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Fed to blame for commodities rout, not China

Posted on 26 November 2015 by VRS  |  Email |Print

Blame China. A global glut of commodities has emerged because China suddenly decided it no longer wants mineral ores. Prices are now collapsing, which threatens the worldwide supply chain. It’s all China’s fault. I have one problem with this story. Look at the first chart on the quantity of China’s iron ore imports and you see scant sign that iron ore is no longer in demand. That demand curve has flattened out but this is after a 16-fold growth over the past 15 years. A breather was due at some point.
And what you see in iron ore you can also see in other major minerals and in petroleum. In some cases there has been no slowdown at all. Imports of copper ore and concentrates, for instance, are still growing at double digit rates………………………………………..Full Article: Source

Commodity prices struggle on

Posted on 23 November 2015 by VRS  |  Email |Print

Goldman Sachs claims that the low prices of natural resource commodities are set to continue. Natural resource commodities have had a tough year. From oil to metals, prices have been persistently low. According to Goldman Sachs, however, this trend is not going to shift anytime soon – and prices could fall even further.
The banking giant has said that the bearish nature of commodity markets is set to continue, with prices not yet bottoming out, unless supply is restricted or demand picks up again………………………………………..Full Article: Source

OPEC to Discuss Iran’s Return to Global Oil Market at December Meeting

Posted on 23 November 2015 by VRS  |  Email |Print

OPEC, the 12-nation cartel of oil producers, will discuss Iran’s upcoming return to the global oil market in 2016, after financial and energy sanctions against it are scrapped, Iraqi Oil Minister Adel Abdel Mahdi said Sunday.
Earlier on Sunday, Mahdi met with his Iranian counterpart Bijan Zanganeh to discuss Iran’s oil production and other oil-related issues in the wake of Tehran’s anticipated comeback next year. “We discussed everything, including the OPEC,” Mahdi told reporters. “There is still no decision on the next meeting [of OPEC member states on December 4]. We will meet at the OPEC and thrash it all out.”……………………………………….Full Article: Source

5 World Currencies That Are Closely Tied to Commodities

Posted on 23 November 2015 by VRS  |  Email |Print

For more than a year now, commodity prices have been under pressure from the strong U.S. dollar and slowing global demand. This has made a huge dent in the balance sheet of many net exporters of resources, in turn weakening their currencies.
This should come as a shock to no one, but what most people don’t realize is just how closely some currencies track certain commodities. When I presented at the International Mining and Resources Conference in Melbourne, Australia, earlier this month, I shared several charts that show this correlation. Many attendees were astounded—and we’re talking professional economists, money managers and CEOs here………………………………………..Full Article: Source

Saudi facing ‘a crisis in the next 3-5 years’ if oil price remains low

Posted on 19 November 2015 by VRS  |  Email |Print

Saudi Arabia faces a crisis in the next three to five years if oil prices remain low and the country still has big budget deficits and a rigid, pegged currency, participants in the Reuters Global Investment Outlook Summit said on Tuesday. During a panel discussion about emerging markets and China, investors also predicted a broadly stronger dollar in 2016, but they also doubted a systemic corporate debt crisis would develop in the developing world next year.
That was especially the case with China, where three of the four participants saw annual growth averaging 6.5 percent, with the authorities fully capable of dealing with market wobbles and capital flight by “zombifying” - effectively freezing - the financial system………………………………………Full Article: Source

Iran says won’t negotiate with OPEC over output hike

Posted on 18 November 2015 by VRS  |  Email |Print

OPEC member Iran will not negotiate with the cartel over a planned half million barrels per day oil production hike once sanctions are lifted, the country’s oil minister said Tuesday. Despite a supply glut keeping crude prices low, Iran has consistently said it plans to up its output when nuclear-related sanctions are lifted under a deal agreed in July with world powers.
Oil Minister Bijan Zanganeh reiterated the stance at a press conference in Tehran, where he said OPEC would be informed of the production jump but no more. “We will not negotiate with OPEC to increase our production. We will only notify them when we adapt,” he told reporters………………………………………..Full Article: Source

Why oil could rally big in 2016

Posted on 17 November 2015 by VRS  |  Email |Print

Despite the astounding surge in the oil supply over the last year, the Bank of England reported that 60 percent of the recent decline in oil prices was due to demand factors. Cumulative percentage change in the Brent oil price since June 19, 2014, based on 200 commodity price co-Movements. Source: Bank of England November 2015 Inflation Report.
The BOE bases this analysis on the co-movement of oil prices with those of other commodities. If oil prices drop simultaneously with other commodity prices, then presumably some common cause is the source. The supply of a range of commodities is unlikely to balloon all at the same time. Therefore, if supply is not the cause, then weak demand is likely to blame………………………………………..Full Article: Source

OPEC confidential report sees market share squeeze to 2019

Posted on 05 November 2015 by VRS  |  Email |Print

Global demand for OPEC’s crude oil will remain under pressure in the next few years, the producer group said in an internal report, potentially fuelling a debate on its strategy of defending market share rather than prices. The draft report of OPEC’s long-term strategy, seen by Reuters, forecasts crude supply from OPEC - which has an output target of 30 million barrels per day (bpd) - falling slightly from 2015’s level until 2019, unless output slows faster than expected in rival producers.
OPEC governors, official representatives of the 12 members of the Organization of the Petroleum Exporting Countries, met at the group’s Vienna headquarters on Wednesday to approve the final draft of the report………………………………………..Full Article: Source

India to launch Gold Related Schemes Today

Posted on 05 November 2015 by VRS  |  Email |Print

First ever National Gold Coin minted in India with National Emblem of Ashok Chakra engraved to be released among others on the occasion. The Prime Minister Shri Narendra Modi will launch the three Gold related Schemes i.e. Gold Monetisation Scheme (GMS), Gold Sovereign Bond Scheme and the Gold Coin and Bullion Scheme on Thursday, 5th November, 2015 in the national capital.
The salient features of each of the aforesaid scheme are as follows: Gold Monetisation Scheme (GMS), 2015. The GMS will replace the existing Gold Deposit Scheme, 1999. However, the deposits outstanding under the Gold Deposit Scheme will be allowed to run till maturity unless the depositors prematurely withdraw them………………………………………..Full Article: Source

Fed mulling higher capital cushion for banks handling commodities

Posted on 04 November 2015 by VRS  |  Email |Print

The U.S. Federal Reserve is considering requiring banks that handle physical commodities to increase their capital buffers as a hedge against accidents, such as tanker spills or gas pipeline explosions, the Financial Times reported on Tuesday.
The paper, citing people briefed on the matter, said the U.S. central bank wants to use the new capital requirements to discourage banks from risky activities that could threaten their survival in the event of a catastrophe. The report suggests the Fed may be closer to finalizing new rules as part of a years-long review of its oversight of banks’ physical commodities operations………………………………………..Full Article: Source

Gold still shines in longer term, says bullion dealer

Posted on 04 November 2015 by VRS  |  Email |Print

The boss of one of the world’s largest bullion dealers - which opened its first Asian office in Singapore last week - believes gold has rosy prospects over the longer term although prices are depressed now.
Wolfgang Wrzesniok- Rossbach, chief executive of German firm Degussa Goldhandel, told The Straits Times in an interview last week that he remains bullish on gold and expects prices to rebound to about US$1,500 an ounce next year. Gold prices have been trending downwards in recent years amid a dimming global economic outlook. Prices for spot gold stood at around US$1,149 an ounce last Friday, about 39 per cent lower than its most recent peak of US$1,882.96 in September 2011………………………………………..Full Article: Source

OPEC’s big favor to the world of oil

Posted on 03 November 2015 by VRS  |  Email |Print

OPEC’s spare production capacity is estimated by the US Energy Information Administration at 1.54 million b/d, a mere 180,000 b/d above the level reached in 2008 when oil prices hit their record high. But don’t panic! Oil inventories are at very high levels. The International Energy Agency puts global oil stocks at 147 million barrels, which it notes could notionally deliver 1.6 million b/d for just over 90 days in the event of a major supply disruption.
Meanwhile, the North Dakota Department of Mineral Resources reports that the number of drilled but uncompleted wells in the state hit 993 in August. According to Platts unit Bentek Energy, these wells if brought on-stream would add 591,000 b/d to Bakken crude production (again, notionally)………………………………………..Full Article: Source

Saudi role as ‘central banker’ for oil is eroded

Posted on 02 November 2015 by VRS  |  Email |Print

For close to a year, Saudi Arabia and its Opec peers have maintained a stance of deploying spare oil production capacity to hobble outside rivals. Rather than pursue short-term revenues through maintaining the price of crude, the cartel embarked upon a strategy of protecting long-term market share last November.
Since then, the Kingdom has raised production to as high as 10.6m barrels a day, compared with an average of 9.7m b/d in 2014, while its Gulf allies are also running at full pelt. Iraq is pumping at a record and Libya is back above the 500,000 b/d mark. Additional Iranian barrels loom on the horizon………………………………………..Full Article: Source

Pouring oil on troubled waters: ‘Surplus until 2017′

Posted on 29 October 2015 by VRS  |  Email |Print

As the price of oil continues its decline, economists have warned on a lack of upward price pressures for the commodity for at least another two years. Thomas Pugh economist at Capital Economics predicts oil could hit $55 per barrel for Brent crude at the end of 2015, with oil to remain in surplus for another couple of years.
“The market is still going to be in surplus by this time next year, so by the time you actually have supply and demand starting to equate, it will be well into 2017,” he told CNBC via telephone. The oil industry is full of booms and busts. The norm for oil for the last decade has been $90 - $100 per barrel, but Brent is currently trading closer to $45 a barrel………………………………………..Full Article: Source

Gold ready to take its position when QE undoubtedly fails

Posted on 29 October 2015 by VRS  |  Email |Print

Even though the price of gold failed to make a decisive break above the 200 day Moving average, the price looks set to continue its upward trajectory. However, one can expect some resistance close to the 200 day MA at around the $1185 an ounce level.
After briefly breaching $1190 an ounce level, gold prices came under some renewed selling pressure as the U.S dollar gained against it major peers especially the euro. The rally in the greenback was sparked when European Central Bank (ECB) president Mario Draghi announced that the central bank would not cut rates, but at the same time, he strongly hinted that they would act later this year………………………………………..Full Article: Source

How Will Chinese Easing Impact Gold?

Posted on 28 October 2015 by VRS  |  Email |Print

China has been spooking the financial markets, first with its currency devaluation and now with easing the interest rates. Such unexpected moves may have a substantial impact on the prices of commodities and precious metals. As China has cut its interest rates by 25 basis point, money may flow out of the country and likely find its place in the United States.
Such flow into the United States will provide strength to the dollar, pushing the dollar-denominated gold and other precious metals lower. Lower commodity prices could discourage some investors from investing in precious metals. China’s purchasing power in commodities is a major determinant of its prices. Lower demand may further dim gold’s outlook………………………………………..Full Article: Source

Oil’s Summer Holiday Is Over

Posted on 22 October 2015 by VRS  |  Email |Print

The oil price war has reached the gates — specifically, the refinery gates. Expect casualties. Wednesday’s release of U.S. oil inventory and demand numbers was noted chiefly for the jump of eight million barrels in crude stocks last week, more than double the Bloomberg analyst consensus forecast. The more insidious threat, though, was in the demand data.
Gasoline makes up about half of U.S. oil consumption. Luckily for an otherwise suffering industry, it tends to respond well to low prices. This summer, gasoline consumption hit its highest level since those far-off, pre-crisis days of 2007, based on the four-week moving average………………………………………..Full Article: Source

Future of London gold market up for grabs

Posted on 22 October 2015 by VRS  |  Email |Print

The annual meeting of the London Bullion Market Association usually involves a light-hearted debate on the outlook for precious metals prices. But this year delegates had weightier matters on their minds — a battle for the future of London’s gold market.
Whether it was on the sidelines of the Vienna Hilton conference hall or at the Liechtenstein Garden Palace — venue for this year’s gala dinner — the stand-off between some of the world’s biggest banks was a subject of debate for the 600 brokers and analysts in attendance………………………………………..Full Article: Source

Gloomy on Gold at LBMA 2015

Posted on 21 October 2015 by VRS  |  Email |Print

We don’t yet know the average guess of the 690 attendees from 290 different companies across the precious metals world, meeting here at the London Bullion Market Association’s annual bash. The conference’s aggregate gold price forecast won’t be revealed until Tuesday’s closing session.
But the tone from the first of LBMA 2015’s forty-nine expert speakers is, so far, bearish. Wearily so. Fatigue is really hurting, especially straight after the gloom of London’s LME Week for base metals. That might prove bullish for precious metals of course – because all markets, not just gold, silver and the platinum -group metals, only turn when the fewest people expect it, something the chit-chat at Sunday night’s conference reception drinks kept coming back to………………………………………..Full Article: Source

How China Hurt The Commodity Industry - Will It Do So Again?

Posted on 13 October 2015 by VRS  |  Email |Print

One of the complex issues surrounding China’s economic growth over the last couple of decades has been the combination of legitimate and illegitimate growth projects. What that did was create a mixed market built upon both real demand and contrived demand, which in one case had sustainable growth prospects and in the other did not.
That led to the demand for increased production, which also led to the inevitable collapse of the price of commodities — because those projects that weren’t built because of demand, once completed, brought demand for commodities to a screeching halt. This is where we stand today, with many producers caught up with excessive supply and nowhere to sell it………………………………………..Full Article: Source

Smaller Factors Could Have Big Impact On Gold Next Week - Analysts

Posted on 13 October 2015 by VRS  |  Email |Print

The timing of the Federal Reserve’s first interest rate hike in more than nine years and a weaker U.S. dollar will be major drivers for the gold market next week, but analyst also note a variety of smaller factors that could impact prices in the near-term.
Comex December gold futures saw strong gains in the week, settling Friday’s session at 1,155.90 an ounce, up almost 2% from Monday. However, it was silver that stole the show this week as prices once for the second consecutive day its 200-day moving average and briefly rallied above $16 an ounce. December silver futures settled Friday’s session at $15.818 an ounce………………………………………..Full Article: Source

OPEC chief says global oil market more balanced in 2016

Posted on 12 October 2015 by VRS  |  Email |Print

Secretary general of the Organization of the Petroleum Exporting Countries (OPEC) says the global oil market will be “more balanced” next year as non-OPEC oil output has started to contract and global demand is increasing. Addressing an oil and gas conference in Kuwait City on Sunday, Abdullah el-Badri said, “OPEC is confident that it will see a more balanced market in 2016.”
“In recent months, there has been a contraction in production from non-OPEC producers and an increase in global demand,” he added. Badri, however, admitted that the “market remains oversupplied,” and insisted that stability is paramount to the crude market, which faces “extremely challenging times,” AFP reported………………………………………..Full Article: Source

Could Q4 bring a rally in gold?

Posted on 07 October 2015 by VRS  |  Email |Print

After escaping the summer doldrums, gold has been edging up in recent weeks, raising the possibility of a rally in the final quarter of 2015. However, some analysts are doubtful that the precious metal will push much higher.
Spot gold rallied 1 percent on Tuesday to $1,147.66 an ounce, but gold prices are still down nearly 3 percent year-to-date. In a note published on Tuesday, UBS points out that the precious metal remains reluctant to break higher despite easing expectations of a rate hike by the U.S. Federal Reserve this year………………………………………..Full Article: Source

Gold Holds Biggest Gain Since January on Rates; Palladium Surges

Posted on 05 October 2015 by VRS  |  Email |Print

Gold held the biggest advance in almost nine months after figures showed that U.S. payrolls rose less than expected and wages stagnated, reducing the possibility of an interest rate increase this year. Palladium climbed to a three-month high.
Bullion for immediate delivery was at $1,137.40 an ounce at 8:03 a.m. in Singapore from $1,138.60 on Friday, when prices surged 2.2 percent at the close, the most since Jan. 15, according to Bloomberg generic pricing. Palladium rose as much as 1.3 percent to $708.60 an ounce, the highest price since June 22………………………………………..Full Article: Source

Busted - how much further can commodities fall?

Posted on 02 October 2015 by VRS  |  Email |Print

Peak oil, peak commodities, the planet running out of food and natural resources… It was only a few years ago that scary scenarios evoking the post-apocalyptic movie “Mad Max” were taken quite seriously in financial markets.
Now the world is confronted by the opposite phenomenon — a commodities glut that is inflicting serious damage on commodity producing countries, such as Brazil and Indonesia, and commodity traders such as Glencore and Noble Group as well as mining companies large and small. Since peaking in 2008, the Thomson Reuters Core Commodity Index has fallen some 60%. When adjusted for inflation, the current level is close to a 20-year low………………………………………..Full Article: Source

Credit, Commodities and Currencies Weigh on Stock Markets

Posted on 01 October 2015 by VRS  |  Email |Print

Call it a triple-C market—that is, one dominated by credit, commodities and currencies. A triple-C rating describes a speculative credit well down on the quality scale. In recent days, the market increasingly is looking askance at borrowers of lesser quality, especially those related to commodities.
That reduced esteem for lower-quality credits is hitting the equity market for the simple reason is that stocks never have been so dependent on borrowed money. Nor, for that matter, have commodities. The producers of metals, energy and agricultural goods went heavily into hock to expand production. Cheap credit funded the expansion of supplies not only of energy products but also metals that boomed in the so-called commodity super cycle………………………………………..Full Article: Source

Oil prices: Has black gold lost its shine?

Posted on 30 September 2015 by VRS  |  Email |Print

Royal Dutch Shell has halted oil exploration in the Arctic, after a $7bn (£4.6bn) quest failed to yield enough crude to justify continued spending. The venture has been a “very costly error” and will damage the company both financially and reputationally, according to Deutsche Bank analyst Lucas Herrman.
Shell said it is likely to take a further $4.1bn hit as it withdraws from searching the area, which is in the Chukchi Sea off the coast of Alaska. Its ill-fated explorations in the Arctic region were also put on hold in 2012 when a drilling rig broke free………………………………………..Full Article: Source

Commodities Are Collapsing

Posted on 29 September 2015 by VRS  |  Email |Print

There are two commodity stories today worthy of an investor’s interest: the collapse of shares at Glencore and the abandonment of Arctic drilling by Shell. Both are interesting as they point to a continuing collapse in the commodity space, and an even more serious worry about what that collapse means for global economies going forward.
Shell has invested almost $7 billion to date to gain permission and develop the first leases for deepwater drilling in the Arctic. This story of Shell’s second big foray north (after its first ignominious defeat with the Kulluk in 2012) gained wide media attention last month as President Obama visited Alaska — making his case for a global initiative on climate change while approving Shell’s leases………………………………………..Full Article: Source

Commodity Traders Face Higher Costs Under New European Rules

Posted on 29 September 2015 by VRS  |  Email |Print

Commodity traders and consumers are set for higher costs as the industry will for the first time be subject to similar regulations as stock and bond markets under European Union proposals to prevent market abuse.
Companies where speculative activity makes up more than 10 percent of their total commodity derivatives trading will need to get a financial license, comply with new disclosure rules and set aside additional capital to back trades, the European Securities and Markets Authority proposed Monday. ESMA also relaxed some previously proposed limits on the total open positions a trading firm can hold in a market………………………………………..Full Article: Source

OPEC’s Family Feud

Posted on 25 September 2015 by VRS  |  Email |Print

When Venezuelan Oil Minister Juan Pablo Pérez Alfonso resigned in 1963, he blasted the Organization of Petroleum Exporting Countries, at the time torn by internal rivalries, for failing to produce any benefits for his country.
Half a century later, OPEC is still split and Venezuela is again unhappy, this time at the unwillingness of the organization’s top producer, Saudi Arabia, to rescue oil prices from a six-year low that’s dragging the battered Venezuelan economy into an even deeper crisis………………………………………..Full Article: Source

OPEC is winning battle to stimulate gasoline demand: Kemp

Posted on 25 September 2015 by VRS  |  Email |Print

OPEC’s bid to curb production of high-cost oil is taking time to produce results but the organisation is already making good progress on its other objective of stimulating fuel demand. In the first half of the year, gasoline deliveries into U.S. local markets jumped by 4.3 percent compared with the same period in 2014, according to the U.S. Energy Information Administration.
The United States is the world’s largest gasoline consumer and its gasoline demand accounts for 10 percent of all crude and condensates produced worldwide. In the first six months of 2015, U.S. gasoline consumption rose at the fastest rate since 1985 - another occasion on which the real price of oil halved over 12 months and stimulated demand……………………………………….Full Article: Source

OPEC focuses on rival mega projects, lives with shale swing output

Posted on 24 September 2015 by VRS  |  Email |Print

After almost a year of painfully low oil prices, OPEC members are beginning to believe they are winning against upstart U.S. shale producers in a short-term market share contest. Yet insiders and experts say OPEC is looking for a longer-lasting impact on other high-cost production oil field plans, many in deep oceans, with bigger time scales, even if that means a period of cheap oil prices lasting for years.
Privately, OPEC’s core Gulf members say they have resigned themselves to the idea that the U.S. shale industry’s high-tech flexibility means it will respond quickly when prices start rising again, making the United States the new swing producer in world oil, the role held for so long by Saudi Arabia………………………………………..Full Article: Source

How to sell a ‘commodity’ successfully

Posted on 22 September 2015 by VRS  |  Email |Print

Let’s face it, selling a commodity has its challenges. Your customers always want the lowest price, in which case it’s even more challenging to deliver the product with decent service while maintaining some type of decent margin. Everyone knows that discounting is manipulation and not sustainable in the long run.
What if your product didn’t need to be sold as a commodity, and that you could actually increase sales very quickly without the need to keep discounting. Here are a few things to keep in mind: 1) Don’t sell a “commodity”. “Commodities” are products that have absolutely no differentiation from one another. In this circumstance, customers are bound to focus on price, because there is no product that sets itself apart from the rest. The cheapest deal will win. You don’t want to compete there, so stop calling what you sell a “commodity”!……………………………………….Full Article: Source

Gold Declines as Comments From Fed Officials Fuel Rate Concerns

Posted on 22 September 2015 by VRS  |  Email |Print

Gold futures fell for the second time in three sessions as comments from some Federal Reserve officials fueled concern that the central bank may raise interest rates this year. Three policy makers argued for lifting the Fed’s key rate before year-end, days after a September increase was rejected amid financial-market volatility and concern about an economic slowdown in China.
Tighter monetary policy curbs demand for gold because it doesn’t pay interest, unlike competing assets. The comments counter bets by many traders that the Fed will wait until 2016. Interest-rate futures now give just a 20 percent chance of an increase at the Fed’s October meeting, and almost 49 percent probability of a move by December, according to data compiled by Bloomberg. On Friday, odds of a December move were less than 46 percent………………………………………..Full Article: Source

Fitch: China and Commodities Test Latin American Sovereigns

Posted on 21 September 2015 by VRS  |  Email |Print

Slower Chinese growth and weaker commodity prices will add to the challenges facing Latin America’s commodity exporters and test their external and fiscal buffers, Fitch Ratings says. Each sovereign’s credit impact will be a function of the size of these buffers and the effectiveness of authorities’ policy responses.
We forecast Chinese real GDP growth to slow to 6.8% this year from 7.4% last year. Chile (’A+’/Stable), Uruguay (’BBB-’/Stable), Peru (’BBB+’/Stable), Venezuela (’CCC’) and Brazil (’BBB’/Negative) have the largest direct export exposure to China, but export volumes in these countries have mostly been stable or only declined moderately. Slower Chinese growth is being felt mostly through its contribution to lower commodity prices and weaker confidence………………………………………..Full Article: Source

Saudi king, Venezuela president discuss oil price recovery, OPEC

Posted on 21 September 2015 by VRS  |  Email |Print

Venezuelan President Nicolas Maduro and Saudi King Salman have spoken on the phone and discussed OPEC, according to the South American country’s government, which is pushing for action to boost low oil prices that have battered its economy.
“Both heads of state agreed to deploy joint efforts to recover the stability of the oil market and strengthen OPEC,” Foreign Minister Delcy Rodriguez said on Twitter on Saturday evening. There were no immediate further details………………………………………..Full Article: Source

Gold finds new dynamic as Fed messes with 2000-year-old link

Posted on 18 September 2015 by VRS  |  Email |Print

Leave it to the Federal Reserve to help break a 2000-year-old dynamic in the gold market. When Fed policy makers left US interest rates unchanged near zero per cent on Thursday they cited stubbornly low inflation, and bullion rose to a two-week high. Lower consumer prices have historically been a thorn for gold, which attracts buyers as a store of value.
But since the lack of inflation is allowing the central bank to wait longer before tightening monetary policy, that relationship is getting flipped. The evidence can be seen in the link between bullion and inflation expectations, measured by the 10-year Treasury break- even rate. The 120-day correlation has turned negative, signalling the assets are starting to move in opposite directions…………………………………Full Article: Source

OPEC’s new medium-term forecasts show higher demand for its oil: Delegates

Posted on 17 September 2015 by VRS  |  Email |Print

OPEC’s new medium-term forecasts point to higher demand for the group’s oil, OPEC delegates said, a sign that its strategy of letting prices fall is discouraging supplies from competing producers. The forecasts, to be published in OPEC’s World Oil Outlook later this year, are expected to be discussed on Thursday during the second day of a meeting of OPEC’s national representatives taking place at its Vienna headquarters.
“The new medium-term numbers show a higher demand for OPEC crude,” said one OPEC delegate, who added that oil prices are assumed to be lower than previously. “There is an impact on higher-cost producers.” ……………………………………….Full Article: Source

Gold price: Bears take charge again

Posted on 10 September 2015 by VRS  |  Email |Print

On Wednesday, the gold price took a huge hit after economic news from the US gave fresh impetus for an interest rate hike when the Federal Reserve meets next week. In afternoon dealings on the Comex market in New York, gold futures for delivery in December lost $15.60 to $1,105.30 an ounce.
Gold came close to crashing through the psychologically important $1,100 level falling 1.9% from yesterday’s close during brisk lunchtime trade. Gold dropped to a five-year closing low of $1,084 little over a month ago. The US Labor Department’s job openings and labour turnover report released Wednesday showed an increase in unfilled position to 5.75 million, the highest level in at least 14 years………………………………………..Full Article: Source

Russia Rejected OPEC Overture, Says Sechin

Posted on 08 September 2015 by VRS  |  Email |Print

Igor Sechin, a Kremlin heavyweight and chief executive of Russia’s top oil producer Rosneft, said Monday that Russia had received — and rejected — an offer to join the Organization of the Petroleum Exporting Countries, the TASS news agency reported.
“The negotiations that are going on between Russia and OPEC are quite positive and lead to an exchange of opinions. OPEC proposed that Russia become a member,” Sechin told participants at a conference in Singapore, according to TASS. “[But] for Russia there’s no point in joining this organization,” he said. There had been speculation that Russia could join OPEC to help coordinate production cuts in an attempt to buoy oil prices that crashed last year and are now hovering at five-year lows………………………………………..Full Article: Source

Limited support for gold even if Fed delays rate rise – Barclays

Posted on 08 September 2015 by VRS  |  Email |Print

Barclays expects the first rise in interest rates from the Federal Reserve in March next year but sees this giving only limited support to gold, it said. The market is now pricing in a low probability of a US rate rise in September, the bank said in a note on Monday. The latest trade data as well as gold leasing and stock data, however, suggest there was some stabilisation of demand in China and India, especially following price falls in July.
China’s July gold imports were up 22 percent month-on-month and 79 percent year-on-year. Shanghai Gold Exchange warranted stock has also moved back to a more typical level after a big build-up in the third quarter, while the gold lending rate – albeit still at a low level – has also stabilised following the recent decline, it said………………………………………..Full Article: Source

U.S. CLOs Have Material Exposure to Commodities, Moody’s Says

Posted on 04 September 2015 by VRS  |  Email |Print

Collateralized loan obligations that were created after the financial crisis in the U.S. have material exposure to the commodities sector, which poses an increased risk to investors due to the plunge in crude prices.
That’s the finding of a report published yesterday by Moody’s Investors Service, which shows that as of June the top 20 individual CLOs with the largest exposures to companies in the commodities-related sector ranged from 14.4 percent to 21.3 percent of their holdings. A fund managed by GoldenTree Asset Management LP had the biggest exposure followed by two CLOs issued by Halcyon Asset Management LLC, the report shows………………………………………..Full Article: Source

India: Gold demand to surge by 70% during festive season

Posted on 02 September 2015 by VRS  |  Email |Print

Gold demand during the festive season of Dhanteras, Dusshera and Diwali will surge by up to 70 per cent despite a rise in price of the yellow metal, according to gold jewellers and traders. The price of gold is expected to go up by almost Rs 2,000 per 10 grams during the season.
“The festive season is approaching, a season where people give gold items as gifts to each other. So the demand of gold is expected to grow by 65 to 70 per cent till the end of November,” Mr. Shashank Goyal, founder of SLG Jewellers told The Hindu. According to experts, the price of gold is expected to increase to Rs 28,500 per 10 grams by the end of October. It stands at Around Rs 26,700 at the moment………………………………………..Full Article: Source

Collapse in premiums hits aluminium trade

Posted on 02 September 2015 by VRS  |  Email |Print

While aluminium prices have declined to six-year lows, what has really hurt big trading houses such as Glencore and Noble Group is the sharp fall this year in what is known in industry speak as “premiums”.
This is the extra cost added on to the price that buyers pay to obtain the metal in a certain region, which normally includes insurance and delivery costs. It is the money you get paid on top of the London Metal Exchange price when you sell or trade physical aluminium………………………………………..Full Article: Source

Gold regains shine in August amid market turmoil

Posted on 01 September 2015 by VRS  |  Email |Print

Gold has had its best month in seven. The yellow metal rose 3.6 per cent to $1,134.93 an ounce in August — its best month since January, when it jumped 8.4 per cent. Gold’s lacklustre performance for much of the year (even through the crisis in Greece and Ukraine) prompted chatter that it was losing its safe haven appeal, as the market increasingly focused on the looming rate rise from the Federal Reserve.
As an asset which offers no yield, gold came under pressure amid speculation that a rate rise would push investors to higher yielding assets………………………………………..Full Article: Source

Kuwait- Resilience Of Shale And Disappointment Of OPEC

Posted on 31 August 2015 by VRS  |  Email |Print

Almost nine months have passed since the historic OPEC meeting when its swing producer role was abolished and its members were allowed to produce as much oil as they can in order to cause the oil prices to reduce so that US shale oil producers would be forced out of business. However, the opposite happened. Shale oil producers are still in business even though oil prices have dropped below 50 per barrel.
In fact, USA oil production is at its peak with production of more than 9.5 million barrels a day, and is bound to increase further. So where did OPEC go wrong? Despite having all kinds of information regarding energy and being in daily contact with both sides of the market consumers and producers, it still failed to estimate the power of the shale oil producers. In fact, it even failed to know the actual cost for producing one barrel of shale oil………………………………………..Full Article: Source

Gold Bulls Pile In Just Before Bullion Loses Its Job as a Haven

Posted on 31 August 2015 by VRS  |  Email |Print

Gold bulls piled into the metal in hopes that the turmoil sweeping financial markets would finally help revive prices. They were wrong. Instead of a rally, futures in New York fell for four straight sessions even as global equities plunged to a two-year low. Rather than providing a refuge from the meltdown, gold’s volatility rose right along with a measure of equity turbulence, diminishing its appeal as a haven.
As stocks started to recover, the metal kept falling because of reports that signaled gains for the U.S. economy. It’s been a tough two years for investors in gold, which first fell into a bear market in April 2013. More than $52 billion has been wiped from the value of physical bullion funds since then. ……………………………………….Full Article: Source

HSBC trims metal price forecasts

Posted on 31 August 2015 by VRS  |  Email |Print

HSBC has lowered its silver and platinum group metals price forecasts for this year and next citing a recent drop in prices and weaker Chinese demand. “Even a modest Chinese slowdown has the capacity to drive prices of these metals lower, and we believe those concerns have led to the sharp price falls,” the bank said in a note.
China is a major importer of all three metals for use in the car, industrial and jewellery sectors. Silver prices had fallen to six-year lows, while palladium prices touched a five-year low on August 26. The broad-based commodity declines may be encouraging margin call liquidation and fresh selling in platinum group metals, HSBC said………………………………………..Full Article: Source

Natural Gas Rises as Commodities Rebound From Global Selloff

Posted on 26 August 2015 by VRS  |  Email |Print

Natural gas futures gained for the first time in three days, rebounding from an 11-week low Monday amid a global rout in commodities, as hotter weather may spur demand from power plants. Temperatures in New York may reach 89 degrees Fahrenheit (32 degrees Celsius) on Aug. 29, 8 above normal, according to AccuWeather Inc.
The heat may put a dent in a gas glut while traders claw back some of yesterday’s across-the-board losses stemming from a currency devaluation in China, according to Bob Yawger, director of the futures division for Mizuho Securities USA Inc………………………………………..Full Article: Source

Opec powerless to halt oil price slide, warns former group president

Posted on 25 August 2015 by VRS  |  Email |Print

Opec is powerless to arrest the slide in oil prices unless producers outside the group such as Russia match any cuts in output, according to a former president of the group. With oil prices plummeting due to global oversupply, the Organisation of the Petroleum Exporting Countries (Opec) would be unable to stabilise the market on its own, Abdullah bin Hamad Al-Attiyah said.
The group - which is mainly comprised of Middle Eastern and South American oil producers - would need agreement from other oil-producing nations. “I don’t see any light at the end of the tunnel,” said Mr al-Attiyah. “Opec and non-Opec need to agree to support the market.” Brent crude is down 57pc over the last year to $43 per barrel with pressure mounting within Opec for an emergency meeting of oil ministers to discuss the price slide………………………………………..Full Article: Source

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