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Oil prices not going up soon: IEA director

Posted on 19 December 2014 by VRS  |  Email |Print

The International Energy Agency does not see oil prices bouncing back to a higher level very soon, the organization’s executive director said. The IEA cut its forecast for oil demand in 2015 to 93.3 million barrels per day last week, shaving 230,000 bpd of growth from an earlier projection.
The organization sees demand growth slowing next year in the former Soviet Union area, China and a number of oil-producing nations, said the IEA’s Maria van der Hoeven. At the same time, the organization believes the market is “well supplied,” she said………………………………………..Full Article: Source

Oil price fall is temporary, says Saudi minister

Posted on 19 December 2014 by VRS  |  Email |Print

Recent falls in the price of oil are likely to be temporary, says the oil minister for Saudi Arabia, Opec’s biggest producing nation. Ali al-Naimi said commodity price fluctuations were to be expected and said he was hopeful for the future.
He added it was “difficult, or even impossible, for Saudi Arabia or Opec to undertake any measure that would lead to a reduction in [their] share of the market and an increase in of others”. The price of oil has halved since June. On Thursday, the price of Brent crude was just below $63 a barrel, while US crude was near $58………………………………………..Full Article: Source

Oil Price Forecast: 2015-2016

Posted on 19 December 2014 by VRS  |  Email |Print

The sharp drop in oil prices in the past few weeks confirms the oil price forecast that I published back in May 2013, when West Texas crude sold for $94.50: “Oil prices are headed down, and I mean down at least $20 a barrel. The key reason is that prices have been high. It’s not a paradox, but a result of the long time lags in oil production.”
Before going into the forecast, it’s worth mentioning that price can change faster than the fundamentals of supply and demand. In a recent 30-day period the price of oil fell by 20 percent. There was no change in the demand or supply over that month to justify such a large change. ……………………………………….Full Article: Source

Gold to average $1,145/oz in 2015, platinum the favoured trade

Posted on 19 December 2014 by VRS  |  Email |Print

The gold price still has room to drop further given continued strength in the dollar and the possibility that the Federal Reserve will raise interest rates some time in 2015, Natixis said. Platinum is the more favourable trade next year, it said in a research note on Thursday.
“The strengthening dollar will continue pushing gold prices down. As the dollar strengthens so the need for gold as a safe haven ‘in times of crisis’ dissipates,” Natixis said. “Moreover, the yen and euro are expected to weaken on the back of expanding central bank balance sheets.” ……………………………………….Full Article: Source

Credit Suisse cuts 2015 gold price, bullish on zinc

Posted on 19 December 2014 by VRS  |  Email |Print

“Gold prices we see as stabilized at current levels,” said the Credit Suisse Global Metals & Mining Team, “we now expect a $1,100-$1,300/oz trading range, we reduce our gold price forecast for 2015 to $1,225/oz and our long term price from $1,250/oz from $1,300/oz.”
“We see gold price supported at the $1,200/oz level by a lower mine supply and continued global physical investment demand,” the analysts advised. However, they observed, “We see potentially bearish factors for the gold market including the bullish consensus USD outlook and market expectations for higher rates in balance with more bullish fundamental factors that drove gold from 2002-2008; shrinking mine supply, central bank buying and Asian demand.”……………………………………….Full Article: Source

Oil price shockwave ripples across world markets

Posted on 18 December 2014 by VRS  |  Email |Print

The financial turmoil engulfing Russia is a symptom of a wider world markets earthquake that has its epicenter in oil’s collapse and Western disinflation but is now rippling far and wide across investors’ portfolios.
Not unlike other bouts of global financial contagion in the late 1990s and again in 2008-09, the growing interdependency of world finance means seismic activity in one area can often lead to a chain reaction of seemingly random events…………………………………….Full Article: Source

Oil price shockwave ripples across world markets

Posted on 18 December 2014 by VRS  |  Email |Print

The financial turmoil engulfing Russia is a symptom of a wider world markets earthquake that has its epicenter in oil’s collapse and Western disinflation but is now rippling far and wide across investors’ portfolios.
Not unlike other bouts of global financial contagion in the late 1990s and again in 2008-09, the growing interdependency of world finance means seismic activity in one area can often lead to a chain reaction of seemingly random events…………………………………….Full Article: Source

Gold Declines to Two-Week Low on Outlook for U.S. Interest Rates

Posted on 18 December 2014 by VRS  |  Email |Print

Gold prices fell to a two-week low on concern that the Federal Reserve is moving closer to raising U.S. interest rates, reducing the precious metal’s appeal as a store of value.
Fed officials dropped a pledge to keep borrowing costs near zero percent for a “considerable time,” replacing it with a promise to be “patient,” according to a statement at the conclusion of a two-day meeting. Last month, gold touched a four-year low as the dollar extended a rally to a five-year high, eroding the investment appeal of gold…………………………………….Full Article: Source

Gold price to see better base in 2015 - ANZ Bank

Posted on 18 December 2014 by VRS  |  Email |Print

The gold price is likely to see a stronger potential for recovery in 2015 despite the prospect of rising US rates, a report from ANZ Bank forecasts. The bank forecasts gold price to average $1,238 per ounce next year, about 3.5 percent higher than the current spot gold price at $1,197 per ounce.
Continuing recovery in Chinese physical gold demand will help to sustain higher gold prices, given that subdued import levels during the second half of 2014 likely indicates a run-down of stocks from previous years. “The pullback in demand over the past three quarters should put demand on a better footing through 2015,” said ANZ Bank’s analyst Vicor Thianpiriya…………………………………….Full Article: Source

World Copper Price Continues Fall

Posted on 18 December 2014 by VRS  |  Email |Print

International copper price continued fall and aluminum price touched two-month low on December 1 due to weak manufacturing data of China , the world largest metal consumer, and further decline of oil price.
Dragged by new order and price index decrease, the HSBC China Manufacturing PMI dropped to lower than 50 in December, which was the first time the index dropped to lower than 50 in seven months. Three-month aluminum closed down 0.81% at USD 1,906.50 per ton at the LME; it touched USD 1,900.75 earlier, a two-month low…………………………………….Full Article: Source

Iron ore hits new low after weakest China imports in 16 years

Posted on 18 December 2014 by VRS  |  Email |Print

The iron ore price reached a fresh five-and-half-year low on Wednesday after surprisingly weak imports by top consumer China. The CFR 62% Fe 2% Al benchmark import price at the port of Qingdao tracked by The SteelIndex declined 20c to $69.10 a tonne, the lowest since June 1, 2009.
The price of the steelmaking raw material is down just under 50% since the start of the year. Fears of a deteriorating outlook for China, buyer of nearly 70% of the world’s seaborne cargoes, intensified after customs data showed a 15% plunge in November iron ore imports to 67.4 million tonnes…………………………………….Full Article: Source

Fitch: Falling Commodities Prices Hit Australia’s Fiscal Outlook

Posted on 17 December 2014 by VRS  |  Email |Print

Australia’s fiscal outlook has weakened due to lack of support for spending cuts in the Senate and a sharp decline in key commodities prices that eroded the country’s terms of trade in 2H14, says Fitch Ratings. Further deterioration in commodities prices or continued objections to spending cuts in the Senate would pose risks to the fiscal outlook.
But Australia is still well positioned relative to other ‘AAA’ rated sovereigns due to its low general government debt ratio and government commitment to fiscal consolidation. The Treasury’s Mid-Year Economic and Fiscal Outlook (MYEFO), published on 15 December, identified two key factors behind the deterioration in the Australian fiscal position since the release of the 2014-2015 budget in May……………………………………..Full Article: Source

Brent oil price falls below $60 a barrel

Posted on 17 December 2014 by VRS  |  Email |Print

Oil’s fall below $60 a barrel to five and a half year lows gathered pace on Tuesday after data showed Chinese factory activity had weakened. ICE January Brent — the international oil benchmark — dropped $1.45 to $59.61 a barrel in afternoon trading, after falling as low as $58.50 a barrel. This is almost half the level it reached in mid-June.
China’s manufacturing sector shrank for the first time in seven months in December, according to figures released on Tuesday, adding to a series of data releases pointing to slowing economic growth in the world’s largest oil importer……………………………………..Full Article: Source

Ticking time bombs: Where oil’s fall is dangerous

Posted on 17 December 2014 by VRS  |  Email |Print

Lower oil prices are good for some countries, and bad for others. But there are a handful of oil-dependent economies where things could get especially ugly. Crude prices were lower Tuesday after OPEC repeated its refusal on Monday to cut oil output despite fears of a looming glut and a UAE official rebuffed calls for an emergency meeting to fix prices.
The recent stance marks an about-face from the cartel’s decades-old policy of tightening supplies in order to support prices. Since peaking at just over $100 a barrel this summer, prices have fallen by more than 40 percent, including a slide last week that wiped out about $8, or more than 10 percent……………………………………..Full Article: Source

Oil’s Price Decline Weighs On High Yield Debt

Posted on 17 December 2014 by VRS  |  Email |Print

The price of oil has been falling since June but the pace of oil’s price decline has accelerated since about mid-November. You may have noticed cheaper gasoline prices at your local gas station as a result. From this standpoint the falling price of oil is a good thing.
On the other hand the falling price of oil has been putting downward market pressure on high yield bonds. But what does the falling price of oil have to do with high yield bonds? It turns out–a great deal. High yield bond portfolios contain many debt issues of U.S. energy companies……………………………………..Full Article: Source

OPEC will not step in to support oil prices: Kuwait

Posted on 17 December 2014 by VRS  |  Email |Print

OPEC has no plans to intervene in the oil market to shore up sagging crude prices, the Kuwaiti oil minister said Tuesday, as Brent crude breached the $60 mark. “At OPEC’s meeting in November, we took two decisions,” Ali al-Omair said at a lecture in Kuwait City.
“The first was to keep the production ceiling unchanged and the second to hold the next meeting in June. So far, nothing has changed and there are no calls for holding an emergency meeting,” Omair said. He declined to answer a question on what price would force the Organisation of Petroleum Exporting Countries to step in to bolster the market……………………………………..Full Article: Source

Oil price: Opec ‘will let oil price fall below $40′

Posted on 16 December 2014 by VRS  |  Email |Print

The most powerful nations in Opec are willing to push prices as low as $40 a barrel in their bid to take on Russia and US shale, according to a high-profile Gulf oil minister.
Suhail al-Mazrouei, energy minister of the United Arab Emirates, said that the organisation will let prices fall by more than $20 per barrel before they consider an emergency meeting to cut production. “We are not going to change our minds because the prices went to $60, or to $40,” he said………………………………………Full Article: Source

Opec boss: Oil price drop will not prompt supply cut

Posted on 16 December 2014 by VRS  |  Email |Print

The head of Opec has reiterated that it will not try to shore up plunging oil prices by reducing production. “The decision has been made. Things will be left as is,” said Abdallah Salem el-Badri, secretary general of the oil producers’ cartel, speaking in Dubai. On Friday Brent crude dropped below $62 a barrel, its lowest price since 2009.
“The fundamentals should not lead to this dramatic reduction [in price],” Mr el-Badri added. Mr el-Badri said Opec was “assessing the situation to determine what the real reasons behind the decrease in oil prices are”. The comments are Mr el-Badri’s first since Opec’s meeting in Vienna last month, where it decided to leave production levels unchanged………………………………………Full Article: Source

Falling oil price poses new threat to banks

Posted on 16 December 2014 by VRS  |  Email |Print

The world’s big banks would like to draw a line under their recent troubles. The losses from the financial crisis, the costs of regulatory change and the fines from mis-selling and market manipulation scandals appear largely in the past.
For once, another sector is suffering a series of blows. Within a matter of months, the falling oil price has wiped as much as 25 per cent off the market values of the oil majors. But might the bankers be smiling too soon? Could the oil market turmoil become the banks’ next nightmare?……………………………………..Full Article: Source

Predicting The Oil Price: Smart Vs Lucky

Posted on 16 December 2014 by VRS  |  Email |Print

Paul Krugman made the point recently that the only stock market forecasters who correctly predicted a market drop were those who always predicted falling markets. This is known as the ‘stopped watch’ approach to forecasting: constantly make one prediction and eventually the market will move in that direction.
Especially for oil prices, which are highly variable, this works wonders to the point where the great Adam Sieminski often joked that you should predict the price or the date, but not both………………………………………Full Article: Source

Gold price sinks below $1,200

Posted on 16 December 2014 by VRS  |  Email |Print

A stronger dollar and fresh five-year lows for oil saw bears return to the gold market on Monday with the metal sinking through the psychologically important $1,200 an ounce level in relatively quiet trade.
On the Comex division of the New York Mercantile Exchange gold for February delivery was changing hands for $1,193.30 an ounce in afternoon trade, down $29.20 or 2.4% from Friday’s close and near the bottom of its trading range. The oil price, which usually move in tandem with gold, tanked again on Monday to trade at $55.28 a barrel on Thursday, hitting the lowest level since May 2009………………………………………Full Article: Source

Silver Price Bottom?

Posted on 16 December 2014 by VRS  |  Email |Print

Silver broke out of its 5-month downtrend last week as expected, but, as with gold, the move was unfortunately not confirmed by action in stocks, which have continued to drift lower. When this fact is combined with the ramping of Commercial short and Large Spec long positions over the past couple of weeks, it starts to look like this breakout was false. Certainly a reaction is looking a lot more likely now.
On its 6-month chart we can see the breakout move last Tuesday, and how there has been no follow through, increasing the risk of it turning lower again. However, the high volume bull hammer at the start of the month continues to have bullish implications, so what may happen here is that silver backs off to do more base building work before a sustained advance can get underway………………………………………Full Article: Source

What’s the Metals Price Forecast for 2015?

Posted on 16 December 2014 by VRS  |  Email |Print

That’s what everyone always wants to know. But no one will ever find out. Let’s say a patient who smokes a pack of cigarettes a day enters a medical office and asks the doctor, “When will I get cancer?” The doctor’s response is likely to include recommendations to schedule regular office visits and to alter the patient’s habits – because, of course, the answer to the patient’s question is simply unknowable.
In that vein, if you’re about to download our latest report – “2015 Metal Buying Outlook” – in the hopes of gaining an exact price forecast for the metals you buy 6 months or even 1 year from now, you may be disappointed. However, what we can give you is even more valuable………………………………………Full Article: Source

Commodity Prices in 2014: What’s Behind the Plunge? Hint: It’s Not Just Oil

Posted on 15 December 2014 by VRS  |  Email |Print

Stock market investors have enjoyed a huge bull market ever since the end of the financial crisis, and it appears that stocks will once again post a winning year when 2014 comes to a close in a few weeks. For the commodities markets, however, it’s been a much different story, with commodity prices in 2014 on track to suffer their worst loss since 2008.
As much attention as crude oil has gotten lately, it’s far from the only commodity weighing on the overall market for physical goods. Let’s take a closer look at exactly what’s been driving the declines in commodity prices in 2014 and whether they’re likely to continue falling next year………………………………………..Full Article: Source

OPEC’s Badri says oil price drop beyond market fundamentals

Posted on 15 December 2014 by VRS  |  Email |Print

The secretary-general of the Organization of the Petroleum Exporting Countries (OPEC) said on Sunday the price of oil had fallen further than market fundamentals would have dictated.
Speaking at an event in Dubai, Abdullah al-Badri added that the November meeting which ruled out a cut in production by members of the group was not aimed at anyone specific………………………………………..Full Article: Source

Opec willing to push oil price to $40 says Gulf oil minister

Posted on 15 December 2014 by VRS  |  Email |Print

Senior Opec ministers says cartel has no fear of oil prices falling to levels as low as $40 per barrel amid price war with Russia and US shale. Opec’s most influential producers are willing to allow oil prices to fall to $40 per barrel before discussing whether the cartel should hold an emergency meeting to discuss cutting output.
According to Suhail al-Mazrouei, energy minister of the United Arab Emirates and a high profile delegate of the cartel: “We are not going to change our minds because the prices went to $60, or to $40.”……………………………………….Full Article: Source

U.A.E. Sees OPEC Output Unchanged Even If Oil Price Drops to $40

Posted on 15 December 2014 by VRS  |  Email |Print

OPEC will stand by its decision not to cut output even if oil prices fall as low as $40 a barrel and will wait at least three months before considering an emergency meeting, the United Arab Emirates’ energy minister said.
OPEC won’t immediately change its Nov. 27 decision to keep the group’s collective output target unchanged at 30 million barrels a day, Suhail Al-Mazrouei said. Venezuela supports an OPEC meeting given the price slide, though the country hasn’t officially requested one, an official at Venezuela’s foreign ministry said Dec. 12. The group is due to meet again on June 5………………………………………..Full Article: Source

Market fundamentals don’t justify oil price freefall: OPEC

Posted on 15 December 2014 by VRS  |  Email |Print

The rise in oil supplies on global markets does not justify the sharp drop in crude prices, a top OPEC official said Sunday, arguing speculation might be a contributor. “We want to know the main reasons that have led to such a drop in oil prices,” said Abdalla Salem el-Badri, secretary general of the Organization of the Petroleum Exporting Countries.
“When we look at supply and demand, there is a rise (in supply) but only a modest one that should not have led to this 50-percent drop,” he told reporters at a conference in Dubai. “Speculation is strongly contributing to pushing prices down,” he added………………………………………..Full Article: Source

Price of Gold in 2014: Why It’s Gone Nowhere

Posted on 15 December 2014 by VRS  |  Email |Print

From 2001 to 2012, gold enjoyed 12 straight years of consecutive rising prices, and many investors hoped that the yellow metal would be able to sustain its bull market well into the future. Yet 2013’s $475 per ounce plunge in gold prices dashed those hopes, and this year’s failure for gold to regain any of that lost ground suggests that investors could have to wait a long time before prices start moving upward again.
Looking at how the price of gold in 2014 moved shows the crosscurrents that plagued investors throughout the year, as bouts of optimism gave way to the harsh realities of the mining industry and the supply and demand picture for gold………………………………………..Full Article: Source

Australia Sees Iron-Ore at $60 as Commodities Hit Budget

Posted on 15 December 2014 by VRS  |  Email |Print

Australia estimates iron ore will trade at about $60 a metric ton as the biggest slump in the nation’s terms of trade since records began more than 50 years ago deepens the budget deficit.
The price of the material used to make steel has almost halved this year and slumped to a five-year low of $68.49 a ton last month, according to data compiled by Metal Bulletin Ltd. That compares with a $92 projection in the budget, Treasurer Joe Hockey said………………………………………..Full Article: Source

Is the commodity crash,volatility in equities a danger sign for global economy?

Posted on 12 December 2014 by VRS  |  Email |Print

Energy prices have crashed to the lowest level in five years, so are metals and agri-commodities while volatility in equities have increased raising concerns about global economic growth. In a linear way, it is always easy to say that lower commodity prices signal the strengthening of recessionary trends or absence or recovery signals in the economy.
If that were so, every region should have the same economic growth but in reality Eurozone remains weak while US is on the edge of recovery with markets eagerly awaiting the likelihood of an interest rate hike. Asian giants China and India may have slowed down a bit but still not out of the reckoning.The market is awaiting the European Central Bank (ECB) monthly report in a short while from now………………………………………..Full Article: Source

US oil price below $60 a barrel

Posted on 12 December 2014 by VRS  |  Email |Print

US crude closed below $60 a barrel for the first time in five and-a-half years, sliding amid new concerns consumption will lag far behind surging output. Ian Taylor, chief executive of Vitol, the world’s largest independent oil trading house, said on Thursday that official estimates on consumption had been overshooting actual demand and suggested the cheapest oil since 2009 could linger.
“Over the last few months it’s become increasingly clear that demand predictions have been and continue to be consistently on the high side,” he told the Platts Global Energy Outlook Forum in New York………………………………………..Full Article: Source

$60 oil will be norm for next 5 years: Economist

Posted on 12 December 2014 by VRS  |  Email |Print

Oil prices will stay around $60 a barrel for the next five years as China’s economy cools down, economist Andy Xie told CNBC on Thursday. Oil prices had risen so high because of China’s boom, the former Morgan Stanley and IMF senior economist said in a “Squawk Box” interview.
China is now transitioning from a 15-year super cycle that built up a massive industrial machine, and the economy must cool down to digest overinvestment, which will drag down commodity prices, he said. “When China goes into normal situation, I think that the oil price will become normal, too, so $60 would be the normal price for the next five years or so,” he said………………………………………..Full Article: Source

Opec veteran says oil price a ‘disaster’ and cartel powerless

Posted on 12 December 2014 by VRS  |  Email |Print

Opec is now “powerless” on its own to prevent oil prices falling further because of a 2m barrels per day (bpd) surplus of supply in the market and the cartel should seek a deal with Russia, Norway and Mexico to arrest the decline, according to a senior Gulf official.
Speaking exclusively to the Telegraph, Abdullah bin Hamad al-Attiyah, a senior adviser to the Emir of Qatar and a former president of the Organisation of Petroleum Exporting countries (Opec) said: “Opec can’t solve this problem alone like before, now it’s a different story. Russia, Norway and Mexico all must sit down with Opec to discuss making cuts.”……………………………………….Full Article: Source

Gold Prices Manipulated for Past Two Years?

Posted on 12 December 2014 by VRS  |  Email |Print

Since the beginning of 2013, gold’s price action has been irrational. The fundamentals are getting better for gold in respect to demand and supply, but we see sudden, wild swings, often to the downside, on no news and for no apparent reason.
Those who closely follow precious metal prices will agree with me on this: many times in 2014, it was common to wake up in the morning to new gold prices that are sharply down. When you look into the price action, you find a mysterious seller. He sells a significant amount of gold contracts on the paper market at times when not many participants are around to buy…so prices plunge………………………………………..Full Article: Source

Oil Price Hit by OPEC Numbers as Saudis Stand Firm on Output

Posted on 11 December 2014 by VRS  |  Email |Print

Crude took a fresh drubbing yesterday as OPEC reduced its estimate for 2015 demand, Kuwait offered new discounts to Asian customers and the Saudi oil minister questioned the need for an output cut.
“Why should I cut production?” Ali Al-Naimi, Saudi Arabia’s oil minister, said in response to reporters’ questions yesterday in Lima, where he’s attending United Nations climate talks. “This is a market and I’m selling in a market. Why should I cut?”……………………………………….Full Article: Source

Oil price falls below $65 for first time in 5 years

Posted on 11 December 2014 by VRS  |  Email |Print

The price of internationally traded oil fell below $65 for the first time in more than five years on Wednesday after Opec lowered forecasts of demand for its crude to their lowest level in a decade.
The report by Opec, the producers’ cartel, underlined the looming supply glut facing oil markets amid surging US shale output and weakening global demand, raising hopes of a boost for consumers but piling further pressure on to oil companies………………………………………..Full Article: Source

Oil price fall a ‘golden’ chance to shift to clean energy: IEA

Posted on 11 December 2014 by VRS  |  Email |Print

World leaders have a “golden opportunity” with plunging oil prices to put a price on carbon emissions since cheaper fuel makes the move less risky politically, the International Energy Agency (IEA) said on Tuesday.
Crude prices have dropped about 40 percent since June to their lowest levels since 2010 and the IEA is concerned that the fall could threaten a transition to renewable energy, Maria van der Hoeven, the IEA’s executive director, said on the sidelines of the Lima climate summit………………………………………..Full Article: Source

Gold eyes $1,260/oz target after near-$40 rally

Posted on 11 December 2014 by VRS  |  Email |Print

The gold price remained well supported in the US on Wednesday, with the long-neglected bulls hoping a pullback in the dollar will be the catalyst for another leg higher. Gold for February delivery on the Comex division of the New York Mercantile Exchange was last up 60 cents at $1,232.60 per ounce, building on Tuesday’s $37.10 of gains.
“Gold rallied yesterday, helped by several factors: short-covering; the dollar came off the highs; equities edged lower; and headlines suggested that there might be further changes to India’s gold import rules,” UBS’ Edel Tully said, adding that the increase caught many market participants on the wrong foot, which further amplified the move………………………………………..Full Article: Source

Roubini Global Predicts Sub-$60 Iron Ore Amid Massive Surplus

Posted on 11 December 2014 by VRS  |  Email |Print

Iron ore may drop to less than $60 a metric ton next year as the largest mining companies press on with raising supply, deepening a glut just as demand growth in China falters, according to Roubini Global Economics LLC.
The commodity will average $65 a ton in 2015, with weaker prices in the first half before a recovery as some higher-cost capacity is closed, Director of Commodities Helen Henton said in an interview. While producers won’t fare well in an environment of falling prices, it does make sense for low-cost suppliers to keep expanding in the expectation that less-competitive mines will be shuttered, she said………………………………………..Full Article: Source

Bank of America sees $50 oil as Opec dies

Posted on 10 December 2014 by VRS  |  Email |Print

“Our biggest worry is the end of the liquidity cycle. The Fed is done. The reach for yield that we have seen since 2009 is going into reverse”, said Bank of America. The Opec oil cartel no longer exists in any meaningful sense and crude prices will slump to $50 a barrel over coming months as market forces shake out the weakest producers, Bank of America has warned.
Revolutionary changes sweeping the world’s energy industry will drive down the price of liquefied natural gas (LNG), creating a “multi-year” glut and a mucher cheaper source of gas for Europe………………………………………..Full Article: Source

Oil price hits a five-year low: What does this mean for markets?

Posted on 10 December 2014 by VRS  |  Email |Print

Equities could see a lift, but it’s bad news for oil exporters. Looking ahead to 2015, there’s plenty for markets to fret about. Rate hikes in the UK and US are a near certainty – after years of extraordinary monetary stimulus that propped up asset prices and kept sovereign bond yields low – as are continued worries over the fallout from an economic slowdown and possible “hard landing” in China.
The Bank for International Settlements, meanwhile, known as the central bankers’ bank, yesterday issued a warning over the “growing fragility” of global markets, especially as an increasingly strong dollar makes dollar-denominated loans in emerging markets more expensive to repay………………………………………..Full Article: Source

For Saudi Arabia, plunging oil prices are a political weapon

Posted on 10 December 2014 by VRS  |  Email |Print

As the price of oil plummets to a five-year low, Saudi Arabia – owner of the world’s largest proven crude reserves – is behaving with almost preternatural calm. So much so that Prince Alwaleed bin Talal Al Saud, the kingdom’s highest-profile investor, a few weeks ago professed himself astonished by official complacency in the face of this “catastrophe” – and that was when the price was still above $90 a barrel.
Now, there are doubtless technical reasons why the Saudis remain sanguine as the price dips well below $70, and the kingdom’s oil technocracy has been prodigal in providing them. This is no different, they say, from any other commodities cycle, in which the market sets prices………………………………………..Full Article: Source

Kuwait Sees Oil Stuck at $65 for Six Months Until OPEC Moves

Posted on 10 December 2014 by VRS  |  Email |Print

Oil prices will stay at about $65 a barrel for at least half a year until OPEC changes its collective production or world economic growth revives, said the head of state-run Kuwait Petroleum Corp.
Oil is trading in a bear market as the U.S. pumps at the fastest rate in more than three decades and demand expands more slowly. OPEC decided on Nov. 27 to maintain its output target, prompting a drop in European benchmark Brent crude to less than $70 a barrel for the first time since May 2010………………………………………..Full Article: Source

Gold price to average $1,225/oz in 2015, silver $18.88 – BoA ML

Posted on 10 December 2014 by VRS  |  Email |Print

Gold will average $1,225 per ounce in 2015, Bank of America Merrill Lynch predicted, although it could trade as low as $1,100 at some stage. Gold faces many challenges at present, with dynamics in rates, equities and the dollar all bearish factors, the bank said in a note on Tuesday.
“The macro headwinds are exacerbated by developments on the physical market, with China for instance purchasing fewer ounces than last year, when substantial pent-up demand was released during the sharp price correction,” it said. From a supply and demand perspective, prices will continue to be well supported around $1,200, particularly given current levels of jewellery demand. But this implies that a meaningful pick-up of investor sales is necessary to push prices down to $1,000, it added. ……………………………………….Full Article: Source

US Banks Reprimanded for Influencing Commodities Prices

Posted on 09 December 2014 by VRS  |  Email |Print

A two-year probe conducted by Republican and Democrat lawmakers from the Senate Permanent Subcommittee on Investigations has found several US banks culpable of major violations in the commodities markets. The report determined that some of the biggest banks, including Morgan Stanley, Goldman Sachs and J.P. Morgan Chase & Company stockpiled massive volumes of inventory in commodities like copper and aluminum.
Beyond stockpiling inventories, these banks gained significant advantage over the financial system by participating in coal production, uranium and other volatile businesses. By participating in these activities, the banks jeopardized the entire financial system………………………………………..Full Article: Source

Will Oil Prices Recover In 2015?

Posted on 09 December 2014 by VRS  |  Email |Print

There seems to be a fair amount of consensus that oil prices will recover to $100 or thereabouts by 2020 (excluding your humble narrator), but next year is much more uncertain. Some pundits, like T. Boone Pickens, believe that it is all but certain that low prices now will lead to higher prices in the near future, as upstream investment falls and shale oil production especially experiences slower growth.
Additionally, lower oil prices should provide some impetus to the global economy, raising demand if only slightly. But I have to believe that these pundits are exaggerating the likelihood that prices will “recover”………………………………………..Full Article: Source

Oil Price Winners and Losers Around the Globe

Posted on 09 December 2014 by VRS  |  Email |Print

As the world’s top policy makers rewrite their forecasts for global growth on oil’s price-plunge, who are the biggest winners and losers? The Republic of Congo, Equatorial Guinea, and Angola–three West African nations that rely on oil to fund the lion’s share of their economy and state revenues–will likely be hit the hardest.
The near-$40 a barrel fall in crude prices represents billions of dollars in lost revenue equivalent to roughly 20% of their gross domestic product. For Djibouti, Seychelles and Kyrgyzstan, whose net oil imports take a huge chunk out of their economies, the decline in prices is a boon worth up to 11% of their GDP, allowing consumers to spend on goods and services that can fuel economic growth………………………………………..Full Article: Source

Oil Slumps to Five-Year Low Amid Concern Funds May Start Selling

Posted on 09 December 2014 by VRS  |  Email |Print

Brent crude slumped to a five-year low amid concern that hedge funds and other money managers bet too much on rising prices. West Texas Intermediate also fell.
Futures dropped as much as 3.3 percent in London and 2.6 percent in New York. Net-long positions on Brent rose to the highest in four months in the week to Dec. 2, according to data from the ICE Futures Europe exchange, while bullish bets on WTI climbed the most in 20 months. Brent declined 9.9 percent in the period while WTI slumped 9.7 percent………………………………………..Full Article: Source

Gold Prices Rise As Market Eyes Easing Efforts

Posted on 09 December 2014 by VRS  |  Email |Print

Gold futures rose for the first time in three days as signs that money supplies will increase in Europe and Asia revived investor demand. Holdings in the SPDR Gold Trust, the biggest exchange-traded fund backed by the metal, climbed 0.5% last week, the most since August. Money managers raised their bullish wagers for a third straight week, the longest expansion since July, government data showed Dec. 5.
While European Central Bank policy makers refrained from increasing asset purchases at a meeting last week, President Mario Draghi pledged to assess the need for more stimulus early next year. China last month lowered interest rates to spur economic growth, while Japan has expanded its unprecedented stimulus program………………………………………..Full Article: Source

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