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‘Well-Timed’ OPEC Talk Forces Oil Bears Into Record Reversal

Posted on 22 August 2016 by VRS  |  Email |Print

OPEC has done it again. Talk of a potential deal to freeze output helped push oil close to $50 a barrel and prompted money managers to cut bets on falling prices by the most ever. West Texas Intermediate, the U.S. benchmark, went from a bull to a bear market in less than three weeks.
OPEC is on course to agree to a production freeze because its biggest members are pumping flat-out, said Chakib Khelil, the group’s former president. Saudi Energy Minister Khalid Al-Falih said that the talks may lead to action to stabilize the market………………………………………..Full Article: Source

LBMA says banks back its plan to change London gold market

Posted on 19 August 2016 by VRS  |  Email |Print

Members see an electronic trade repository as the best way to improve transparency. The body charged with regulating London’s $5tn a year gold market says banks in the city are backing its plans to bring greater transparency to the market as the London Metal Exchange prepares to launch a gold futures exchange.
Ruth Crowell, head of the London Bullion Market Association, said its members, which include some of the world’s biggest banks, see an electronic trade repository as the best way to improve transparency and address regulatory pressure that is threatening to drive up costs………………………………………..Full Article: Source

Saudi Arabia has oil traders hanging on every word

Posted on 18 August 2016 by VRS  |  Email |Print

Kingdom offers a reminder that well-chosen words can move the oil market. Central bankers have long understood that a few well-placed words can wield nearly as much power as pulling the actual levers of monetary policy. It is a lesson that Opec and Saudi Arabia has started to heed.
Just a few short sentences from Saudi Arabia’s energy minister Khalid al-Falih last week sent hedge funds scrambling to cover large bets against the oil price, subsequently propelling Brent crude 10 per cent higher and largely silencing fears the market was on the cusp of another rout………………………………………..Full Article: Source

Prickly Iran Defies, Then Keeps OPEC Guessing

Posted on 18 August 2016 by VRS  |  Email |Print

Iran is trying to make a comeback after years of crushing economic and financial sanctions placed against its energy sector by Western powers over Tehran’s nuclear ambitions.
In January, Iran’s deal with the so-called P5+1 (the U.S., U.K., France, Germany, Russia and China) came into effect, effectively reopening international markets to hundreds of thousands of barrels of Iranian oil and returning billions of dollars in frozen oil money to Iran………………………………………..Full Article: Source

End of the Affair as Chinese Commodity Traders Exit Market

Posted on 17 August 2016 by VRS  |  Email |Print

Chinese traders are falling out of love with commodities. Aggregate volumes across the nation’s three biggest exchanges have shrunk to the lowest level in six months, a shadow of the fevered trading in March and April when retail investors charged into markets for everything from iron ore to cotton, driving up prices and stoking fears of a bubble.
Chinese authorities brought an end to the frenzy by introducing curbs on excessive speculation and trading has failed to recover since. Flush with record credit and hunting for returns, investors piled into commodities in the first half of the year, spurred by bets that China’s economic stimulus and industrial reforms would lead to shortages of raw materials………………………………………..Full Article: Source

Mining sector outlook improves despite losses and Brexit

Posted on 17 August 2016 by VRS  |  Email |Print

With mining company BHP Billiton reporting a record loss for the past year, you could be forgiven for thinking it was all doom and gloom for the sector. But all is not as it seems. In fact, data from the FTSE 100 shows quite the opposite. The seven mining companies account for close to 5.5% of the value of the index.
“At the end of 2015 they accounted for around 2.5%, so they’ve more than doubled in a year, which is impressive,” says Jeremy Wrathall, mining team leader at Investec. The reversal in the fortunes of the sector is shown clearly by diversified mining company Anglo American’s experience………………………………………..Full Article: Source

OPEC deal a tough task, as oil output freeze expectations rise

Posted on 16 August 2016 by VRS  |  Email |Print

OPEC will probably revive talks on freezing oil output levels when it meets non-OPEC nations next month as top exporter Saudi Arabia appears to want higher prices, according to OPEC sources, although Iran, Iraq and Russia present obstacles to a deal.
OPEC will probably revive talks on freezing oil output levels when it meets non-OPEC nations next month as top exporter Saudi Arabia appears to want higher prices, according to OPEC sources, although Iran, Iraq and Russia present obstacles to a deal………………………………………..Full Article: Source

Chakib Khelil is optimistic about OPEC meeting in Algiers

Posted on 15 August 2016 by VRS  |  Email |Print

Former Algerian Minister of Energy and former president of the Organization of Petroleum Exporting Countries OPEC, Chakib Khelil, is optimistic about the informal meeting of OPEC, to be held in Algiers on the sidelines of the International Forum on Energy on September 26 to 28, especially after the statements of Saudi oil Minister that shows a willingness to move towards market stabilization.
Chakib Khelil believes in his statement to Ennahar TV that OPEC members will fail to rebalance the market as supply remains high compared to demand. Former Algerian Energy Minister added that during the last meeting, “almost all oil producers had reached their maximum production level, they therefore had nothing to lose by deciding a freez.”……………………………………….Full Article: Source

Improved Approach To Investing In Commodities​

Posted on 12 August 2016 by VRS  |  Email |Print

New analysis by Source UK shows that commodity investors can maximise their risk-adjusted returns by using ETFs that provide exposure to ‘second generation’ indices. These aim to improve performance compared to ‘first generation’ indices by managing exposures across the futures curve and diversifying trading strategies.
‘First generation’ indices are susceptible to the negative roll-yield problem because of an inflexible approach to reinvesting in the futures used to track commodities, as they are restricted to trading the front-month contracts where the futures curve is typically the steepest………………………………………..Full Article: Source

Here’s proof that Saudi Arabia doesn’t care about killing oil prices - only the competition

Posted on 12 August 2016 by VRS  |  Email |Print

There is proof that Saudi Arabia is more interested in trying to kill competition in the oil industry at the expense of cratering oil prices - its oil production just hit a record high.
The country said output increased by 123,000 barrels per day, which pushed overall production for July to 10.67 million barrels per day. This surpasses the previous record of 10.56 million per day from June last year. While Saudi does pump out more oil usually in the summer months to sate domestic demand, the record production level is likely to be scrutinised because oil prices are still around 55% lower than they were since June 2014………………………………………..Full Article: Source

World Gold Council, LME to launch LMEprecious in 2017

Posted on 11 August 2016 by VRS  |  Email |Print

The World Gold Council, LME and several key market participants plan to introduce a suite of exchange-traded and centrally-cleared precious metals products.
Gold market development organisation, the World Gold Council, and futures exchange, the London Metal Exchange (LME), together with key market participants including Goldman Sachs, ICBC Standard Bank, Morgan Stanley, Natixis, OSTC and Societe Generale will be launching the initiative as a means to drive greater market transparency and to support and aid ongoing regulatory change………………………………………..Full Article: Source

OPEC smoke and mirrors’ may be all it needs to boost oil

Posted on 10 August 2016 by VRS  |  Email |Print

Just the whiff of an OPEC meeting has driven oil prices higher, squeezed shorts in the futures market — and made further inaction by the cartel more likely. But that hasn’t stopped market chatter that the Organization of Petroleum Exporting Countries could revisit the idea of a production freeze when it meets informally on the sidelines of an energy conference in Algeria late next month.
Oil’s recent dip back into the $30s per barrel may be enough to get some OPEC members to curb their bickering and consider joint action — if crude plummets again. But for now, analysts see the cartel just talking, with the more needy members pushing for relief through a freeze or other deal………………………………………..Full Article: Source

OPEC Under Pressure After Oil’s Slide Into a Bear Market (Video)

Posted on 10 August 2016 by VRS  |  Email |Print

The Organization of Petroleum Exporting Countries is talking about oil prices and special meetings in September, a sign it’s under pressure again after crude fell back into a bear market last week. The producers of about 40 percent of the world’s crude found unity and optimism when they last met in June, thanks in large part to the almost 90 percent recovery in prices from a 12-year low.
The market has since renewed its decline as the global supply glut proves more resilient than expected, but there’s little reason to think OPEC is any closer to taking action to eliminate the surplus………………………………………..Full Article: Source

OPEC Still Faces the Same Obstacles to Agreeing Oil-Output Limit

Posted on 09 August 2016 by VRS  |  Email |Print

An informal OPEC meeting next month is unlikely to deliver any agreement to limit production because several members including Iran are still pumping below capacity. Members of the Organization of Petroleum Exporting Countries are planning to hold talks next month on the sidelines of the International Energy Forum in Algeria, the group’s president Mohammed Al Sada said.
But the same obstacles that prevented an agreement on proposals to freeze output in April or fix a new production target in June are still there, according to UBS Group AG………………………………………..Full Article: Source

The victory for gold bulls is only just beginning

Posted on 09 August 2016 by VRS  |  Email |Print

The expansion of unconventional monetary policy will feed demand. Gold prices have rallied more than 30 per cent since the lift-off in US interest rates in December. A sharp reversal in pricing, sentiment and positioning driven by a myriad macro and micro factors has left the gold bears and bulls as polarised as ever.
The bearish camp, which has featured prominent and respected analysts like Goldman Sachs, tends to have a constructive view on the US dollar, the ability to raise interest rates, normalise global monetary policy, and generally a benign view on the global economy and inflationary risks………………………………………..Full Article: Source

Why oil bears shouldn’t count on U.S. shale rebound

Posted on 04 August 2016 by VRS  |  Email |Print

Oil market bears argue that rebounding production in U.S. shale regions will add to the global glut of crude, slowing the rebalancing of the market. Don’t be so sure, say skeptics.
Production-rebound proponents argue that the recent rise in U.S. rig counts reflects a new reality in the oil market. In this scenario, the U.S. crude benchmark’s spring rebound, which saw prices push back above $50 a barrel by early June, and a continued fall in production costs were likely to entice previously hard-hit shale producers to reopen closed wells and rejoin the fray………………………………………..Full Article: Source

Gold Bull Market or just a Bear Market Rally?

Posted on 01 August 2016 by VRS  |  Email |Print

While many are touting a new bull market in Gold, and Silver for that matter, history suggests otherwise. When we look back at the history of commodity prices for the past two centuries we observe generally short bull markets followed by longer bear markets. Since Gold was fixed for most of this period a chart going that far back would be of little use.
Notice for over 200 years commodities remained in a trading range. Demand drove prices up, then oversupply brought prices right back down. This all changed when the US went off the Gold standard in 1971. Commodity prices soared, along with Gold, and the bull/bear cycles became more uniform………………………………………..Full Article: Source

US oil in bear market territory: 5 things to watch

Posted on 29 July 2016 by VRS  |  Email |Print

Crude oil’s quiet slide from its 2016 high sharpens questions about the outlook. The major US crude oil benchmark has fallen into a bear market, heaping more pressure on oil companies and major producing countries that had hoped the worst of the rout was over.
West Texas Intermediate, the main US crude benchmark, fell to $41.14 on late Thursday afternoon, down 20.4 per cent from its intraday peak of $51.67 per barrel on June 9. A 20 per cent decline is the technical definition of a bear market………………………………………..Full Article: Source

Base metal mining market - infrastructure development activities to be key enabler of growth

Posted on 28 July 2016 by VRS  |  Email |Print

Global estimates entail that nearly 40% of the world economy is directly or indirectly affected by the mining industry. Consistent supply of base metals such as copper, zinc, nickel, aluminum, and tin is central to the development of sectors such as infrastructure, construction, manufacturing, transportation, equipment, and utilities. Flourishing growth across these sectors in the past few years, especially in developing regions such as Asia Pacific, is the major demand driver of base metals in the global market.
The European Union has significantly increased its investment aimed at the development of the region’s energy infrastructure, to make it more complaint with renewable energy sources, in the past few years. Transportation, construction, and equipment industries, which are some of the principal consumers of a number of base metals, are also expanding at a plausible rate across the globe. (Press Release)

Buy Commodities; They Shouldn’t Be Tanking

Posted on 27 July 2016 by VRS  |  Email |Print

There’s a new meme going around that claims that we’re heading into a global economic slowdown. It sounds a lot like the other dire warnings that we heard in February, May and most recently in June right after the Brexit vote: “Slowdown! Crash! Recession! Catastrophe!” But the fearmongers were wrong then, and I believe that they’re wrong now.
Granted, the global economy isn’t growing very rapidly. But it is growing — and has defied all expectations of a recession so far because we continue to see high and rising levels of fiscal stimulus from the world’s major economies. That means the United States, China, Japan and very soon even the European Union (I predict)………………………………………..Full Article: Source

July Zinc Price Forecast: Multi-Month Highs Reached

Posted on 27 July 2016 by VRS  |  Email |Print

Zinc prices , along with nickel, rallied to hit multi-month highs last week as investors hedged on continued supply disruptions. According to a report from the Financial Times, the zinc price climbed to its highest point in 14 months to $2,275.5 per metric ton on the London Metal Exchange.
Investor sentiment surrounding commodities has improved due in part to a weaker dollar and growing oil prices, in addition to government stimulus in China. That stimulus has enhanced the Far East nation’s transportation and infrastructure sectors. Meanwhile, nickel could reach as high as $12,000 per metric ton………………………………………..Full Article: Source

Could a Trump win lift gold?

Posted on 26 July 2016 by VRS  |  Email |Print

A new ABN AMRO study states gold will rise in price under a potential Trump presidency. “If Trump were to become president gold prices will likely perform well, because we expect that his policies will be inward looking and will weaken the fundamentals of the US economy,” ABN AMRO report author Georgette Boele said.
The report cited gold’s trajectory under previous presidents, stating that inflation has always been a driver for gold, and economic uncertainty coupled with likely domestic uncertainty will drive investors to gold, creating a more bullish market………………………………………..Full Article: Source

Brexit sparked economic volatility and uncertainty

Posted on 22 July 2016 by VRS  |  Email |Print

The British move fast. While we wrestle for a couple of years with the succession of leadership in the White House, the British have in swift days bounced out Prime Minister David Cameron, and his successor Theresa May, is already governing in 10 Downing Street.
Cameron had no choice but to fall on his sword since for the sake of a squabbling Conservative Party, beset by a reactionary far right, he miscalculated the risk of a national referendum of dubious constitutionality. Britain has got along quite well without the kind of constitution written by the U.S. framers, but this time Britain’s ‘muddling through’ just did not work………………………………………..Full Article: Source

Why the Dollar Is the Enemy of Commodity Values

Posted on 21 July 2016 by VRS  |  Email |Print

The global financial marketplace is a complex, interconnected organism where every company, commodity, and financial asset is just a piece of a much larger picture. What happens with one asset can influence another, and so on. There’s a relationship that exists between asset classes that, while not perfect, tends to follow a pattern over time.
The relationship usually follows a certain order – currencies up, commodities down, bonds up, and stocks up or down. It works in reverse as well with commodities going higher if currencies fall. Keep in mind that commodity values play a bigger role in this relationship than it might appear – commodity prices drive stock and bond performance. Let’s take a look at how this works………………………………………..Full Article: Source

Libya: OPEC member plots big oil comeback

Posted on 21 July 2016 by VRS  |  Email |Print

One of the biggest mysteries in the oil market resides in the war-torn nation of Libya. A long civil war and the rise of ISIS have limited Libya’s oil production to just a fraction of what it was in 2010, before the uprising that ousted and ultimately killed the country’s longtime dictator Moammar Gadhafi.
Libya, a large global oil producer, appeared to reach a breakthrough earlier this month when rival governments in the east and west agreed to merge their competing oil companies. The agreement was hailed as a positive step and some even predicted Libya could quickly double its oil production, flooding the oversaturated market with tons of high-quality crude………………………………………..Full Article: Source

Gold Fields forecast sparkles on strong dollar gold price

Posted on 21 July 2016 by VRS  |  Email |Print

In some rare good news from the gold-mining industry, Gold Fields reported on Tuesday that it expected its output for the year to June to increase marginally to 1.044-million ounces. One analyst said the company, which is headed by Nick Holland, would be increasingly attractive to investors if it continued to reduce its costs.
Citing a slightly stronger US dollar gold price, and an Australian dollar that has weakened 5% year-on-year against the greenback, the company said on Tuesday that it expected its half-year earnings per share to be 14 US cents higher than the zero cents reported in the same period in 2015………………………………………..Full Article: Source

A global battle for trading supremacy in industrial metals

Posted on 18 July 2016 by VRS  |  Email |Print

China has loomed large over the world of industrial raw materials for many years. The prices of metals from aluminum to zinc have long swayed to the beat of the world’s largest manufacturing country. But this is the year that China has emerged from the limelight to take centre-stage in the trading of those metals.
On one day alone, March 10, trading volumes on the Dalian Exchange iron ore contract exceeded one billion tonnes, more than the combined annual output of the world’s biggest three producers, Rio Tinto, BHP Billiton and Brazil’s Vale………………………………………..Full Article: Source

Guess what’s on pace to book the biggest gain among commodities this week

Posted on 15 July 2016 by VRS  |  Email |Print

Cotton futures boast the largest gain among major commodities this week, after rallying Thursday to their highest level in more than two years thanks to a slowdown in global production and signs of stronger demand. Analysts said that the commodity is likely due for a correction after such a spectacular rise, but its lofty prices may be here to stay.
On Thursday, cotton for December delivery rose 1.2% to trade at 74.04 cents a pound on the ICE Futures U.S. exchange. Prices were poised to log their highest settlement since June 2014, and readied for a weekly gain of 12.5%, according to FactSet data………………………………………..Full Article: Source

In World Of $50 Oil, Shale Beats Deepwater

Posted on 14 July 2016 by VRS  |  Email |Print

U.S. shale is the lowest cost option for new oil production and is likely to be more competitive than conventional offshore drilling, according to a new report from Wood Mackenzie. The U.S. shale industry has weathered the oil price downturn, tweaking drilling practices and cutting costs in order to stay in business.
A new report from Wood Mackenzie finds that the industry is proving to be resilient and flexible in the face of the worst oil market crisis in three decades. The report concludes that U.S. shale companies have managed to cut costs by as much as 40 percent since 2014………………………………………..Full Article: Source

Platinum: Demand Up, Supply Down

Posted on 14 July 2016 by VRS  |  Email |Print

Platinum demand has increased and is set to keep on rising compared to last year according to industry analysts, whereas supply is falling. Total demand for the metal, which finds its single largest use by industry in catalysts to help clean emissions from diesel engines, is set to grow by 2% compared to 2015, while total supply shrinks 3% according to the Platinum and Palladium Focus 2016 from leading precious metals consultancy Metals Focus.
Last year’s total supply of platinum was just over 8 million Troy ounces, with total demand reaching 8.2moz, says the report. That marked a 17% and 9% increase respectively from 2014………………………………………..Full Article: Source

Goldman Sachs Revises Base Metals Outlook

Posted on 14 July 2016 by VRS  |  Email |Print

Goldman Sachs has revised its base metal outlook for the year and Alcoa, Inc., has opened earnings season by reporting lower-than-expected Q2 profits. Goldman Sachs on Monday raised its outlook for zinc, aluminum and nickel prices anticipating supply inequalities to continue across the metals sphere throughout the second half of the year.
“In our view, the impact of the prior stimulus is still set to result in sufficient demand growth such that we will continue to see supply differentiation across the metals space during the second half of 2016,” the bank said in a note to investors………………………………………..Full Article: Source

The relationship between gold and silver has changed dramatically

Posted on 12 July 2016 by VRS  |  Email |Print

While gold has soared this year, silver has skyrocketed, leading to a big move in a key measure of relative strength often used by traders. In the beginning of 2016, an ounce of gold was worth as much as 77 ounces of silver; by the end of February, that number would rise above 83.
Yet on Monday, with gold trading at $1,357 per troy ounce and silver at $20.40, the gold/silver ratio is down to 66.5. While this the lowest this indicator has been since September 2014, the ratio is actually still above historical norms………………………………………..Full Article: Source

Commodities Rally Is Fizzling Out as Merchant Fund Sees Oil Drop

Posted on 08 July 2016 by VRS  |  Email |Print

The best is probably over for commodities this year as the Brexit vote adds risks to global growth and oil is set to retreat, according to the Merchant Commodity Fund, which returned 9 percent in the first half.
The fund, run by ex-Cargill Inc. employees Doug King and Michael Coleman, has changed its commodities outlook to neutral from bullish earlier this year. The U.K. vote to exit the European Union has led to uncertainty and growth remains lackluster in top user China, King said. Oil may drop to $40 to $45 a barrel within three weeks as stockpiles fall more slowly than expected, he said………………………………………..Full Article: Source

IEA warns of ever-growing reliance on Middle Eastern oil supplies

Posted on 08 July 2016 by VRS  |  Email |Print

Agency says rise in demand amid price slump has given region biggest market share since 1970s. The world risks becoming ever more reliant on Middle Eastern oil as lower prices derail efforts by governments to curb demand, the west’s leading energy body has warned.
The head of the International Energy Agency told the Financial Times that Middle Eastern producers, such as Saudi Arabia and Iraq, now have the biggest share of world oil markets since the Arab fuel embargo of the 1970s………………………………………..Full Article: Source

Gold Headed For $1500 And This Time It Really Is Different

Posted on 08 July 2016 by VRS  |  Email |Print

Gold has made quite a run and some bears argue that it will correct at least 300 points because of a commodity bear super cycle. Despite the long-term double top pattern in gold, one should not automatically presume that crowd behavior will react in a similar manner.
This time it really is different as the underlying economic fundamentals support higher gold prices. Currently, gold is in the midst of a bullish Fibonacci retracement and its next target is $1500………………………………………..Full Article: Source

The ‘last ugly chapter’ for prices is yet to come

Posted on 07 July 2016 by VRS  |  Email |Print

Commodity investors generally agree that the oil market is coming into balance, but huge stockpiles of fuel and teeming strategic Chinese crude inventories could send prices on one last, ugly slide lower, analysts tell CNBC.
On Wednesday, oil futures were down more than 1 percent, following a nearly 5 percent slide Tuesday, on worries that Britain’s vote to leave the European Union would slow economic growth and dent crude oil demand. Expectations of U.S. crude stockpile growth and further weakness in the Chinese economy created additional headwinds………………………………………..Full Article: Source

Is It Time For OPEC To Dissolve?

Posted on 06 July 2016 by VRS  |  Email |Print

OPEC is no longer functioning as a cohesive group. Is it time for OPEC to finally dissolve? The major oil-producing countries in the world heavily depend on the income from oil. A sharp drop in oil prices has rendered them vulnerable to terrorist attacks and political uprising.
As members of the Organization of the Petroleum Exporting Countries (OPEC), these countries previously wielded power over oil prices and enjoyed the benefits of high oil prices. Unfortunately, the oil cartel is no longer behaving like a cohesive group, and infighting among the member nations is doing more harm than good………………………………………..Full Article: Source

Headwinds ahead for commodities as economic growth stalls

Posted on 05 July 2016 by VRS  |  Email |Print

While commodities such as base metals and oil have rallied in the wake of the June 23 Brexit vote, analysts at banks including Barclays, Citi, Bank of America, JP Morgan and Bank of China International have warned that the referendum result could lead to weaker global growth that will threaten underlying raw materials demand.
The commodities markets have so far proven resilient since the landmark referendum, particularly in China, where “there is not a single major commodities futures market where prices are trading lower than they were prior to the Brexit vote”, as Barclays analysts pointed out on Monday July 4………………………………………..Full Article: Source

Oil leads robust gains for commodity prices this year

Posted on 01 July 2016 by VRS  |  Email |Print

Total returns for a basket of 22 raw materials are over 20% since the start of January. Oil prices have risen around 34 per cent in the last six months, on target for the best start to the year since 2009 and helping commodities outperform other major asset classes during the first half of the year.
Data show total returns from the Bloomberg Commodity Index, which tracks returns from 22 raw material contracts, are over 20 per cent. This compares to global bonds, at about 9 per cent, and global equities that are down almost 3 per cent………………………………………..Full Article: Source

Basic Materials: Recent Commodity Rallies Leave Few Opportunities

Posted on 01 July 2016 by VRS  |  Email |Print

Optimism continues to reign in the basic materials sector year to date, but investors are overestimating the sustainability of recent commodity price rallies. The basic materials sector remains severely overvalued, with a market-cap weighted price/fair value estimate of 1.26 as of May 31.
The reasons for rallies in steel, iron ore, and gold differ, but we don’t expect any of the price gains to hold. Limited impact from steel trade cases and significant oversupply will bring pain to steelmakers and iron ore miners, respectively, in the second half of 2016. The recent Brexit vote helped extend the 2016 gold rally as interest rate hikes are potentially delayed through the second half of the year……………………………………….Full Article: Source

Saudi Arabia Is Changing Its Tone In The Oil Market

Posted on 27 June 2016 by VRS  |  Email |Print

Saudi Arabia is talking the oil market up lately. That’s a big change from a few months when it was talking the market down. In fact, Saudi Arabia has been doing much more than talking the oil market up – it has been hiking oil prices.
It was back in February when Ali al-Naimi, Saudi Arabia’s petroleum minister at the time, told American frackers publicly that they would be crushed by the market. By an oil oversupply, that is, due to the fact that they didn’t have the cost structure to survive an on-going price war that threatened to take oil close to $20………………………………………..Full Article: Source

Has the Oil Market Finally Bottomed?

Posted on 27 June 2016 by VRS  |  Email |Print

Ever since oil prices started tumbling in late 2014, oil executives, analysts, and investors have been wondering when the market will finally hit rock bottom. While there have been many guesses over the past two years, the data is starting to suggest that the market could have bottomed out during the second quarter. At least that is the view of oil-field services giant Schlumberger.
At a recent industry conference, Patrick Schorn, Schlumberger’s president of 0perations, detailed what the company is seeing in the oil market. He started off by noting that market conditions during the second quarter were as bad as it expected………………………………………..Full Article: Source

Gold: Why You Should(n’t) Care About Brexit

Posted on 23 June 2016 by VRS  |  Email |Print

Right now, global markets are dancing to the Brexit beat. Traders plow money into equities and sell gold every time a poll leans toward the UK staying in the EU. Fifteen minutes later they are reversing because a poll says it’s a tossup. We feel if you are invested in Gold you shouldn’t care. If you are trading Gold you should.
First: let’s quickly look at the logic behind the market’s gyrations on Brexit perception. The UK Leaves: GBP Gets Slammed- Sterling devalues quickly from what can best be called “separation anxiety”. Stocks are Sold- in a riskoff frenzy. Gold Rallies- as a hedge against uncertainty………………………………………..Full Article: Source

Rosneft’s Sechin says Saudi Arabia, U.S. and Russia call shots on oil markets

Posted on 22 June 2016 by VRS  |  Email |Print

Igor Sechin, the head of Russia’s top oil producer Rosneft, said on Tuesday that Saudi Arabia, the United States and Russia were the three main players on global oil markets, dismissing again OPEC’s role as a regulator. He told Rossiya-24 TV that Russia’s role in hydrocarbon markets will strengthen.
Russia is the world’s top oil and natural gas producer, pumping oil at around 10.8 million barrels per day. It plans to at least keep production of crude oil, its chief export commodity, at the current level………………………………………..Full Article: Source

Oil prices under pressure as hedge funds adjust positions: Kemp

Posted on 21 June 2016 by VRS  |  Email |Print

Hedge funds cut their net long position in the main crude futures and options contracts by 63 million barrels, 10 percent, in the week to June 14, as the rally in oil prices showed signs of running out of steam.
The one-week reduction in the net long position was the largest since July 2014, according to an analysis of data published by the U.S. Commodity Futures Trading Commission and the Intercontinental Exchange. Hedge funds and other money managers cut their combined net long position in the three main Brent and WTI futures and options contracts from a near-record 633 million barrels to 570 million………………………………………..Full Article: Source

Nigeria floats its currency

Posted on 17 June 2016 by VRS  |  Email |Print

Bare shelves in supermarkets and soaring inflation would worry any central-bank governor. For Godwin Emefiele in Nigeria, the added twist is that both problems are partly his fault. The central bank’s policy of trying to maintain the value of the naira, Nigeria’s currency, in the face of a slump in the price of oil, which used to account for about 90% of the country’s export earnings, has failed miserably. Now it is being scrapped.
Emefiele tried heroically to conserve the country’s dwindling reserves of foreign exchange. In effect, he banned the import of a huge range of goods, from tinned fish to toothpicks; arbitrarily rationed the supply of dollars from the central bank to importers; and threatened to clamp down on people trading dollars on the black market………………………………………..Full Article: Source

OPEC Has Its Way as China Oil Output Cut by Most in 15 Years

Posted on 14 June 2016 by VRS  |  Email |Print

China’s crude production dropped by the most in 15 years in another sign that OPEC’s strategy of flooding markets to drive out higher-cost suppliers is working in the world’s biggest energy consumer.
The Asian nation reduced oil output in May by 7.3 percent from a year ago to 16.87 million metric tons, according to data from National Bureau of Statistics released on Monday. That’s the biggest decline since Feb. 2001………………………………………..Full Article: Source

FAO sees stable commodity prices amid abundant production

Posted on 13 June 2016 by VRS  |  Email |Print

The global food commodity markets are on a stable path for the year ahead, with solid production prospects and abundant stocks pointing to a broadly stable outcome for prices and supplies, the Food and Agriculture Organisation says.
In its biannual Food Outlook, FAO says lower food prices than last year means that the world’s food import bill are on course to fall to $986 billion this year — below $1 trillion for the first time since 2009 — even as traded volumes increase………………………………………..Full Article: Source

Should Western Steelmakers Exit the Commodity End of the Market?

Posted on 10 June 2016 by VRS  |  Email |Print

It’s not an unreasonable question. Certainly in Europe, few if any steelmakers are making any money. Capacity utilization is woefully low forcing steelmakers to fight for sales and depriving them of any price-setting opportunities.
Steelmakers and much of the media lay the blame on China’s doorstep. Although over half of China’s major producers made losses in 2015, exports soared by 20% to 112 million metric tons last year, more than the total output of the world’s second-largest producer, Japan………………………………………..Full Article: Source

Saudi Arabia sets 2030 oil, gas targets

Posted on 08 June 2016 by VRS  |  Email |Print

Saudi Arabia’s cabinet approved a new economic plan Monday to diversify state revenue in the world’s largest crude oil exporter away from oil by 2030. It also set oil and gas production-capacity targets for the period.
The National Transformation Program elaborates on the Vision 2030 document released in April as the brainchild of Deputy Crown Prince Mohammed bin Salman, the son of the Saudi monarch, Salman bin Abdul Aziz. The deputy crown prince has chaired the Council for Economic and Development Affairs since his father’s accession to the throne………………………………………..Full Article: Source

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