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Agricultural commodity prices are crashing too

Posted on 24 September 2014 by VRS  |  Email |Print

The mining commodity price squeeze was making headlines again on Tuesday as iron ore fell to a five-year low and BHP Billiton announced that 700 Bowen Basin coalmining workers would go, but the miners are not alone in feeling the pressure.
The price of wheat, Australia’s sixth biggest export, has fallen by about 31 per cent since May, and is at a four-year low. The price of corn, a key industrial food and drink-making raw material, has fallen by 28 per cent since mid August, and is also at four-year lows. The price of sugar has fallen by 25 per cent since mid-year, and soybean prices have fallen by 39 per cent………………………………………..Full Article: Source

Iran Sees Oil Prices Falling to $90 a Barrel By Late March

Posted on 24 September 2014 by VRS  |  Email |Print

Oil prices will likely fall to $90 a barrel by the end of the winter, Iran’s head of oil sales was quoted as saying Tuesday, countering views by other producers that expect prices to rebound. The remarks come after members of the Organization of the Petroleum Exporting Countries said in recent days they expect oil prices to rebound after it fell below $100 a barrel earlier this month.
But in remarks carried by Iran’s oil ministry website Shana, Mohsen Ghamsari, the director at the National Iranian Oil Company in charge of international oil sales, said that “if the oil market only looks at supply and demand, the oil price will further decline in the global market.”……………………………………….Full Article: Source

Why the fall in the oil price won’t last

Posted on 24 September 2014 by VRS  |  Email |Print

The impact of tensions in the Middle East and Eastern Europe on future oil production and OPEC’s ability to step in and manage the market are two major reasons why the oil price is nearing its floor, according to Lombard Odier’s Pascal Menges.
Geo-political risk has been one of the most used phrases in financial markets over recent months as ongoing tensions between Russia and Ukraine and the escalating conflict in Iraq have been seen by many as reasons to take a cautious stance in their portfolios. However, despite those potentially catastrophic macroeconomic headwinds, out-and-out safe havens such as gold bullion and crude oil have failed to spike………………………………………..Full Article: Source

OPEC Yet to Decide on Supply Cuts as Crude Prices Extend Retreat

Posted on 24 September 2014 by VRS  |  Email |Print

OPEC has yet to decide to cut its production target, the United Arab Emirates’ energy minister said, as crude prices extend a slide since June amid a boom in U.S. shale oil and signs of slower demand growth in China.
All 12 members of the group must agree before any decrease in its official limit of 30 million barrels a day, the U.A.E.’s Suhail Al Mazrouei said today, a week after OPEC’s secretary-general said it may lower the ceiling in 2015………………………………………..Full Article: Source

Rigged Gold Price Distorts Perception of Economic Reality

Posted on 24 September 2014 by VRS  |  Email |Print

The Federal Reserve and its bullion bank agents (JP Morgan, Scotia, and HSBC) have been using naked short-selling to drive down the price of gold since September 2011. The latest containment effort began in mid-July of this year, after gold had moved higher in price from the beginning of June and was threatening to take out key technical levels, which would have triggered a flood of buying from hedge funds.
The Fed and its agents rig the gold price in the New York Comex futures (paper gold) market. The bullion banks have the ability to print an unlimited supply of gold contracts which are sold in large volumes at times when Comex activity is light………………………………………..Full Article: Source

Gold prices: Who has the Midas touch?

Posted on 24 September 2014 by VRS  |  Email |Print

The glint of gold has caught the eye of Business Middle East. It was a golden week for buyers of bullion as prices continued to drop. Prices slid to their lowest level in nearly nine months, as the dollar rose to its highest in four years against a basket of major currencies. Why gold fell: There were several influences at play, but the biggest was higher borrowing cost expectations from the Federal Reserve.
After the latest meeting of the Fed’s policy committee, Chair Janet Yellen said interest rates in the US will remain near zero for a “considerable time,” but she also projected a faster rate of increases when they do occur………………………………………..Full Article: Source

Silver to $14/oz, but discounting QE end - analysts

Posted on 24 September 2014 by VRS  |  Email |Print

Silver prices are headed significantly lower in a stronger dollar market, some analyst now forecast. “Silver prices have returned to the levels seen before the financial crisis that started in 2008, and before quantitative easing (QE) was introduced,” noted Scotiabank analysts in a recent report. “It might, therefore, well be into the process of discounting the prospects of an end of the QE. For now, however, that seems to be one of the reasons behind the price weakness.”
Scotiabank added that the weakness was also justified by weak fundamentals, which show a large supply surplus . “Now that investors are not buying much silver through exchange-traded fund (ETFs), less of the supply surplus is being absorbed. That means more of the surplus has weighed on prices,” it added………………………………………..Full Article: Source

Zinc price rises on growing global demand

Posted on 24 September 2014 by VRS  |  Email |Print

The price value of zinc exceeded the highest value point; which was in the year 2009, in the first better half of this year. The main reason behind this unexpected rise in the metal is stated to be the increase of global demand over the global production. The squeeze further tightens as the US Mint boosts its production to 7.5 billion pennies this year, which is a 14 percent increase and will require more than 18,000 metric tons of zinc for the production.
Zinc has grown to become an essential element in our day to day life, and is being used in manufacturing most of the commodities starting from coins to sunscreen, where as in the US economy, the price of this metal is climbing up………………………………………..Full Article: Source

Australia cuts 2015 iron ore price forecast to $92.40/tonne

Posted on 24 September 2014 by VRS  |  Email |Print

Australia revised down on Wednesday its forecast iron ore price for 2015 to $92.40 a tonne from $94.60 a tonne previously, citing mounting competition among producers as supply rises.
“Over the next five years, iron ore prices are projected to average between $90 and $95 a tonne,” Australian forecaster the Bureau of Resource and Energy Economics (BREE) said in its latest quarterly update. “Further increases in supply indicate increasing price competition will be needed to push more high-cost supply out of the market over the next two years,” BREE said………………………………………..Full Article: Source

Metal prices weaken on global macro factors

Posted on 24 September 2014 by VRS  |  Email |Print

September is proving to be a rough month for the metals sector. In the first half of the month, prices of steel and base metals have fallen further on poor demand and weaker raw material costs. The strengthening dollar has made matters worse for base metals and internationally prices of aluminium are expected to correct further.
With demand from China cooling off and raw material prices coming down on over-supply, prices of steel and other base metals are expected to remain under pressure. Prices of Export HRC (FOB Black Sea) have drifted down to $540 a tonne, while Chinese HRC sheets declined to $498 a tonne. ……………………………………….Full Article: Source

Great American Group Analysts See Prices Rise for Many Base Metals

Posted on 24 September 2014 by VRS  |  Email |Print

Analysts with GA Advisory and Valuation Services, LLC, a division of Great American Group, Inc. report that pricing has increased for a number of non-ferrous metals in recent months amid tight physical supplies, despite lackluster demand in certain segments. In particular, pricing for aluminum, zinc, and lead climbed higher than expected.
“Stockpiles are dwindling and supply deficits are expected for these metals,” noted Michael Petruski, Executive Vice President of Great American Group’s Advisory and Valuation Services division. “Zinc prices have jumped nearly 25% over the year, as zinc production is slated to fall short of demand for the first time in seven years.” (Press Release)

Canadian miners struggle amid oversupply, price collapse

Posted on 24 September 2014 by VRS  |  Email |Print

The world is flooded with metals. Years of expensive expansions have left the market awash with iron ore, metallurgical coal and copper. For more than a decade, China’s growing economy fuelled the bull market in commodities. Mining companies spent billions on acquisitions and new projects around the world, adding waves of new supply to keep the country’s steel mills and factories humming.
Then China’s economic growth slowed and the good times stopped. Now the mining industry around the globe is suffering amid a price collapse for some key metals. Iron ore has lost more than half its value since the boom days, trading at $80 (U.S.) a tonne from a high of $190 in 2011………………………………………..Full Article: Source

High Oil Prices Are No Defense Against Risk Of Stranded Assets

Posted on 23 September 2014 by VRS  |  Email |Print

There has been much concern in the financial community recently about the risk of “stranded assets” in the oil industry, particularly if governments introduce strict carbon regulations to fight climate change and therefore reduce demand for oil, which would reduce the price.
At the same time, developing new oil wells is becoming more and more expensive. Most of the easy oil has already been discovered and much of it is under the control of national oil companies in countries ranging from Russia to Iran to Venezuela………………………………………..Full Article: Source

Why Oil Prices Are Dropping Despite Mideast Unrest

Posted on 23 September 2014 by VRS  |  Email |Print

Canada’s oilpatch is basking in an extended sweet spot of sorts. Commodity prices aren’t spiking in a way that’s sure to sink the global economy, nor are they plumbing depths that would force small producers out of business and big players to start tightening their belts and cutting jobs.
The global oil market, however, is changing and nowhere are the signs more evident than the reaction to what’s happening in the Middle East. In the past, military conflicts in the Middle East and the attendant threat of supply disruptions would send oil prices soaring. Today, oil prices are falling even as the region is seemingly unraveling………………………………………..Full Article: Source

Moody’s cuts price assumptions for natural gas, oil through 2015

Posted on 23 September 2014 by VRS  |  Email |Print

Moody’s Investors Service last week reduced its assumptions for average spot prices for North American natural gas after a mild summer cut demand for gas-powered electricity. Moody’s also cut its assumption for the spot prices for the two benchmark barrels of crude, European Brent and West Texas Intermediate (WTI). Oil prices dropped this past summer due in part to slower economic growth in some of the world’s major economies, a strengthened U.S. dollar, and growing non-OPEC supply, Moody’s said.
The rating agency lowered its price assumption for North American benchmark Henry Hub natural gas to $3.75 per million British thermal units (MMBtu) through 2015, a 50-cent decrease from its earlier assumption of $4.25/MMBtu set in June. However, its assumptions for 2016 and beyond are unchanged at $4/MMBtu………………………………………..Full Article: Source

Silver hammered to 4-year low as gold and base metals retreat

Posted on 23 September 2014 by VRS  |  Email |Print

Silver prices slid to their lowest in four years on Monday, with the prospect of rising U.S. interest rates undermining precious metals and industrial commodities dented by worries over Chinese demand.
Caught on both counts with dual roles as an industrial metal, widely used in electronics, and as an investment vehicle, silver tumbled more than 3 percent in just 40 minutes in early Asian trade to hit its lowest since mid-2010 at $17.30 an ounce………………………………………..Full Article: Source

Nickel Prices Decline to Five-Month Low on China Outlook

Posted on 23 September 2014 by VRS  |  Email |Print

Nickel tumbled to a five-month low on concern that demand will ebb in China, the world’s biggest user of industrial metals. Economic growth in China, Asia’s largest economy, faces downward pressure, Finance Minister Lou Jiwei said.
He affirmed that there won’t be major policy changes in response to individual economic indicators, damping prospects for a stimulus boost. Nickel has dropped as much as 22 percent from a 27-month high in mid-May………………………………………..Full Article: Source

Concerns over slower growth in China pull metal prices lower

Posted on 23 September 2014 by VRS  |  Email |Print

The base metals generally ended last week on a weak footing having failed to feel that the Chinese stimulus package, or FOMC statement had improved the outlook. Given the run up in many of the metals prices over the summer, which at the time looked as though prices were running ahead of the fundamentals, it now looks as though it is correction time with fund long liquidation generally weighing on prices.
The base metals ended Friday mixed with copper off 0.1 percent at $6,828 having been up as high as $6,992 on Tuesday. Aluminium and nickel were off around 0.5 percent, while zinc was up 0.6 percent, lead was up 0.7 percent in price and tin was up one percent………………………………………..Full Article: Source

Hedge Funds Make Record Bet on Lower U.S. Diesel Prices

Posted on 22 September 2014 by VRS  |  Email |Print

Speculators are making their biggest-ever bet on lower U.S. diesel costs after expanding stockpiles drove prices to a two-year low.
Hedge funds increased net-short wagers on ultra-low sulfur diesel for a fourth week, to the most in U.S. Commodity Futures Trading Commission data that begins in 2006. Prices retreated 17 percent since reaching this year’s high on Jan. 31………………………………………..Full Article: Source

Why Cheaper Oil Is Not A Big Threat For Gulf Economies

Posted on 22 September 2014 by VRS  |  Email |Print

The price of Brent crude has sunk by nearly $20 from its June peak to as low as $96 a barrel in recent weeks, its lowest level since mid-2012. Falling oil prices may prove the best medicine for economies in the Arab world, rebalancing growth towards countries struggling to recover from the Arab Spring uprisings without doing major damage to the oil exporters of the Gulf.
The price of Brent crude has sunk by nearly $20 from its June peak to as low as $96 a barrel in recent weeks, its lowest level since mid-2012. Behind the drop is soft economic data from top consumers such as China; a plentiful supply outlook points to further price declines in the next two years………………………………………..Full Article: Source

Saudi Arabia plays a complicated game with oil prices

Posted on 22 September 2014 by VRS  |  Email |Print

The recent sharp fall in oil prices shows a game within a game. Brent crude has lost nearly US$20 since June to fall below $100 a barrel, its lowest level for two years, even as Saudi Arabia cut 400,000 barrels per day from its production. The Saudis compete against non-Opec producers, while playing both with and against their Opec peers.
Saudi Arabia has a particularly complicated task at the moment. It firstly has to take the lead in deciding on a reasonable overall Opec production level. This never-ending question is one in which it is well versed in answering………………………………………..Full Article: Source

U.S. Wheat Prices Pushed to Four-Year Low

Posted on 22 September 2014 by VRS  |  Email |Print

U.S. wheat prices sit at the lowest level in more than four years, buffeted by sluggish demand for U.S. supplies amid abundant global stockpiles of the grain. Bumper crops around the world have added to supplies, driving global prices lower and reducing demand for U.S. wheat which, when shipping charges are added, is more expensive than grain produced in places such as the European Union and Ukraine.
“We continue to see decent demand in the Western hemisphere for wheat, but our freight rates are so much higher overseas,” said Shawn McCambridge, senior grains analyst for brokerage Jefferies Bache Commodities LLC. “You add that freight in, and we can’t be competitive in major markets.”……………………………………….Full Article: Source

Oil-Price Quirk Sends Crude Out to Sea

Posted on 19 September 2014 by VRS  |  Email |Print

Big oil companies and traders are stashing millions of barrels of crude on massive tankers bobbing in the ocean, in a bid to profit from a quirk in oil markets. Instead of moving crude from one port to another, a growing number of tankers are serving as floating warehouses for companies including Sinopec Ltd. and Vitol Group, according to people with knowledge of their operations.
Other companies such as Mercuria Energy Group are using the tankers to haul crude to on-shore storage facilities, these people said. In a rare split, crude is cheaper in the spot market than in the futures market, where bets are made on where prices will be in the months ahead. By buying physical stocks of oil and immediately selling futures, traders can lock in a profit……………………………………..Full Article: Source

Falling oil prices no big threat to Gulf economies

Posted on 19 September 2014 by VRS  |  Email |Print

Falling oil prices may prove the best medicine for economies in the Arab world, rebalancing growth toward countries struggling to recover from the Arab Spring uprisings without doing major damage to the oil exporters of the Gulf.
The price of Brent crude has sunk by nearly $20 from its June peak to as low as $96 a barrel in recent weeks, its lowest level since mid-2012. Behind the drop is soft economic data from top consumers such as China; a plentiful supply outlook points to further price declines in the next two years. It is potentially the biggest shift for the Gulf Arab economies since the global financial crisis five years ago. But the huge financial reserves that they have built since then mean they are likely to cope fairly comfortably with cheaper oil……………………………………..Full Article: Source

Barclays Lowers Gold Price Forecast, Raises Palladium Outlook

Posted on 19 September 2014 by VRS  |  Email |Print

Barclays on Wednesday lowered its price forecast for gold, citing “an increasingly bearish macro backdrop developing for gold,” while raising its outlook for palladium. “Rising rates and a significantly stronger dollar present headwinds, which are set to overwhelm any seasonal strength in physical demand this year,” the bank said.
Barclays lowered their fourth-quarter average gold price forecast to $1,220 an ounce. They now expect prices to average $1,270 an ounce in 2014. Their 2015 forecast calls for an average gold price of $1,180. Palladium’s “sizable” deficit “will likely overpower the downside risk presented by a weaker gold price and a stronger dollar and reinforce the longer-term support for prices,” Barclays said……………………………………..Full Article: Source

Oil slips on scepticism over Opec cuts

Posted on 18 September 2014 by VRS  |  Email |Print

Oil prices eased as traders paused to consider recent news from Opec and Libya as well as official data that showed a larger than expected increase in US stocks.
Brent, the international crude marker, rose sharply on Tuesday after Abdalla El-Badri, the secretary-general of Opec, said the cartel could trim production by 500,000 barrels a day next year, and fighting between militia groups also hit output at a key field in Libya…………………………………….Full Article: Source

Free Market Oil Price Decreases as US Oil Inventories Grow

Posted on 18 September 2014 by VRS  |  Email |Print

The free market oil price is declining as US commercial crude oil inventories grow, trading information revealed Wednesday. As of 6:51 p.m. Moscow time (14:51 GMT) the price of November futures on Brent Crude Oil decreased by 0.39 percent to $98.67 per barrel. The October futures price on WTI crude oil went down by 0.83 percent to $94.1 per barrel.
Earlier on Wednesday, the US Energy Information Administration reported that the volume of US commercial crude oil inventories increased over the week ending September 12 by 3.7 million barrels and stood at 362.3 million barrels…………………………………….Full Article: Source

Charts show gold could drop to $1,000 an ounce if cluster of support lines broken

Posted on 18 September 2014 by VRS  |  Email |Print

Charts show gold could drop to $1,000 an ounce if cluster of support lines broken Gold’s slide to eight-month lows over the last week has brought it within sight of a cluster of chart support lines near its 2013 lows, a breach of which could set up a slide back to $1,000 an ounce.
Analysts who study past price patterns for clues on the next direction of trade say a breach of support around the metal’s June 2013 low of $1,180 an ounce could see it fall back towards triple figures as soon as early next year…………………………………….Full Article: Source

OPEC’s Badri sees oil prices rising again by year-end

Posted on 17 September 2014 by VRS  |  Email |Print

OPEC secretary general Abdalla el-Badri said Tuesday he expected world oil prices to stage a recovery from two-year lows by the end of this year. The oil producer group’s crude basket, which dipped below the $100/barrel level in mid-August and has been falling since, stood at $94.68/b on Monday.
“The oil price has been falling over the past two months but we believe that the price will grow again by the end of the year,” Russian news agency Prime quoted Badri as saying after talks with Russian energy minister Alexander Novak in Vienna. A joint statement said the talks had reached “a general consensus that the market is well-supplied with healthy stock levels and adequate spare capacity.”……………………………………..Full Article: Source

Russian Central Bank Fears Weak Oil Price Could Threaten Economy

Posted on 17 September 2014 by VRS  |  Email |Print

The Bank of Russia said that the ruble and the Russian economy could be hit by sliding prices for commodities—the country’s key exports—if oil prices fail to recover in the midterm.
The ruble hit fresh all-time lows on Tuesday, weakening to 38.93 against the dollar, as banks and companies bought foreign currencies and external markets remained largely closed to Russian borrowers. A drop in the price of Brent crude to $98 per barrel from above $115 three months ago has added to downward pressure on the ruble………………………………………Full Article: Source

Gold Steadying On Physical, Safe-Haven Demand

Posted on 17 September 2014 by VRS  |  Email |Print

The combination of improved physical demand in Asia combined with safe-haven buying are helping gold continue to steady after last week’s weakness, with the U.S. gold futures modestly higher so far Tuesday for the second day in a row.
Around 7:50 a.m. EDT, gold for December delivery was $2.40, or 0.2%, higher at $1,237.50 an ounce on the Comex division of the New York Mercantile Exchange. Spot metal was up $4.60 to $1,236.85 an ounce. December silver was up 9.5 cents, or 0.5%, to $18.715. The London a.m. gold fixing was $1,238.75, up from the Monday afternoon fixing of $1,234.25………………………………………Full Article: Source

Oil Prices Fall as China Data Fuel Demand Concerns

Posted on 16 September 2014 by VRS  |  Email |Print

Global oil prices deepened their slide Monday after weak industrial and retail data from China raised concerns about demand for crude. The global Brent crude contract on the ICE Futures Europe exchange fell 46 cents, or 0.5%, to $96.65 a barrel, the lowest settlement since June 28, 2012. Brent is down 17% from the 2014 high reached in mid-June. The October Brent contract expired with the close of trading Monday.
Analysts cited disappointing data from China in oil’s selloff on Monday, with industrial production in the world’s second-largest oil consumer slowing to the lowest rate since 2008 and new-car sales also decelerating………………………………………..Full Article: Source

Gold prices to remain under pressure next year too

Posted on 16 September 2014 by VRS  |  Email |Print

Gold prices in the global market are likely to remain under pressure and rule below $1,200 an ounce next year, a global convention was told. “We expect gold prices to remain low next year too. Once gold slips below $1,200, it could head towards $1,175. The positive thing about the fall is that physical buying could emerge once prices drop to $1,200 levels,” said Cameron Alexander, Manager, Precious Metals, Thomson Reuters GFMS, at a price outlook session at the 11th India International Gold Convention – 2014.
However, prices could look up later this year and could even rise to $1,300 levels. This will be because there could be some buying in China and India, particularly during festival and marriage season. “I think the Chinese government will encourage its people to buy gold but it could ensure that prices are under control,” he said. The outlook for gold is not bright next year because a surplus is seen in the yellow metal………………………………………..Full Article: Source

Why ECB QE Is Bearish For Gold Prices

Posted on 16 September 2014 by VRS  |  Email |Print

The recent action by the ECB appears to have caught many gold bulls off guard. A common interpretation of the impact that a potential quantitative easing program would have on gold prices was that it would be very bullish. This argument was based on the concept that money printing is bullish for gold, and that QE1 and QE2 by the Fed triggered major rallies in the yellow metal.
Whilst we do not dispute that QE1 and QE2 by the Fed were indeed bullish for gold, we strongly disagreed that the ECB would introduce a program that would spark a major rally. In fact we went further, predicting that what the ECB was going to do was in fact highly bearish for gold, and in this article we will endeavour to explain why………………………………………..Full Article: Source

China alumina price rises to Yuan 2,700/mt despite lower metal prices

Posted on 16 September 2014 by VRS  |  Email |Print

The Platts ex-works Henan alumina assessment rose Yuan 60 from Friday to Yuan 2,700/mt ($439/mt) on Monday for 70:30 cash and credit payment terms on limited spot availability and in anticipation of seasonal restocking in the fourth quarter despite lower domestic metal prices, sources said.
The current price was also up Yuan 100/mt from a week earlier, and up Yuan 230/mt month on month. Offers in Henan were heard between Yuan 2,700-2,730/mt cash to partial credit terms, with buyers’ ideas pegged at Yuan 2,650-2,680/mt cash………………………………………..Full Article: Source

Copper price hits three-month low

Posted on 16 September 2014 by VRS  |  Email |Print

Copper futures have fallen to their lowest level in nearly three months as investors bet that slower economic expansion in China will weigh on demand for the industrial metal. The most actively traded contract, for December delivery, settled US2.10c, or 0.7 per cent, lower at $US3.0855 a pound on the Comex division of the New York Mercantile Exchange.
This was the lowest settlement since June 19. On Monday, investors had their first chance to react to weaker Chinese industrial production data, released over the weekend. In August, China’s value-added industrial production posted its slowest increase since December 2008, climbing just 6.9 per cent from a year earlier………………………………………..Full Article: Source

The real problem for commodity nations is currency, not prices: Russell

Posted on 16 September 2014 by VRS  |  Email |Print

The pressing problem for some resource-rich countries isn’t that prices for commodities have dropped sharply, it’s that their currencies haven’t dropped in tandem. The plight of Australia and Indonesia, the major commodity exporters in the Asia-Pacific region, is driven home by the fact that their currencies have actually gained against the U.S. dollar this year, even as commodity prices have plunged.
This is a body blow to earnings in those countries and defies both economic logic and precedent, which should have seen the Australian dollar and Indonesian rupiah start to drop as revenue from resource exports declined………………………………………..Full Article: Source

Oil price slide sets the stage for M&As

Posted on 15 September 2014 by VRS  |  Email |Print

As the oil price slides, nervous oil executives are wondering how low it can go. Brent crude hit its lowest level in two years last week, raising questions about how the industry – and the large international oil groups in particular – would cope with a sustained period of weakness.
Nick Butler of King’s College London, a former strategist for BP, noted in the Financial Times last week that he knew of at least three major oil and gas companies that had ordered “full scale strategic reviews.”……………………………………….Full Article: Source

OPEC Chief Sees Oil Price Rebounding by Year End

Posted on 15 September 2014 by VRS  |  Email |Print

OPEC’s chief said on Friday that no emergency meeting is being considered as he expects oil prices to rebound by the end of the year. The Brent oil price—the most widely used international benchmark—fell below $100 a barrel this week and remained around $98 a barrel on Friday.
But in an interview with The Wall Street Journal at the group’s headquarters in Vienna, OPEC secretary-general Abdalla Salem el-Badri said that “the price will come back.” An emergency meeting of the Organization of the Petroleum Exporting Countries “isn’t on our radar,” Mr. el-Badri said………………………………………..Full Article: Source

Current oil price level satisfies OPEC

Posted on 15 September 2014 by VRS  |  Email |Print

The current level of oil price is satisfying to the Organization of Petroleum Exporting Countries (OPEC), Parviz Mina, the international petroleum consultant says. The price of $95 to $100 per barrel satisfies the OPEC producers as well as the main crude oil buyers, Mina, who served as a member of OPEC Long-Term Strategy Committee, told Trend Sept. 12.
He went on to add that the both sides consider the current crude price as suitable and the parties do not want to make change on it. So, the OPEC countries have not decided yet to lower their export level to increase the price, he said………………………………………..Full Article: Source

Brent Crude Oil may fall to $96.75, 95 levels: Barclays|

Posted on 15 September 2014 by VRS  |  Email |Print

Brent crude oil prices fell below $100 per barrel last week and there is a likelihood of prices faling to $96.75 and $95 per barrel, Barclays Research said. The market is adjusting to a situation when there is ample light sweet oil supplies amidst a relatively softer global oil demand growth, Barclays added.
As the OPEC basket price touches $96/bbl (levels last seen in June 2012), the clarion call for balancing the market from the supply side is growing louder. The resolve from individual OPEC members, and the pace of their reaction, looks set to be tested over the coming months as they choose to collectively defend $100/bbl or individually maintain market share………………………………………..Full Article: Source

Reasons For The Recent Decline In Gold Prices

Posted on 15 September 2014 by VRS  |  Email |Print

Gold prices fell to their three-month lows in September. The London PM Fix gold price stood at $1,286.50 per ounce at the beginning of the month, with prices closing at $1,251 per ounce at the close of trading on September 10. Gold is often viewed as an inflation hedge and safe haven investment by investors.
Thus, gold prices are to a large extent influenced by a set of related factors including the macroeconomic outlook for the U.S. and world economies, the performance of alternative assets such as equities and the U.S. Dollar, the trajectory of interest rates and geopolitical uncertainty. In this context, we will look into the reasons for the recent decline in the prices of gold………………………………………..Full Article: Source

Pain for gold, silver price as hedge fund slash bullish bets

Posted on 15 September 2014 by VRS  |  Email |Print

On Friday the price of gold fell again, reaching an 8-month low after five straight days of selling on the back of negative precious metals sentiment among large investors coupled with a strong dollar. On the Comex division of the New York Mercantile Exchange in after-hours Friday trade gold for December delivery slid below $1,230 an ounce, a 2.8% retreat for the week to levels last seen early January.
After hitting a high of $1,380 in March, gold’s retreat accelerated during the third quarter with a loss of 4.5% so far in September alone. Gains since the start of the year are now less than 3%………………………………………..Full Article: Source

Commodity prices slip on waning global appetite

Posted on 12 September 2014 by VRS  |  Email |Print

Commodity prices are falling, the second time around in 2014. In the current quarter, till date, the Thomson Reuters CRB Commodity Index, a broad indicator, has declined by 7.7%. A similar indicator, the S&P GSCI Index, has fallen by 10.4%. What has contributed to this fall? Food prices are a reason. On Thursday, the UN’s Food and Agriculture Organization said its food price index fell to 196.6 points in August, a level last seen in September 2010.
The index fell by 3.6% over July. Surplus conditions in commodities such as cereals (except rice), dairy products, sugar and oils have contributed to this decline. Crude prices have seen a sharp decline in recent months, with Brent crude prices down by 12.7% in a three-month period. The Dow Jones Commodity Index–Energy has declined by 12.3% in this period. Coal prices also continue to decline, though the degree is lower as they have been falling for a much longer period………………………………………..Full Article: Source

Saudi oil minister plays down drop in oil price

Posted on 12 September 2014 by VRS  |  Email |Print

Saudi Oil Minister Ali Al Naimi on Thursday played down the drop in oil prices saying this is not the first time crude prices slumped. “Prices of oil always go up and down so I really don’t know why the big fuss about it this time,” Al Naimi told reporters ahead of a regular meeting for oil ministers of the Gulf Cooperation Council (GCC) states in Kuwait City.
The Saudi minister, whose country pumps over 9.5 million barrels per day, said any measures the Organisation of Petroleum Exporting Countries (Opec) needs to take regarding the price slump “should be discussed when Opec meets” in November………………………………………..Full Article: Source

Saudi Arabia can cope with $85 Oil and create global demand

Posted on 12 September 2014 by VRS  |  Email |Print

Traditionally, lowering prices of Crude oil lead to a supply response from major OPEC producer, Saudi Arabia. However, this time around, it hasn’t done so but raised production since June.
With an annual budget of $230 bn and a running surplus of $ 40 bn, Saudi Arabia can easily cope with $85 bn Crude Oil for years, according to an assessment by Bank of America-Merrill Lynch (BofAML). However, the strategy carries risks including a ramp up in global demand and further turmoil in oil producing countries as prices decline………………………………………..Full Article: Source

Sub-$100 Oil Is Just A Price, Not A Signpost

Posted on 12 September 2014 by VRS  |  Email |Print

The fall in Brent prices below $100 for the first time in months is, to some, a startling development, especially given the insistence in some quarters that $150 is the next ‘target’ as economic recovery increases demand and shale oil production shows signs of weakness.
Needless to say, predicting short-term oil prices will make you very humble (well, at least a little humble) and given the fluctuations from $10 to $137 in the past decade and a half, it is hard to argue that there is a price level that is not possible to reach. However, $150 seems close to impossible without another major supply disruption. As Damon Runyon said, “…but not the way to bet.”……………………………………….Full Article: Source

Gold Prices To Hit $5,000 Within The Next 3 To 4 Years

Posted on 12 September 2014 by VRS  |  Email |Print

In April 2010 I made a somewhat controversial prediction that gold would reach $5,000 an ounce. I still believe this to be a realistic price target – and now prominent gold mining experts are following suit. Rob McEwen is more than qualified in the realm of gold mining – he’s the founder and former chairman and chief executive officer of GoldCorp Inc.(NYSE: GG), a $20 billion Canadian gold miner and the world’s largest by market cap.
And in an interview on CNBC‘s “Fast Money” in August, McEwen said “I’m a long-term believer in gold and I see it ultimately getting to $5,000 an ounce. Anything short of that, I wouldn’t be hedging.”……………………………………….Full Article: Source

Global Food prices continue to delcine on good weather, harvests

Posted on 12 September 2014 by VRS  |  Email |Print

FAO’s monthly food price index registered another drop in August, continuing a 5-month downward run and reaching its lowest level since September 2010. The index’s August average of 196.6 points represents a decrease of 7.3 points (3.6 percent) from July. With the exception of meat, prices for all of the commodities measured by the index dipped markedly.
Dairy led the pack, with FAO’s sub-index for dairy products averaging 200.8 points in August, down 25.3 points (11.2 percent) versus July and 46.8 points (18.9 percent) compared to a year ago — the result of abundant supplies for export coupled with reduced import demand………………………………………..Full Article: Source

Saudi Arabia slashes oil output to defend $100 price

Posted on 11 September 2014 by VRS  |  Email |Print

World’s biggest exporter of oil reacts to slide in prices by trimming 400,000 barrels per day of output in August. Saudi Arabia, the world’s biggest oil exporter, has slashed its production of crude in an apparent attempt to prevent the price falling further below $100 per barrel.
The kingdom, which has the capacity to pump 12.5m barrels per day (bpd) of crude at full choke, trimmed 400,000 bpd from its output last month as prices began to weaken, according to a monthly market report issued by the Organisation of Petroleum Exporting Countries (Opec). That is equal to about half the UK’s total oil output at present levels………………………………………..Full Article: Source

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