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Opec’s 2015 oil revenues to slump to $446bn - EIA

Posted on 18 December 2014 by VRS  |  Email |Print

The amount Opec countries, excluding Iran, earn from net oil revenues next year is set to tumble to levels not seen for a decade as the dramatic slide in prices shows no signs of relenting.
Forecasts from the US Energy Information Administration - the wealthy nations’ energy watchdog - suggests revenue from oil exports next year will dip to $446bn - down 46 per cent on 2013’s income - as Brent crude is projected to average just $68 a barrel in 2015, compared to $109 a barrel last year…………………………………….Full Article: Source

Saudi Arabia Has its Reason for an Oil Price Drop, Others Need a Plan

Posted on 18 December 2014 by VRS  |  Email |Print

Not all producers will be hurt by a few years of lower prices. Let’s not forget that OPEC’s leading member, Saudi Arabia, has long believed that if oil prices are too high they undermine long-term demand for the country’s main export.
When prices hovered around $100/barrel, oil importing countries in the global north and the faster growing south, poured money into energy diversification and technologies to reduce emissions…………………………………….Full Article: Source

Is the end of QE bearish for gold?

Posted on 17 December 2014 by VRS  |  Email |Print

The conventional view is that Fed money creation is necessarily bullish for gold and that a tightening of monetary conditions beginning with the cessation of Fed money creation is necessarily bearish for gold. It’s strange that this view is popular given that gold was clearly hurt more than helped by the QE program that extended from October of 2012 through to October of this year.
If gold is now going to be hurt by a ‘tighter’ Fed, the implication is that regardless of what the Fed does it’s bearish for gold. If the Fed aggressively pumps money into the economy, it’s bearish for gold. If the Fed stops pumping money, it’s bearish for gold. If the Fed not only stops pumping money but starts hiking interest rates, it’s astronomically bearish for gold!…………………………………….Full Article: Source

Copper to gain on supply constraints

Posted on 17 December 2014 by VRS  |  Email |Print

The metal may inch towards $6,950/tonne. Base metals have witnessed a lot of ups and downs this year due to geo-political tensions arising out Russia -Ukraine standoff in the first half, followed by faltering growth in China during the second half.
Although efforts have been made by the People’s Bank of China, they have not been enough to contain the falling trend in base metals. In addition to this, the euro zone, possibly, slipping into a third recession since the resurfacing of financial crisis, has been a matter of concern……………………………………..Full Article: Source

Global agri-commodities prices likely to remain volatile in 2015

Posted on 16 December 2014 by VRS  |  Email |Print

Agricultural commodities are likely to remain volatile globally in 2015, with strong buying support on lows to keep prices elevated in the first half. However, global oversupply could pull these down in the second half.
A Rabobank study says the fundamentals in agri commodities appear more balanced through 2015, resulting in narrower trading ranges for many commodities versus 2014. On the demand side, growth has slowed in recent years. However, lower price levels should now encourage consumption growth, which will support prices. However, a strengthening dollar, uncertain Chinese demand growth, slowing biofuel demand and weakness in crude oil prices might spoil the party………………………………………Full Article: Source

Natural Gas Tops Commodity Gains as Traders Brace for Cold Month

Posted on 16 December 2014 by VRS  |  Email |Print

Natural gas climbed the most in almost two weeks as traders braced for a colder end of the month than previously forecast. Futures rose as much as 3.7 percent, the most since Dec. 2, making the fuel the best performer among 22 raw materials in the Bloomberg Commodity Index. Colder-than-normal temperatures are expected for the upper Midwest by Dec. 26, for Texas by Dec. 27 and the east coast by Dec. 28, forecaster Commodity Weather Group LLC in Bethesda, Maryland, said in an e-mailed report.
“The market is reacting to new forecasts pointing to a colder end to December,” Moses Rahnama, an analyst at London-based consultants Energy Aspects Ltd., said by e-mail today. “We don’t know how cold it will get, but definitely colder than previously forecast. Models are also pointing to possibly a colder January.”……………………………………..Full Article: Source

Precious Metals Starting To Show Bullish Signs

Posted on 15 December 2014 by VRS  |  Email |Print

We’ve believed that Gold would need to break $1100 before we thought a bottom could start to develop. While that could still be the case, we are starting to see building evidence that precious metals could be forming a bottom.
In the past we’ve written about the importance of Gold’s performance against other asset classes. Relative strength in Gold has preceded important bottoms in the Gold price during 2001, 2005 and 2008. That relative strength is starting to show. Below we plot Gold against various asset classes, which are noted in the chart. Several days ago Gold against foreign currencies (and the EUR) closed at a 15-month high………………………………………..Full Article: Source

Do oil and gold mix?

Posted on 12 December 2014 by VRS  |  Email |Print

Has gold finally bottomed out? And what does its prospects tell us about the outlook for oil? Three weeks ago, you may recall, I reached a bearish conclusion from my array of gold timing indicators that are based on the performance of the top-performing advisers.
Gold today is $33 higher than where it stood then, or 2.8%—largely on the basis of a big rally on Tuesday of this week, when bullion shot up by more than $40 an ounce. Have any of the top performers changed their minds because of recent action? As always in Hulbert On Markets, I turn to the top performers for answers………………………………………..Full Article: Source

Gold forecasts for 2015 - Scotiabank mining panel

Posted on 12 December 2014 by VRS  |  Email |Print

The most direct question to Scotiabank’s gold panel came from the audience at the end of a wide-ranging discussion of the gold market at the bank’s recently held mining conference: where would the price of gold go by the end of 2015?
Most of the panel cringed at the request, but nonetheless made their wagers (or almost so). Andy Montano, ScotiaMocatta director, went first. “If I give you a forecast, I guarantee you one thing it will be wrong,” he said. Still, he added, “I would say right where we are now.” Next up was Marcus Grubb, the World Gold Council’s (WGC) managing director of investment and strategy………………………………………..Full Article: Source

What Big Banks Are Saying About Commodities in 2015

Posted on 11 December 2014 by VRS  |  Email |Print

As 2014 winds to a close, several analysts have already published their predictions for the coming year, with the vast majority seeing the U.S. take the lead in the global economic recovery. On the commodities front, 2014 has been yet another difficult year, as a strong U.S. dollar put downward pressure on commodity prices.
This year, the energy sector came into the spotlight, as crude oil prices fell more than 30% on increased supply levels and slow global demand. Many believe the crude story will likely continue into the new year. Below, we highlight what big banks are saying about energy in 2015, as well as their outlook for the overall commodity market in the New Year………………………………………..Full Article: Source

Opec opens door to emergency meeting with oil downgrade

Posted on 11 December 2014 by VRS  |  Email |Print

Drop in global oil demand growth will raise bets that Opec will meet early next year to review output quotas amid ongoing slump in prices. Opec has slashed its oil demand growth forecast for next year in a move that could bring its members to the table in an emergency meeting to agree on cutting production in the first quarter of 2015.
The group, which is comprised of 12 oil producing states mainly from the Middle East, said Wednesday that it now expects the world will require 70,000 barrels per day (bpd) less oil next year than it had previously anticipated. The cartel now expects that total global oil demand could reach 92.26m bpd next year………………………………………..Full Article: Source

Market, not OPEC, will determine oil price: UAE official

Posted on 10 December 2014 by VRS  |  Email |Print

Market forces and the response of high-cost crude producers to the recent fall in prices will determine the cost of oil in the coming months, rather than OPEC, a United Arab Emirates (UAE) oil official said on Tuesday.
Prices have fallen more than 40 percent since June and Brent crude for January delivery hit $65.33 a barrel on Tuesday, its lowest since September 2009………………………………………..Full Article: Source

Not much change likely in Indian gold demand

Posted on 09 December 2014 by VRS  |  Email |Print

India’s gold demand might, it is believed, rise by no more than three per cent in 2015 over this year. Data compiled by rating agency ICRA forecasts the demand at 850 tonnes, compared to the 825 tonnes estimated in 2014.
The World Gold Council (WGC), which represents the mining industry, puts India’s demand between 850 and 950 tonnes in 2014. Easing import curbs, the government early this month withdrew the 16-month-old ‘80:20’ scheme, under which at least a fifth of any import consignment had to be supplied to jewellery exporters………………………………………..Full Article: Source

When Oil Becomes Optional

Posted on 08 December 2014 by VRS  |  Email |Print

Is this the beginning of the end for oil’s long, tyrannical reign? Amid turmoil in two of the world’s largest oil-producing regions, Russia and the Persian Gulf, the price of oil has declined from $110 in last summer to below $70 last week. Explanations for the drop are many, ranging from an oil glut resulting from booming U.S. shale oil production to a Saudi plot to make U.S. shale unprofitable by driving down the price.
Volatility in the price of oil is nothing new. The essential dynamic — the global economy riding a roller coaster in which the cost of crude jerks and swerves from a punishing $125 per barrel to a still-painful $60 to $70 — is well established. But over the past two years, prices stabilized in the range of $90 to $110 per barrel. Then, last summer, oil began its precipitous dive………………………………………..Full Article: Source

Platinum will be in deficit for full year: Barclays

Posted on 05 December 2014 by VRS  |  Email |Print

The first quarterly platinum supply and demand data show the platinum market swung into a surplus in Q3 14 to the magnitude of 155koz, as platinum prices fell by 13% over the quarter to close at $1293.1/oz. Producer inventory is estimated to have fallen by 15koz,according to Barclays.
The newly formed World Platinum Investment Council released the first quarterly analysis of platinum supply and demand fundamentals today. This is the first time quarterly data has been presented for platinum; historically, balances have been presented on an annual basis………………………………………..Full Article: Source

Drooping Commodities Hurt Down Under

Posted on 04 December 2014 by VRS  |  Email |Print

What a shocker! If you need a reason for why the Australian dollar and interest rates are likely to remain under pressure, then the third quarter growth data from Down Under is it. The Australian dollar was treated with extreme prejudice on Wednesday morning, with the currency tumbling more than half a U.S. cent to a fresh 4 ½ year low in the moments after headlines flashed the disappointing news that year-on-year growth of 2.7% had missed market expectations of 3.1% growth.
Worse still, nominal GDP contracted 0.1% in the quarter, the first decline since 2009. Welcome to life after the commodities boom. The waning of the massive investment in new mining and energy projects weighed heavily on the third quarter GDP numbers, so too moves by many miners to defer planned projects given the hammering of iron ore and coal prices………………………………………..Full Article: Source

What’s Driving Gold Now?

Posted on 04 December 2014 by VRS  |  Email |Print

Gold enthusiasts around the world are trying to figure out what just happened in the gold market. The price action has been dramatic, and I think I can shed some fairly bright light on the situation. The general consensus is that the price of gold fell on Friday, due to anticipation of a Swiss citizen rejection of the “Save Our Gold” campaign. The Swiss vote went as anticipated, but by Monday morning, gold had soared $80, and Silver surged $2.
How can this bizarre price action by explained by the events in Switzerland? The likely answer is: It can’t. In the big picture, events in India have always been a key driver of gold prices. It appears that India is also now becoming the main short term driver of the price, and rightly so, in my professional opinion………………………………………..Full Article: Source

Good old-fashioned gold: how consumers and banks still rely on it

Posted on 03 December 2014 by VRS  |  Email |Print

London property and gold — the two safest places to put your money, or so the saying goes in recent years. For the past several years, owners of London property have watched with delight as the values of their homes have spiked annually well into double digits.
With gold, as has been the case for thousands of years, it has provided a tradable commodity which investors have turned to in uncertain times. It’s a safe haven, the asset of last resort. But with quality gold ore becoming increasingly hard to find, a Canadian company has ventured 125 kilometers (78 miles) into the Arctic circle to build Europe’s largest gold mine………………………………………..Full Article: Source

Oil plunges as Opec tests the mettle of US shale industry

Posted on 28 November 2014 by VRS  |  Email |Print

Opec threw down the gauntlet to US shale oil producers by deciding not to cut its production, in a move that sent the oil price tumbling by more than 8 per cent to a four-year low. The cartel said it was leaving its output ceiling of 30m barrels a day unchanged, in a significant departure from its traditional policy of cutting production to prop up falling oil prices.
Any further fall in the price of crude, which has dropped by nearly 40 per cent since mid-June, will mean more pain for oil exporting countries and global energy companies, and could endanger billions of dollars of investment in new oil projects……………………………………Full Article: Source

Saudis to push OPEC to cut output: CNBC survey

Posted on 27 November 2014 by VRS  |  Email |Print

Saudi Arabia will this week push the Organization of Petroleum Exporting Countries (OPEC) to cut production by up to 1.5 million barrels a day to help re-balance the market and lift oil prices from their four-year lows, analysts and strategists told CNBC.
Nineteen out of 30 market professionals contacted by CNBC say OPEC’s leading member Saudi Arabia will spearhead an agreement to cut supply at its November 27 meeting. “Only a 1.5 million barrel-a-day reduction would help stabilize the price at this stage,” Ole Sloth Hansen, head of commodity strategy at Saxo Bank, told CNBC…………………………………..Full Article: Source

OPEC’s Easy Days Setting Oil Production Are Over, Veteran Says; You Need Russia, Norway, Mexico

Posted on 24 November 2014 by VRS  |  Email |Print

The days when OPEC members could almost guarantee consensus when deciding production levels for oil are long gone, according to a veteran of almost two decades of the group’s meetings.
The global glut of crude, which has contributed to a 30 percent decline in prices since June 19, has left the organization dependent on non-members to shore up the market, said former Qatari Oil Minister Abdullah Bin Hamad Al Attiyah. The 12-member Organization of Petroleum Exporting Countries is scheduled to meet in Vienna on Nov. 27…………………………………Full Article: Source

Iran, Venezuela urge oil price support ahead of OPEC meeting

Posted on 17 November 2014 by VRS  |  Email |Print

OPEC hawks Iran and Venezuela on Saturday called on fellow crude producers to shore up prices that have plunged more than 30 percent to four-years low ahead of an OPEC meeting later this month. Oil prices have fallen to below 79 US dollars on abundant and weak demand from 115 dollars a barrel in June. Skepticism that OPEC will cut supply when it meets on November 27 have also weighed on the prices.
So far, only Kuwait and Iran have said a reduction is unlikely, while a Libyan OPEC official, Venezuela and Ecuador have all called for OPEC to cut output. Privately, some delegates are talking of the need for some action, although they warn an agreement will not be easy to reach……………………………………Full Article: Source

Giving in? OPEC finally admits reduced oil demand in 2015

Posted on 14 November 2014 by VRS  |  Email |Print

Global demand for oil from Opec next year will be far below its current output level because of the US shale boom, the group said on Wednesday, as its top producer, Saudi Arabia, kept silent on whether it will cut output to remove surplus oil from the market.
Saudi Arabia, unusually, has not commented publicly on the fall in oil prices to their lowest since 2010, which has prompted industry watchers to wonder whether the kingdom may be moving away from a policy of managing the market and instead pursuing geopolitical goals…………………………………Full Article: Source

UAE Oil Minister Says OPEC Has Not Contributed To Oversupply

Posted on 12 November 2014 by VRS  |  Email |Print

United Arab Emirates energy minister Suhail bin Mohammed al-Mazrou said on Tuesday that oil market fundamentals had not changed, and the Organisation of the Petroleum Exporting Countries (OPEC) had not contributed to oversupply.
Speaking at an energy conference in Abu Dhabi, he said: “Fundamentals in the market didn’t change, OPEC didn’t contribute to an oversupply … We shouldn’t panic.” Asked who was oversupplying the market, the United States or Russia, he replied: “We all know that this supply in the past years came from the revolution in shale oil and (if) you look at numbers you will find this.”……………………………………….Full Article: Source

Precious Metals demand is shifting to emerging markets, led by China and India

Posted on 11 November 2014 by VRS  |  Email |Print

Since 2006, when India and China absorbed about a third of total gold global mining supplies, the average of India and China per capita GDP has approximately tripled to $4,100 (in 2013) with a total population of 2.7 billion. This rapid per capita GDP growth trend is likely to continue and has the potential to accelerate. China surpassed India in 2013 as the world’s largest consumer of gold.
Together, China and India consumed about 70% of global gold production in 2013, up from about 32% in 2006. In many emerging markets, cultural - and in some cases - religious affinities for the precious metals , notably gold are boosting demand………………………………………..Full Article: Source

Gold Bulls Accelerate Retreat to This Year’s Fastest Pace

Posted on 10 November 2014 by VRS  |  Email |Print

Hedge funds made their biggest cut of the year in bullish gold wagers as prices tumbled to the lowest since 2010. The net-long position in New York futures and options contracted 36 percent as long holdings fell the most in almost two years, U.S. government data show. Investors sold 14.4 metric tons of bullion held through exchange-traded products last week, trimming assets to the least since August 2009.
Gold dropped 15 percent from this year’s high in March as signs of a stronger U.S. economy drove the dollar to a five-year high and fueled speculation that the Federal Reserve is moving closer to raising interest rates. Lower oil costs are helping to keep inflation in check and U.S. equities touched records………………………………………..Full Article: Source

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Banks brace for Senate’s commodities hearing

Posted on 07 November 2014 by VRS  |  Email |Print

Sen. Carl Levin of Michigan is preparing to take one last swing at Wall Street before leaving Congress. The Senate Permanent Subcommittee on Investigations, chaired by Mr. Levin (D., Mich), announced Thursday a two-day hearing into banks’ involvement in the ownership and trading of physical commodities in late November.
The hearing, which follows a two-year investigation by the subcommittee, is likely to delve into whether banks’ participation in the market for physical commodities influenced prices and harmed consumers. The subcommittee has held discussions with officials from J.P. Morgan Chase & Co., Goldman Sachs Group Inc. and Morgan Stanley , among others. It wasn’t immediately clear who will appear before the subcommittee, but regulators and companies are expected to appear………………………………………..Full Article: Source

Will the Swiss Referendum Turn Around Gold?

Posted on 07 November 2014 by VRS  |  Email |Print

Gold is in free fall. But a Swiss vote later this month might help stoke a rebound in the yellow metal and alter the contours of the gold market for years to come. Though it sounds farfetched, a referendum in Switzerland on Nov. 30 could force the hand of the Swiss National Bank to buy billions of dollars in gold and never sell.
So far, gold prices have paid little mind to the vote, slumping nearly 13% over the past three months as a rising dollar and diminishing inflation expectations have eroded gold’s appeal………………………………………..Full Article: Source

The Current State of the Global Investment Climate

Posted on 04 November 2014 by VRS  |  Email |Print

There are three elements to the investment climate: The divergence between the US on one hand and Europe and Japan on the other, the drop in many commodity prices, including oil, and the slowing of the Chinese economy.
Last week, the divergence was driven home by policy makers. The contrast could not be starker. The FOMC ended QE, and seemingly began prepare investors for a rate hike next year, and the Bank of Japan, surprise of extending its asset purchases from JPY60-70 trillion a year to JPY80 trillion………………………………………..Full Article: Source

Switzerland’s Gold Bug Moment

Posted on 04 November 2014 by VRS  |  Email |Print

Switzerland will hold a referendum at the end of the month on whether the nation’s central bank should be obliged to hold at least 20 percent of its reserves in gold bullion. While there’s something inherently attractive about a population having its say in how its assets are husbanded, the Swiss need to be mindful of the likely consequences of locking a fifth of their wealth away in a bullion vault.
Switzerland has about 522 billion francs of reserves. Less than 40 billion francs of that is in gold, with 462 billion francs in foreign currency. Measured in the Swiss currency, gold currently costs about 1,130 francs ($1171) per ounce………………………………………..Full Article: Source

FS Investment Committee: Which way for commodities?

Posted on 03 November 2014 by VRS  |  Email |Print

It has been difficult to call the direction of commodities over the past two years but is now the time to buy in? For this month’s investment committee we revisit an asset class we last discussed about 19 months ago – commodities. In March 2013 the subject of the debate was whether, after a decade of rising prices, the “supercycle” enjoyed by commodities was finally at an end.
The general view taken by the committee at the time was that the cycle might not be over on a long-term basis but short-term prices were in for a period of volatility and maybe there was a need to press the pause button on the party………………………………………..Full Article: Source

Kiosk carnage becomes indicator of gold’s top

Posted on 03 November 2014 by VRS  |  Email |Print

Wall Street didn’t call the top in gold—the neighborhood mall did, Buyers may want to be cognizant of that before the next craze takes hold. It used to be that kiosks had cornered the market on retail bullion. All you had to do is follow the growing number of gold kiosks offering to buy used jewelry and coins in 2011. That’s the year when gold prices were on a tear and hit fresh highs in the $1,900 range.
As big investment firms were hiking their forecasts to more than $2,000 an ounce, Main Street was trying to cash in by convincing people they could be missing the opportunity of a lifetime………………………………………..Full Article: Source

OPEC Oil Output Rises in October as Prices Tumble: Survey

Posted on 31 October 2014 by VRS  |  Email |Print

OPEC crude production rose to a 14-month high in October as oil futures sank into a bear market, a Bloomberg survey showed. Production by the 12-member Organization of Petroleum Exporting Countries climbed by 53,000 barrels a day to 30.974 million, led by gains in Iraq, Saudi Arabia and Libya, according to the survey of oil companies, producers and analysts.
Last month’s total was revised 14,000 barrels a day lower to 30.921 million because of changes to the Iraqi, Kuwaiti, Nigerian and Qatari estimates………………………………………..Full Article: Source

The next big market shock can come from ‘Save Swiss gold’ movement

Posted on 29 October 2014 by VRS  |  Email |Print

Love for gold was supposed to be an Indian affair but that was before the Chinese came in and overtook Indian annual purchases. Even this will now change from November 30, 2014 if the Swiss have their way. November 30, 2014 can be a game changing one for the gold market globally. The Alpine country will vote on that day on the so-called “Save our Swiss Gold” initiative.
The motion calls for the central bank to hold at least 20 per cent of its assets in gold, prohibit selling any gold in future and bring back all its reserve of gold back in the country………………………………………..Full Article: Source

Why it’s time to stop fearing OPEC

Posted on 27 October 2014 by VRS  |  Email |Print

The global energy market can be a scary place for America. For decades, one of the biggest reasons has been the cartel known as OPEC. Saudi Arabia and the 11 other nations that make up the Organization of Petroleum Exporting Countries collude openly, setting production limits and shaping the world oil market in their interests.
Concerns about OPEC have driven American energy policy ever since a devastating six-month embargo by Arab oil producers in 1973 plunged the nation into recession and seared the four-letter acronym into the national consciousness………………………………………..Full Article: Source

Switzerland Set To Greedily Grab Gold

Posted on 27 October 2014 by VRS  |  Email |Print

The Swiss National Bank (SNB) could soon be obliged to begin acquiring gold because of a very specific question posed by a referendum. On Sunday, November 30th, 2014, the Swiss will go to the polls to vote their response to a question titled “Save Our Swiss Gold”. If this were approved it would require the SNB to:
Hold 20% of its reserves in gold. Repatriate any gold it holds outside its borders.Cease selling any gold………………………………………..Full Article: Source

Gold Demand in India, China on the Rise

Posted on 27 October 2014 by VRS  |  Email |Print

Appetite for physical gold in India and China has rebounded in recent days, with low prices boosting demand during India’s Diwali festival, the country’s biggest gold-buying occasion of the year.
Demand surrounding this year’s Diwali festival, which was celebrated Thursday, rose by around a third from last year, said Rahul Gupta, managing director of New Delhi-based P.P. Jewelers, a jewelry retail chain. “The gates seem to have come off for festival buyers in the last couple of days,” he said………………………………………..Full Article: Source

The Top Technical Indicators For Commodities Investing

Posted on 24 October 2014 by VRS  |  Email |Print

The primary motive for any trader, investor or speculator is to make trading as profitable as possible. Primarily two techniques, fundamental analysis and technical analysis, are employed for making buy, sell or hold decisions. The technique of fundamental analysis is believed to be ideal for investments involving a longer time period.
It is more research based; it studies demand-supply situations, economic policies, and financials as decision-making criteria. Technical analysis is commonly used by traders, as it is appropriate for short term judgment in the markets–namely, deciding a quick buy and sell, entry and exit points, etc. It is pictorial; it analyzes the past price patterns, trends and volume to construct charts in order to determine future movement………………………………………..Full Article: Source

Libya OPEC Governor Says Group Must Cut Daily Oil Output

Posted on 23 October 2014 by VRS  |  Email |Print

OPEC needs to reduce crude output by at least 500,000 barrels a day, Libya’s governor to the group said, the first time since prices plunged into a bear market that a representative from a member nation has suggested how much production should be cut.
Oil markets are oversupplied by about 1 million barrels a day, Samir Kamal, Libya’s OPEC governor, said by e-mail today. His comments reflected personal views, not the official Libyan position, he said. Libya shouldn’t be expected to reduce its own oil output because the country is still struggling to restore production that has been disrupted for more than a year by political conflict, he said………………………………………..Full Article: Source

A World Without OPEC?

Posted on 23 October 2014 by VRS  |  Email |Print

Forty-one years ago this month, the Arab oil embargo began. The countries that were part of it belonged, of course, to the Organization of Petroleum Exporting Countries — OPEC — which had banded together 13 years earlier to strengthen their ability to negotiate with international oil companies.
The embargo led to widespread shortages in the United States, higher prices at the gas pump and long lines at gas stations. By the time it ended, the price of oil had risen to $12 a barrel from $3. Perhaps more important than the price increases themselves was the new world order the embargo signaled. The embargo “set in motion geopolitical circumstances that eventually allowed (OPEC) to wrest control over global oil production and pricing from the giant international oil companies — ushering in an era of significantly higher oil prices,”……………………………………….Full Article: Source

Will Gold Outshine Platinum? — Overheard

Posted on 23 October 2014 by VRS  |  Email |Print

Gold and platinum are prized for their rarity. What is happening with their prices right now is also pretty unusual. At about $1,245 an ounce, gold isn’t far off parity with platinum at about $1,270. This doesn’t happen often. In the past 20 years, gold has matched or exceeded the platinum price only about 7% of the time. And much of that occurred between the summer of 2011 and early 2013, when quantitative easing was in full swing and hyperbole about the dollar’s demise was at its height.
Similarly, the current price action reflects an anxious world. Gold hasn’t really gained much this year; rather, platinum has collapsed since July. This makes sense. as more than half of platinum demand relates to industrial, primarily, automotive uses. Deflation fears have whacked industrial commodities………………………………………..Full Article: Source

Oil at $80 a Barrel Muffles Forecasts for U.S. Shale Boom

Posted on 22 October 2014 by VRS  |  Email |Print

The bear market in oil has analysts reassessing the U.S. shale boom after five years of historic growth. The U.S. benchmark price dropped to $79.78 a barrel on Oct. 16, the lowest since June 2012. At that level, one-third of U.S. shale oil production would be uneconomic, analysts for New York-based Sanford C. Bernstein & Co. led by Bob Brackett said.
Drillers would add fewer barrels to domestic output than the previous year for the first time since 2010, according to Macquarie Group Ltd., ITG Investment Research and PKVerleger LLC………………………………………..Full Article: Source

More clarity needed in the most volatile commodity oil

Posted on 20 October 2014 by VRS  |  Email |Print

Companies need to know what returns they will get after investing risk capital. When the previous government wanted to double natural gas prices, the oil industry said the new price was, at best, a good interim step towards total market freedom. The government needs to keep in mind two things: one, India needs new discoveries; two, state-run firms have failed to make significant discoveries for a long time.
In framing policies, the government cannot take comfort from the fact that global crude oil prices are in a bear market, having fallen 25% since the June peak of $115. India should be prepared for sudden jumps in prices even as the short-term outlook is rosy for consumers. The International Monetary Fund has downgraded its forecast for global economic growth, while the International Energy Agency has scaled down its forecast for oil demand for the fourth consecutive month………………………………………..Full Article: Source

Gold Bulls Lured Back for First Time in Two Months: Commodities

Posted on 20 October 2014 by VRS  |  Email |Print

Speculators added bullish gold bets for the first time in nine weeks as concern that global economic growth is slowing whipsawed equity markets. The gain in the net-long position in New York gold futures and options snapped the longest run of reductions since 2010. Prices rose for a second week as global equities retreated to an eight-month low.
More than $3.2 trillion was wiped from the value of world shares this month as the International Monetary Fund cut its outlook for global growth in 2015. Federal Reserve policy makers identified slowing foreign economies as a risk to the U.S., spurring the fastest purchases of gold held through exchange-traded products since July………………………………………..Full Article: Source

Saudi supply games expose OPEC impotence

Posted on 16 October 2014 by VRS  |  Email |Print

The oil price is in free fall, down 27 per cent since June and 13 per cent so far in October. Saudi Arabia, the world’s traditional swing producer, has done nothing to defend the $100 (U.S.) a barrel floor price for Brent crude, which had not been breached since July, 2012. Why?
The indifference seems to be intentional. The kingdom increased production last month despite concerns that rapid growth in U.S. shale oil production, recovering output in Libya and Iraq and a slowing pace of demand growth may tip the market into surplus. Reuters reported on Monday that Saudi sources were comfortable with the price trends – although Prince Alwaleed bin Talal, the billionaire Saudi businessman, has expressed reservations on Twitter………………………………………..Full Article: Source

In shift, OPEC price hawk Iran says can live with lower oil

Posted on 15 October 2014 by VRS  |  Email |Print

Iran, in a change of tack, is saying it can live with lower oil prices, moving closer to the views of Saudi Arabia and other Gulf OPEC members and reducing the likelihood of any collective cut in OPEC output to support prices.
OPEC’s traditionally second-largest producer is normally among the first members of the Organization of the Petroleum Exporting Countries to call for supply cuts to support prices. Iran needs relatively high oil prices to balance its budget, analysts say………………………………………..Full Article: Source

World LPG prices plummet on financial market weakness

Posted on 15 October 2014 by VRS  |  Email |Print

NYC-based PIRA Energy Group reports that PIRA’s restructured U.S. gasoline balances provide greater clarity and insight. In the U.S., large crude stock build, small product stock draw, and widening commercial stock excess. In Japan, crude stocks build despite higher runs. Specifically, PIRA’s analysis of the oil market fundamentals has revealed the following:
PIRA’s restructured US Gasoline balances provide greater clarity and insight: PIRA’s restructured gasoline balances are in response to the steep decline in volume and the relevance of finished gasoline stocks and imports. The changes to the EIA’s finished balance came about as a result of the decline in MTBE and the rise in ethanol, as the oxygenate of choice………………………………………..Full Article: Source

What OPEC Is Really Telling The IMF

Posted on 10 October 2014 by VRS  |  Email |Print

The Secretary General for the Organization of the Petroleum Exporting Countries (OPEC), H.E. Abdalla Salem El-Badri, issued a statement to the International Monetary Fund (IMF) on Thursday. He touched on a few key points of crude oil prices, the global economic forecast, and emerging markets, to name a few.
What we would stress to our readers is what OPEC sees for global demand and output — that thing called the US Energy Boom hangs in the balance. The underlying message from this statement is that as production in North America continues to grow it will outpace production in the rest of world, driving the demand of oil down over time. Crude oil prices in September fell to their lowest level this year………………………………………..Full Article: Source

Why A Gold Standard Does Not Imply Price Stability

Posted on 10 October 2014 by VRS  |  Email |Print

Last week, Alan Greenspan penned an interesting article in Foreign Affairs that praised China’s recent conversion of some of its $4 trillion foreign exchange reserves into gold bullion and gave the gold standard some further adulation in a world where there is relatively little today from mainstream economists.
This marks the first time the gold standard has been seriously discussed by a senior U.S. policymaker (former or present) since 2012, when two GOP presidential candidates, Newt Gingrich and Ron Paul, along with former Congressman Lewis Lehrman and Grant’s Interest Rate Observer founder James Grant, called for a commission to consider readopting the gold standard………………………………………..Full Article: Source

Is there a reason to fear downturn in commodity prices?

Posted on 08 October 2014 by VRS  |  Email |Print

With few exceptions, commodity prices have fallen sharply in recent months, to their lowest levels in over a year. Relative to stock market indices, broad commodity indices are now at their lowest levels since the late-1990s dot com boom.
But key commodity price ratios, such as those between precious and industrial metals, are already at levels associated with financial crises such as that of 2008. In other words, there is already ‘blood on the commodity streets’, presenting investors and commodity traders with potentially attractive opportunities………………………………………..Full Article: Source

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