent demand on Iraqi oil in both the short and long term. The suspension of production is equivalent to 1 million barrels per day (bpd) of Libyan oil supplies and nearly 3.3 million bpd of Iraqi supplies………………………………………..Full Article: Source

All’s Fair In Love And War And Oil

Posted on 27 August 2014 by VRS  |  Email |Print

An Iraqi Kurdish crude oil tanker has been seen floating off the coast of Israel after offloading its cargo, ship tracking data has shown. If true, the transaction would be in open defiance of Baghdad, with whom Israel has no diplomatic or commercial relations. Furthermore, any commercial transaction between an Arab country and Israel violates the ruling of the Arab Boycott Bureau that bans all commercial exchanges with the Jewish state.
But it would not be the first time that Kurdish oil has found its way into the Israeli market. Iraqi Kurdistan, although autonomous, is still in principle supposed to conduct its oil transactions through Baghdad. Selling into the oil market directly and independently of Baghdad provides the Kurds in northern Iraq with much needed funds. It also helps the Kurds move away from Baghdad and toward independence, which it has made no secret of wanting………………………………………..Full Article: Source

How to Invest in Silver Today for Double-Digit Gains

Posted on 27 August 2014 by VRS  |  Email |Print

If you’ve been watching silver for some time, you know it’s been in the doghouse. After peaking at $49 back in April 2011 the white metal is down 60%, having languished between $19 and $22 for the past two years.
But a confluence of factors is building that make today’s silver prices look downright cheap. Here’s how the bull is going to run - and how you can ride it all the way up from here… To explain how the precious white metal behaves, I like to use the phrase: silver is like gold - on steroids………………………………………..Full Article: Source

US Mint Platinum Coins Bypassed in Rush for Gold

Posted on 22 August 2014 by VRS  |  Email |Print

Five months after the U.S. Mint began producing coins made with platinum, sales have all but collapsed as investors continue to favor gold and silver.
“It’s not considered a currency,” said Jason Carstensen, a medical-sales representative in Ventura, California, who spends about $2,000 a month on coins. Gold and silver have value as hedges against a devaluation of the dollar, while platinum is viewed as an industrial commodity, he said………………………………………..Full Article: Source

OPEC output dropped, Nigeria’s output increased in July

Posted on 19 August 2014 by VRS  |  Email |Print

Crude oil production from the Organisation of Petroleum Exporting Countries (OPEC) dipped by 30,000 barrels per day (bpd) in June to 29.94 million bdp, according to the latest Platts survey of OPEC and oil industry officials and analysts.
Meanwhile, Nigeria’s oil production rose to 1.98 million barrels per day in July, the highest since March this year. The country’s production stood at 1.87mb/d in March. The survey showed Iraq’s output plunge of 160,000 b/d was largely offset by production increases from several other OPEC member countries………………………………………..Full Article: Source

World Awash in Oil Shields Markets From 2008 Price Shock

Posted on 15 August 2014 by VRS  |  Email |Print

Fighting across Iraq, Libya, Ukraine and Gaza, and an accelerating economy, should mean higher oil prices. Yet crude is falling. Six years ago, oil soared to a record $147 a barrel as tension mounted over Iran’s nuclear program and the world economy had just seen the strongest period of sustained growth since the 1970s. Now, West Texas Intermediate, the U.S. benchmark price, has traded below $100 for 10 days and Brent, the European equivalent, tumbled to a 13-month low.
What’s changed is the shale fracking boom. The U.S. is pumping the most oil in 27 years, adding more than 3 million barrels of daily supply since 2008. The International Energy Agency said yesterday that a supply glut is shielding the market from disruptions. Bank of America Corp., Citigroup Inc. and BNP Paribas SA concur………………………………………..Full Article: Source

Gold loses shine as Chinese curb jewellery purchases

Posted on 15 August 2014 by VRS  |  Email |Print

India regained its position as the world’s leading gold buyer in the second quarter as Chinese demand for jewellery, gold coins and bars dropped sharply from record levels amid a government crackdown on corruption. Soaring purchases by retail customers in 2013 helped China overtake India as the world largest gold consumer for the first time.
The buying frenzy, which led to a temporary shortage of physical gold stocks, was sparked by the 28 per cent fall in the precious metal’s price last year, the worst performance in more than three decades………………………………………..Full Article: Source

Gold Firmer s Geopolitics Keeps Sellers At Bay

Posted on 13 August 2014 by VRS  |  Email |Print

Gold prices are modestly higher in subdued early U.S. trading Tuesday. Some safe-haven demand is still present in the market place, evidenced not only by the firmer gold prices but also by a stronger U.S. dollar and higher U.S. Treasury prices. December Comex gold was last up $3.20 at $1,312.50 an ounce. Spot gold was last quoted up $0.80 at $1,311.75. December Comex silver last traded up $0.014 at $20.175 an ounce.
There are still geopolitical hotspots in the world that have the attention of the market place: civil war in Iraq, in which the U.S. has just injected military force; the Russia-Ukraine tensions; and the Israel-Hamas fighting. ……………………………….Full Article: Source

Global growth in use of gasoline outpaces diesel in 2014

Posted on 08 August 2014 by VRS  |  Email |Print

Unlike in recent years, growth in global gasoline consumption is outpacing diesel growth in 2014. At the same time, new refining capacity engineered to produce more distillate than gasoline is coming online in 2014. The narrowing spread for December 2014 futures contracts demonstrates how these two factors may be temporarily leading to a tighter global gasoline market than was expected at the beginning of the year.
On July 8, the futures price premium of New York Harbor ultra-low-sulfur diesel (heating oil) over reformulated blendstock for oxygenate blending (RBOB) for December 2014 delivery fell to 22 cents per gallon on the New York Mercantile Exchange (Nymex)………………………………………..Full Article: Source

Manipulation of gold is self-evident

Posted on 08 August 2014 by VRS  |  Email |Print

Eighty years of manipulating gold markets….stock, bond and currency markets. The manipulation of markets is not exclusive to gold. Stock, bond and currency markets are also manipulated, but there is one difference. Gold’s price is manipulated downward, while stock, bond and currency markets are typically manipulated upward.
In February 2014, Bloomberg reported there were indications that gold has been manipulated for the past decade………………………………………..Full Article: Source

Silver To Eventually Benefit From Rising Industrial Demand

Posted on 06 August 2014 by VRS  |  Email |Print

ETF Securities looks for improving industrial demand to ultimately underpin silver, although worries about rising U.S. interest rates may pressure precious metals in the near term.
“From a fundamental perspective, the strong correlation to gold continues to pressure the silver price lower….Largely to blame is the stronger U.S. dollar and improving investor sentiment, which is being buoyed by the robust U.S. recovery and the re-rating of the potential for tighter Fed policy as the central bank remains on track to wind down its bond buying by year-end,” said the provider of metals exchange-traded funds………………………………………..Full Article: Source

Energy: Exports and Sanctions, Criss-Crossing the Atlantic

Posted on 04 August 2014 by VRS  |  Email |Print

It’s been a busy week in energy, particularly on the geopolitical front, with Washington at a loss over exactly whose side to take in the Iraq-Kurdish oil showdown, the implications of new sanctions against Russia unclear at best, and continued conflict and chaos in Iraq, Syria and Libya that has speculators reaching the limits of their predictive powers.
On Monday, a Texas judge ordered US Marshalls to seize a tanker carrying a million barrels of Kurdish oil off the US coast—at the behest of the Iraqi authorities in Baghdad–but two days later the story is that the tanker is too far offshore to be in Texas’ jurisdiction, so some more time has been bought for the Kurds to sell their wares on the international market………………………………………..Full Article: Source

Peak oil proponents still dancing around reality

Posted on 04 August 2014 by VRS  |  Email |Print

The debate over whether we are running out of oil sometimes resembles the medieval controversy over how many angels could dance on the head of a pin. By redefining the size of the pin and the agility of the angels, today’s “peak oil” proponents have managed to continue the argument.
The characters have changed though. Matthew Simmons, author of Twilight in the Desert, casting doubt on Saudi oil production, died in August 2010, and the Oil Drum website closed down last September. New disputants, including economist James Hamilton from the University of California, and Stephen Kopits, the managing director of the consultancy Douglas-Westwood, argue that oil production is limited by geology and is a severe drag on economic growth………………………………………..Full Article: Source

North American oil output versus OPEC

Posted on 01 August 2014 by VRS  |  Email |Print

GlobalData has said that global oil demand in 2014 is forecast to increase by approximately 1.2 million bpd compared to levels last year, while non-OPEC members’ production will grow by approximately 1.6 million bpd which will reduce the call for OPEC production. GlobalData’s research has also said that a significant increase in non-OPEC production is forecast to occur, particularly in North America, where crude oil and condensate production will increase by approximately 1.3 million bpd.
Carmine Rositano, Managing Analyst, Downstream Oil & Gas, GlobalData, said, ‘crude oil production increases are also expected in South America, the Former Soviet Union and from the greater use of biofuels. This will more than offset slightly lower production anticipated in the North Sea and Mexico………………………………………..Full Article: Source

World oil demand in 2015 forecast to grow 1.2 mb/d

Posted on 31 July 2014 by VRS  |  Email |Print

Despite some weakness in the first half of the year, the world economy continues to recover, OPEC Monthly Oil Market Report for July 2014 said. Global GDP growth in 2014 is now forecast at 3.1 percent, slightly higher than the estimated 2.9 percent for 2013. The US experienced a surprisingly large contraction in economic activity in the first quarter due to severe winter weather, leading to a downward revision in US GDP growth to 1.6 percent from 2.4 percent previously.
However, with the US economy expected to rebound and continued large monetary stimulus in the Euro-zone and Japan, the OECD is seen growing by 1.7 percent in 2014 and 2.0 percent in 2015………………………………………..Full Article: Source

Commodities: Probability of El Nino developing falls to 50%

Posted on 30 July 2014 by VRS  |  Email |Print

The commodities complex saw few changes on Monday, although geopolitical concerns buoyed gold prices while oil futures traders stayed on the sidelines ahead of weekly supply data scheduled for release on Wednesday.
President Barack Obama was expected to meet with four of his European counterparts, with the possibility of new sanctions being levied on specific sectors of the Russian economy a distinct possibility. Gold futures for delivery in December ended trading $3.4 lower at $1,305.8/oz. on COMEX. Front month West Texas crude futures slipped by 20 cents to $101.67/barrel on NYMEX………………………………………..Full Article: Source

Inflation - Are Commodities Talking to Us?

Posted on 29 July 2014 by VRS  |  Email |Print

Markets often do talk to us, if only we would listen. Our ears serve as only part of listening. An open mind is also required. Regrettably, minds receptive to new thoughts and questions have been somewhat outmoded in the investment world for many years. Why else do so many seem to ignore what commodities are saying?
Commodities may be saying that complacency on prices might be inappropriate. In the chart below is plotted the year-to-year percentage change for the U.S. consumer price index, black line, and a like measure for the median U.S. CPI as prepared by the Cleveland Federal Reserve Bank………………………………………..Full Article: Source

Industrial metals emerge stronger in 2014, bullion, energy weakness continues

Posted on 28 July 2014 by VRS  |  Email |Print

Industrial metals have emerged stronger in 2014 while weakness continues in energy and bullion complex that emerged recently. The gains in base metals have been driven by increased speculation about a rising supply deficit in aluminum over the coming two years as demand keeps rising at a time where some fo the major producers outside China have reduced production, noted Ole S Hansen, Head of Commodity Strategy at Saxo Bank.
The general imporovement in economic data out of China and the US, the world’s two biggest consumers by far, has also helped improve sentiment during the past couple of months………………………………………..Full Article: Source

Why Gold Attracts Conspiracy Theorists

Posted on 25 July 2014 by VRS  |  Email |Print

Few things attract as many conspiracy theories and theorists as gold does. The most enduring conspiracy theory seems to be that central banks around the world are colluding to keep a lid on gold prices. The logic here presumably is that a spike in gold prices could be construed by market participants as a harbinger of inflation, and if it occurred, would force central banks to raise interest rates from their artificially low levels (2009 – circa 2014).
Another sub-plot is that the biggest gold exchange-traded funds (ETFs) have a huge shortfall in the amount of gold they hold. Here are three reasons why the noble metal is a favorite subject for conspiracy theorists everywhere……………………………………….Full Article: Source

OPEC exports more petroleum products to Asia-Pacific in 2013

Posted on 24 July 2014 by VRS  |  Email |Print

OPEC member countries exported 4.5 mb/d of petroleum products in 2013, with the largest share devoted to Asian and Pacific countries (3.1 mb/d or 68.5 percent), the Organization of the Petroleum Exporting Countries (OPEC) said its latest “Annual Statistical Bulletin” released Tuesday.
The report noted that European and North American countries received smaller shares of OPEC petroleum product exports (0.6 mb/d or 14.0 percent and 0.2 mb/d or 5.2 percent, respectively). The refinery capacity of OPEC member countries increased by a 4.9 percent during 2013 compared to 2012. In 2013, OPEC Member Countries held 11.0 percent of total world refinery capacity, up from 10.5 percent in 2012………………………………………..Full Article: Source

OPEC’s Two-Decade Ride on Global Growth Stalls

Posted on 23 July 2014 by VRS  |  Email |Print

For the past two decades, growth in the global economy spelled higher revenues for the Organization of Petroleum Exporting Countries. Not any more.
The CHART OF THE DAY shows how last year was the first since 1993 that the value of OPEC’s total crude exports didn’t track the direction of global gross domestic product. The bottom panel shows how the group supplying about 40 percent of the world’s oil fetched lower average prices and also shipped fewer barrels year on year………………………………………..Full Article: Source

OPEC Says Oil Production, Market Share Fell in 2013

Posted on 21 July 2014 by VRS  |  Email |Print

OPEC said Friday its crude production and market share fell last year as a boom in U.S. shale dents demand for its oil. In an annual statistical report, the Organization of the Petroleum Exporting Countries said its collective crude production was down 2.5% during 2013 on an annual basis.
OPEC’s share of total global production in 2013 averaged 43.4%, down from the 44.6% in 2012, it said. Global oil production and demand rose last year but was largely captured by OPEC’s rivals, notably a rise in nonconventional U.S. production………………………………………..Full Article: Source

Platts Survey: OPEC Missed its June Target of 30,000 barrels Per Day

Posted on 21 July 2014 by VRS  |  Email |Print

Oil production from the Mideast-dominated Organization of the Petroleum Exporting Countries (OPEC) dipped by 30,000 barrels per day (b/d) in June to 29.94 million b/d, according to the latest Platts survey of OPEC plus industry officials and analysts. The survey showed Iraq’s output plunge of 160,000 b/d in some war-torn areas was largely offset by production increases from several other OPEC member countries.
“Small though it may be, a dip in OPEC output is the last thing the consuming world wants to see,” said John Kingston, Platts global director of news. “OPEC had seen the call on its crude averaging 30.4 million b/d in the second half of this year, so any drop in production from the organization – even an involuntary one – could be viewed as a move in the wrong direction,” King added………………………………………..Full Article: Source

A Look At Gold Prices And Quantitative Easing

Posted on 17 July 2014 by VRS  |  Email |Print

Gold has been a bit reactionary over the past days bouncing around on geopolitical stress and words from the US Federal Reserve Chief. Mario Draghi just a month ago sent the metals market on a whirlwind when the central bank moved to help the eurozone recovery moving to negative interest rates. Lately global stress shifted from Iran to Ukraine and then to Iraq.
With tensions between Palestine and Israel reaching war, Iraq has been pushed off the front pages of the papers. Gold peaked just a week ago close to 1350 and tumbled yesterday to below 1295 and stands flat this morning at 1297.10 after Fed Chair Janet Yellen’s testimony before the US Senate. Yellen said U.S. labor markets are far from healthy and signaled the central bank would not be in a hurry to hike interest rates………………………………………..Full Article: Source

Global agri-commodities: Cocoa, Coffee top gainers Soybean, Corn, Wheat top losers

Posted on 17 July 2014 by VRS  |  Email |Print

Bearish trend is prevailing in most agri-commodities traded in Chicago Board of Trade (CBOT) and Intercontinental Exchange (ICE) amidst rise in acreage, record production estimates and falling demand.
Soybean has slumped more than $1.50 a bushel to trade under $11 for the first time in a year. Reuters analyst said that soybean still remains at an unusually large premium to its competitor rapeseed, the second widely produced and consumed oil seed in the world. Hence investors must be ready for further drop in soybean prices, the analyst said………………………………………..Full Article: Source

Goldman thrives as commods rivals melt away

Posted on 16 July 2014 by VRS  |  Email |Print

Goldman Sachs’ commodities business, known for its muscular trading operation, is rapidly expanding in a plainer and less politically charged area even as listless markets and increased regulation force rivals to beat a retreat. Commodity finance is among the fastest-growing segments of Goldman’s commodities business, the bank’s executives said.
“The financing side of the equation has gone from being a sort of appendage to being a really major organ for us,” Greg Agran, Goldman’s global co-head of commodities trading, said. “When we think about growth going forward over the next few years, I actually think the commodity finance business is one of the areas we are most excited about”………………………………………..Full Article: Source

Oil drops sharply as supply concerns ease

Posted on 16 July 2014 by VRS  |  Email |Print

Brent crude suffered its biggest one-day percentage fall since the start of the year as concerns about supply disruptions eased, leading investors to unwind bullish positions and sell futures contracts.
ICE August Brent fell to a three-month low of $104.39 a barrel, extending losses since the middle of June, when insurgents swept across northern Iraq, to more than 9 per cent………………………………………..Full Article: Source

Global oil supply and demand equation poses risks

Posted on 15 July 2014 by VRS  |  Email |Print

Looking ahead few years, global demand for oil will continue to increase because of rising prosperity in emerging economies. Supply, however, will still remain constrained. Soon, the world will not be able to produce all the oil it needs as demand is continually rising while supply is falling. According to International Energy Agency (IEA), oil consumption will rise by 56% between now and 2040, with China and India responsible for half of this increase in consumption.
Global oil demand for 2013 will probably be around 91.3 million barrels per day (mb/d). Demand will grow to 92.6 mb/d in 2014, according to the IEA……………………………………….Full Article: Source

Global oil demand expected to grow along with economy, cartel says

Posted on 11 July 2014 by VRS  |  Email |Print

The Organization of Petroleum Exporting Counties said Thursday it expected the world will need more oil because of improvements in the global economy. Global oil demand for 2015 is expected to grow by 1.2 million bpd to average 92.3 million bpd as the world economy picks up steam, OPEC said in its monthly market report.
“Despite some weakness in the first half of the year, the world economy continues to recover,” the report said. “Global gross domestic production growth in 2014 is now forecast at 3.1 percent, slightly higher than the estimated 2.9 percent for 2013.”……………………………………….Full Article: Source

No ‘gold rush’: Germany keeps reserves in the US

Posted on 08 July 2014 by VRS  |  Email |Print

Germany’s plan to bring back the nation’s gold reserves to Frankfurt by 2020 has fizzled, and instead has for now decided to leave $635 billion of gold in US vaults. Home to the world’s second largest gold reserves, worth $141 billion, Germany only keeps about one third of its gold ‘at home’, the rest is abroad.
45 percent is in the US Federal Reserve in New York, 13 percent in London, 11 percent in Paris, and only 31 percent in the Bundesbank in Frankfurt. “The Americans are taking good care of our gold, we have no reasons for mistrust,” Nobert Barthle, the German Parliament Budget spokesman, told RT……………………………………..Full Article: Source

Technology paves road to freedom from OPEC

Posted on 04 July 2014 by VRS  |  Email |Print

News out of Iraq has helped drive oil prices higher in recent weeks. One of the predictable results has been a slew of articles about how rising oil prices could thwart a U.S. economic resurgence. While that might be partially and temporarily true in the very short run, the reality is that the U.S. will have relatively stable energy prices for the foreseeable future.
In general, most of the articles miss the real reasons behind slow economic growth and are just breathy attempts to get pageviews. The main reason for the rangebound energy prices in America — which I discussed here — is the rapid pace of energy-related technology the past decade. ……………………………………….Full Article: Source

World Oil Markets Can Deal With Situation In Iraq – Lew

Posted on 03 July 2014 by VRS  |  Email |Print

US Treasury Secretary Jack Lew said on Tuesday there was ample oil production capacity to offset any supply disruptions that may occur due to the violence in Iraq. “I believe that world energy markets will be able to deal with the situation as it goes forward,” Lew said.
“I don’t think it’s in the interest of any of the parties in Iraq for there to be a severe disruption in supply,” he added. “There is sufficient capacity in the world right now to deal with whatever we need to deal with.”……………………………………….Full Article: Source

The Best Types of Gold to Buy Now

Posted on 24 June 2014 by VRS  |  Email |Print

Investing in gold is a great way to diversify investment portfolios, hedge against a financial crisis, and even protect against inflation. But with so many different types of gold to buy, finding the right gold investment can be a difficult task for retail investors.
One of the most popular types of gold investments is gold coins. There are numerous types of gold coins traded throughout the world, and they all have different weights, fineness, face values, and intrinsic values………………………………………..Full Article: Source

Extra responsibility for Saudi Arabia

Posted on 20 June 2014 by VRS  |  Email |Print

The recent OPEC meeting was a non-event to the extent that most of the world media failed to show up to cover the meeting. No wonder. A roll over of the existing 30 million barrels per day (bpd) was expected and what happened was exactly like before in similar meetings.
For quite some time, the organization under the leadership of Riyadh, has managed to come with a new working formula devoid of typical political maneuvering — namely, freezing discussions on quotas, keep an eye on the demand and supply fluctuations and adjust whenever necessary by pumping more oil or cut some, and at the same time leave the price to be determined by the market………………………………………..Full Article: Source

OPEC, the Phantom Menace

Posted on 17 June 2014 by VRS  |  Email |Print

From the Keystone pipeline to Ukraine to fracking and American self-sufficiency, Washington is abuzz about energy politics these days, but top U.S. policymakers continue to make mistakes when thinking about world energy markets.
For example, James Woolsey, a former director of the CIA and self-proclaimed energy hawk, argues that the Organization of the Petroleum Exporting Countries (OPEC) has a grip on global oil and gasoline prices so tight that the United States will never be free of its influence. Like most people, Woolsey wrongly believes that OPEC is a powerful cartel………………………………………..Full Article: Source

Saudi Arabia Proposes Reducing OPEC Meets From Twice To Once A Year

Posted on 16 June 2014 by VRS  |  Email |Print

Saudi Arabia has suggested OPEC meet just once a year, rather than twice, a sharp reduction from the days when the group met for up to seven times a year in the early 2000s. The OPEC meetings since 2012 have produced no policy change and Wednesday’s gathering in Vienna was no exception, sticking with its production target of 30 million barrels per day (bpd).
The 12-member cartel used to give traders more to worry about, meeting several times a year, convening emergency meetings at short notice and sometimes making surprise decisions as it tried to micro-manage the oil market………………………………………..Full Article: Source

China Commodity Loans Add to Surge in Offshore Borrowing

Posted on 13 June 2014 by VRS  |  Email |Print

The commodity-backed loans at the center of a probe into an alleged financial scam at a Chinese port are part of a ramp-up in offshore borrowing by Chinese companies that Beijing is looking to tamp down.
As Chinese authorities tightened credit at home in the past year, local firms instead looked abroad for financing. Asian-Pacific banks alone had $1.2 trillion in loan exposure to China at the end of 2013, up two-and-a-half times from 2010, according to Fitch Ratings………………………………………..Full Article: Source

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