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Commodities Briefing - Category | Price Watch more

Why you shouldn’t get too excited over the commodity rally

Posted on 26 May 2015 by VRS  |  Email |Print

Commodity prices have been on a roll lately, but investors shouldn’t get too excited over the rally, say analysts. Although the BMO Capital Markets Commodity Price Index rose 4.6 per cent in April and BMO analysts expect another solid showing this month, they pointed out crude oil played a big part in the increase and cast doubts on further gains.
“With WTI up around 12% month-to-date in May, the index is primed for another energetic jump this month,” the analysts said. “Further out, we continue to expect a subdued recovery in commodity prices given tepid global growth and rising supply in key markets.”……………………………………….Full Article: Source

Oil prices hit struggling oil companies

Posted on 26 May 2015 by VRS  |  Email |Print

Low oil prices are endangering an increasing number of exploration and production companies. According to a new report from Moody’s Investors Service, the oil and gas industry could see the rate of defaults rise over the next year. The companies in danger of going belly up, not surprisingly, are the ones that already have low credit ratings.
Moody’s finds that the default rate for oil drillers with a credit rating of B2 or lower could jump from 2.7% to 7.4% by March 2016. Moreover, distressed oil companies make up a rising share of overall firms with a poor credit rating – roughly 14.8% of the companies with a B3 credit rating or worse covered by Moody’s are in oil and gas. That is up sharply from the 8% share that oil firms accounted for in 2014………………………………………..Full Article: Source

Oil moves further below $60 as dollar firms up

Posted on 26 May 2015 by VRS  |  Email |Print

Crude-oil futures fell in early European trade on Monday as a rising dollar put pressure on the commodity as holidays across some major markets, including the U.S., were expected to keep trading thin. On the New York Mercantile Exchange, light, sweet crude futures for delivery in July traded at $59.31 a barrel, down $0.67 in the Globex electronic session. July Brent crude on London’s ICE Futures exchange fell $0.20 to $65.17 a barrel.
The weaker trend for oil prices came as the dollar gained ground across major currencies. Worries about Greece were a part of that action. A strengthening dollar weakens the appeal of crude, which is denominated in dollars, for holders of other currencies………………………………………..Full Article: Source

Platinum price – the cheese and biscuits analogies

Posted on 26 May 2015 by VRS  |  Email |Print

Platinum has been in a large deficit for the last two to three years – and a substantial one at that, last year in particular with the five-month long platinum miners’ strike in South Africa taking perhaps a further 1 million ounces away from the production picture. But, over this same period, the price has not risen, but has fallen, thus seemingly being counter to the normal supply/demand process.
An interesting panel discussion at last week’s Bloomberg Precious Metals Forum in London did not see an immediate end to this price malaise, although looking further ahead did feel there would be a stage when fundamentals would start to impact price positively………………………………………..Full Article: Source

Eastern China steelmakers cut ferrous scrap buying prices on lower rebar prices

Posted on 26 May 2015 by VRS  |  Email |Print

Steel mills in eastern China cut ferrous scrap buying prices over the weekend, in line with declines in rebar prices. Jiangsu Shagang Group, the largest scrap user in China, on Sunday cut its buying price by Yuan 20/mt ($3/mt) in tandem with falling rebar prices, a company source said.
This was the mill’s first reduction in this month, which kept its buying prices unchanged since the last cut April 26. After the adjustment, Shagang will pay Yuan 1,450/mt ($234/mt) including 17% VAT, delivered to Zhangjiagang, Jiangsu province, for heavy melting scrap at least 6 mm thick………………………………………..Full Article: Source

Oil price slide puts producers under pressure

Posted on 25 May 2015 by VRS  |  Email |Print

The oil price plunge has triggered a string of bankruptcies, debt defaults and rescue measures to save companies nearing collapse, with almost two dozen oil and gas groups now under stress. A 40 per cent slide in Brent crude prices from a peak of $115 a barrel last June, has put smaller, cash-strapped producers in financial trouble, according to City analysts, with up to a quarter of a million barrels a day of oil supply at risk of being curtailed.
Even after a rebound in prices from January’s lows to about $66 a barrel, there have been “numerous small corporate casualties” across the globe, and especially in the US and Canada, says a report by Bernstein Research………………………………………..Full Article: Source

Goldman Sachs slashes commodities rating

Posted on 22 May 2015 by VRS  |  Email |Print

Analysts at Goldman Sachs have taken a downbeat stance on the commodities segment, downgrading the sector to underweight on a 12-month basis due to the weak outlook for oil. In a note dated May 20, the analysts said they continue “to believe that oil markets remain oversupplied and that the current price should stimulate supply from low-cost producers and put downside pressure on the oil price.”
The investment bank further cut its rating on credit in the near term to neutral and kept its 12-month underweight call. “[A] near-term risk to a constructive outlook for credit, in particular U.S. [high yield], is a weaker oil price, as credit sentiment has been closely linked to the oil price since last year,” the analysts said in the note………………………………………..Full Article: Source

Commodity price drop not over, no strong rally in oil: DBS

Posted on 22 May 2015 by VRS  |  Email |Print

A painful consolidation across commodity markets has longer to run and prices need to sink further below the cost of production to lure buyers and cut huge global stocks, an executive at DBS Group Holdings said on Thursday. DBS, Singapore’s biggest bank, stepped into commodities after the 2008/2009 financial crisis and said two years ago it aimed to double business annually.
“Production expansion from the bull era is catching up with the market and it will need some time to digest the oversupply. Prices … need to come down to the level that would shut down production and encourage more consumption,” Leong Chean Wai, DBS head of commodity derivatives, told Reuters………………………………………..Full Article: Source

OPEC Struggling To Keep Up The Pace In Oil Price War

Posted on 22 May 2015 by VRS  |  Email |Print

Some market watchers, such as Cornerstone Analytics (CA), have consistently stated that the underestimation of demand, coupled with over-estimation of supply, will mask the growing call on OPEC oil in the second half of this year. CA recently noted that global demand outstripped supply by some 4 million barrels in April .
This comes in addition to the mounting evidence that the oil market, via rig count declines, slowing production growth, higher demand and huge API crude inventory declines, is starting to readjust. Be that as it may, Goldman Sachs (GS) seems to believe oil must fall to $45 by October (like it previously thought $30 oil was a certainty) to clear the market and rebalance, despite signs that a readjustment is already underway………………………………………..Full Article: Source

Prolonged drop in oil price reshaping the oil and gas sector

Posted on 22 May 2015 by VRS  |  Email |Print

A new report from leading business and financial advisor Grant Thornton UK LLP finds that a prolonged drop in the global oil price is forcing companies in the sector to dramatically reassess and reshape their operations. Based on a survey of senior oil and gas executives, the report finds that 42% have put some plans on hold, while 11% need to raise extra finance or sell existing assets to remain operational.
Moreover, a further 11% suggest they will need to engage in significant financial restructuring before the end of the year. Asked for a prediction on oil prices by the end of the year, a divergence between existing producers and early stage companies was clear, with 63% of early stage respondents predicting the price of oil to be between $55 - $65 per barrel, as opposed to 46% of existing producers who saw the price within this range………………………………………..Full Article: Source

Gold Trading ‘Anemic’ After ‘Rejecting $1232′

Posted on 22 May 2015 by VRS  |  Email |Print

Gold Trading in London saw Dollar prices slip to 1-week lows at $1202 on Thursday, as US stock markets rose and European shares eked out a small gain following better than expected manufacturing activity data.
The US currency held little changed following Wednesday’s release of minutes from the Federal Reserve’s latest policy meeting showed little chance of the first rate-rise from 0% coming in June, as formerly hinted. Silver meantime held firmer than gold, trading above $17.15 per ounce as commodity prices more broadly rose with US Treasury bond prices………………………………………..Full Article: Source

Gold steady above $1,200 as June rate hike prospects dim

Posted on 22 May 2015 by VRS  |  Email |Print

Gold was little changed above $1,200 an ounce on Thursday, as minutes from the Federal Reserve’s policy meet showed the U.S. central bank was unlikely to hike interest rates in June, in line with market expectations.
Minutes of the Fed’s April meeting, released on Wednesday, showed policymakers believed it would be premature to hike interest rates in June, a view that is already widely held in the market following disappointing U.S. economic data. The minutes showed Fed officials pushing the prospect of a rate hike later into the year………………………………………..Full Article: Source

Oil prices gain on ‘bullish’ US petroleum report

Posted on 21 May 2015 by VRS  |  Email |Print

Oil prices rose on Wednesday after data showed a drop in US petroleum supplies and production. US benchmark West Texas Intermediate for delivery in July rose 99 cents to finish at US$58.98 a barrel on the New York Mercantile Exchange.
European benchmark Brent oil for delivery in July gained US$1.01 at US$65.03 a barrel in London. Data from the US Department of Energy showed US crude supplies fell by 2.4 million barrels in the week ending May 15, with daily production of oil dropping 112,000 barrels a day to 9.26 million barrels a day………………………………………..Full Article: Source

Gold Rises as Fed Minutes Boost Bets Rates Won’t Rise in June

Posted on 21 May 2015 by VRS  |  Email |Print

Gold prices advanced after minutes from the Federal Reserve’s last meeting showed that officials last month didn’t expect to raise rates at their next gathering in June. Many policy makers thought economic data available in June wouldn’t be robust enough to warrant tightening, according to the minutes released Wednesday of the April 28-29 session.
“People are interpreting these minutes as being more dovish than hawkish, and that is supporting gold,” Chris Gaffney, the president at EverBank World Markets in St. Louis, said in a telephone interview………………………………………..Full Article: Source

Iron ore price sheds 2.4 per cent as Vale shakes up supply

Posted on 21 May 2015 by VRS  |  Email |Print

Iron ore delivered to the Port of Qingdao has shed another 2.4 per cent as the world surveys the repercussions of Vale’s $US4 billion deal with China to pump up supply. The price of the commodity sipped $US1.41 to $US57.12 on Wednesday as it continued to give up recent gains.
The week has brought a flurry of bad news for those hoping for a sustained iron ore price recovery. On Monday, China steel prices slid to their lowest in 12 years, while on Wednesday, China and Vale unveiled a deal that will boost supply of iron ore into an already saturated market………………………………………..Full Article: Source

Oil Prices: Where Next? Here Are the Forecasts

Posted on 20 May 2015 by VRS  |  Email |Print

What’s next for oil prices? After rallying by about 40% since their lows earlier this year, forecasts now by major banks paint a mixed picture but one that increasingly looks like a W-shaped recovery. The average forecast in a MoneyBeat survey of 10 banks is for Brent, the global benchmark, to fall to an average of $63.35 a barrel in the third quarter of this year, down from around $66 on Tuesday.
West Texas Intermediate, the U.S. marker, will average $58.40 a barrel next quarter, down from about $59 a barrel on Tuesday, according to the survey. Looking beyond, the outlook gets murkier. Some, like Bank of America Merrill Lynch, see prices hovering below $60 for the rest of the year while others, like Standard Chartered, project a fast rebound to $90 a barrel by the end of the year………………………………………..Full Article: Source

Shell still optimistic about oil price: chairman

Posted on 20 May 2015 by VRS  |  Email |Print

Royal Dutch Shell PLC (RDSA) remains optimistic about the future of the oil price, despite its dramatic slump in recent months, Chairman Jorma Ollila told investors at the company’s annual general meeting Tuesday. “Volatility is a fact of life in our industry. It is what it is and we have to manage through it. Short-term movements in oil prices can be driven by perception and prices tend to overreact,” Ollila said, adding that “we have not changed our long-term planning assumptions.”
Oil prices have fallen dramatically since June as a rapid increase in U.S. shale oil production coupled with lackluster demand created a market glut. The fall in prices has hammered big oil companies’ bottom lines and left them scrambling to cut costs and reduce spending………………………………………..Full Article: Source

Oil to rebound further this year: Opec’s Kuwait official

Posted on 20 May 2015 by VRS  |  Email |Print

Oil prices could continue to rebound in the second half of 2015 following signs of growth in demand and a drop in high-cost production, an Opec official said yesterday. “It is expected that a kind of a balance will exist in the oil market in the second half of 2015 which will support prices,” Kuwait’s governor at Opec Nawal Al Fuzai told reporters. “Prices are improving, growth in supplies from outside Opec - especially shale oil - is lower than before and demand is recovering.”
This has pushed both the Organisation of Petroleum Exporting Countries and the International Energy Agency to adjust upward their forecasts for crude demand, Fuzai said. She said it was too early to predict any decision by Opec at its meeting next month………………………………………..Full Article: Source

Libya’s NOC chief sees higher oil prices, not relying on OPEC

Posted on 20 May 2015 by VRS  |  Email |Print

The head of Libya’s National Oil Corp (NOC) sees higher oil prices and said the company is working to boost output and regain market share taken by other producers. Speaking on a visit to London, NOC Chairman Mustafa Sanallah said he saw signs of oil demand increasing across the globe and a fall in the supply of shale oil in the United States.
“There is a general consensus that oil prices will recover. The worst of the market is behind us now,” he said on Tuesday at the Platts Global Crude Oil Summit. “It is expected that the oil price will start to rise by the beginning of the second half of this year and continue to rise in 2016.”……………………………………….Full Article: Source

Gold Price Trend Forecast

Posted on 20 May 2015 by VRS  |  Email |Print

Now that Gold has pushed to a three month high, it’s clear that my bullish read of the Gold tape is at least partially correct. In the face of recent negative price action, I had managed to remain cautiously bullish given Gold’s position in a new Investor Cycle - it was far too early for Gold to be rolling over, even if it remained locked in an extreme bear market.
But now, after this week’s action, Gold is in a much better position, and with the possibility of upside ahead. The market analysts who have been overwhelming bearish on Gold (many holding Shorts) are now in the position of potentially needing to play catch up, which would chase the market higher. We’ll be eagerly watching for upside confirmation, but for now, we’ll be content with finally gaining clarity on Gold’s Cycles………………………………………..Full Article: Source

Survey: Will the Gold Price Hit $5,000?

Posted on 20 May 2015 by VRS  |  Email |Print

Despite a ho-hum performance year to date for gold, Peter Schiff, chief executive officer at Euro Pacific Capital, is still betting on gold’s eventual climb to $5,000 an ounce. Schiff’s persistent call is more than 300% higher than Thursday’s settlement at $1,225.20 an ounce on Comex, which marked the highest close for the yellow metal since mid-February.
Gold is roughly 3% higher year to date, but the precious metal seems light year’s away from the all-time highs near $1,900 reached in 2011. Still, gold’s performance hasn’t been particularly exciting in recent months. Prices tallied declines for the last three months in a row. They logged declines last year and the year prior………………………………………..Full Article: Source

China steel price slumps to 12-year low

Posted on 20 May 2015 by VRS  |  Email |Print

Chinese prices of steel used mostly to build homes and offices fell to a 12-year low as peak construction season begins to ebb in the world’s biggest consumer. The average spot price of steel reinforcement bar, or rebar, dropped for a 10th day to 2,458 yuan ($396) a metric ton, the lowest level since January 2003, according to data from Beijing Antaike Information Development Co.
Spot rebar is 11 percent lower this year after four straight annual drops as a prolonged slump in China’s property sector has hurt steel demand. Prices have fallen after reaching a two-month high in March ahead of the usual peak-demand period from April to June. New home prices slid in 69 of the 70 cities tracked by the government in April from a year earlier, National Bureau of Statistics said on Monday………………………………………..Full Article: Source

Iron ore price inquiry ‘good and normal’ says Andrew Forrest

Posted on 20 May 2015 by VRS  |  Email |Print

As most Australians know, the price of iron ore has fallen massively, losing more than 60 per cent in the past year and a half and blasting a hole in the nation’s finances. That’s because demand from China has fallen. But the market is still heavy with supply.
Andrew Forrest, the chairman of Fortescue Metals Group, is accusing the big miners, BHP and Rio Tinto, of taking advantage of the situation and flooding the market further to drive the price down so smaller competitors like him collapse. He’s calling for a parliamentary inquiry into the iron ore price, something the Government last week appeared to favour but from which it’s since stepped back………………………………………..Full Article: Source

Iron ore price below $US60 a tonne as declines accelerate

Posted on 20 May 2015 by VRS  |  Email |Print

Iron ore has recorded its sharpest fall in weeks, as Canberra continues to mull whether or not to hold an inquiry into the activities of BHP Billiton and Rio Tinto. The price of iron ore delivered to the Port of Qingdao fell $US2.32, or 3.5 per cent, to $US58.53 per tonne on Monday.
The fall came as China steel prices slid to their lowest in 12 years as the iron ore hungry nation’s peak construction season began to ebb. Since May 11, when iron ore hit $US62.88 per tonne, the commodity has been gradually giving up gains made after BHP in April said it would slow production growth………………………………………..Full Article: Source

Oil prices to recover, says BHP

Posted on 19 May 2015 by VRS  |  Email |Print

Cheap oil prices will not last for long, with significant rises to come in two to three years because of a lack of new discoveries, BHP Billiton’s petroleum boss says. Equally weak natural gas prices will take longer to bounce back though, according to industry leaders attending Australia’s largest oil and gas conference.
The predictions on gas are good news for consumers, particularly manufacturers, but not the energy companies that have invested an estimated $75 billion on three new liquefied natural gas projects in Queensland that about to come online………………………………………..Full Article: Source

Oil price to reach $80 by 2017 – Iranian oil minister

Posted on 19 May 2015 by VRS  |  Email |Print

Iran hopes its crude oil exports will be back to the pre-sanctions level of 2.5 million barrels per day (bpd) and the oil price to rise to around $80 a barrel by end of 2016, according to Iran’s Deputy Oil Minister Rokneddin Javadi.
“It depends on the market situation and price level, but we will come back to the traditional trade that we had before,” Javadi said, Reuters reported on Monday. Asia could take more than 50 percent of Iran’s exports, he added. This can happen in three to six months once a deal with major powers to lift the oil embargo is finalized, the minister said………………………………………..Full Article: Source

Q1 physical gold sales up 20% in Germany as gold price hits $1,233

Posted on 19 May 2015 by VRS  |  Email |Print

Gold prices began the week at their best for three months and immediately bounced higher again to $1,233 an ounce with silver outperforming with higher percentage gains at $17.74. Meantime, the latest World Gold Council data revealed that the total demand for gold bars and coins was up by 20 per cent in Germany in the first quarter in a rush to get out of the then slumping euro.
The German economy may be the best performing in Europe at the moment but that has been partly down to a devaluing currency, and one sure fire way to protect against devaluation was to buy gold which is priced in US dollars………………………………………..Full Article: Source

Hope of $100 per Barrel Oil Price Dims

Posted on 18 May 2015 by VRS  |  Email |Print

Ahead of the June 2015 meeting of energy ministers of member countries of the Organisation of Petroleum Exporting Countries (OPEC) in Vienna, Austria, there are indications that the oil cartel may have given up hope of any near upsurge and significant rebound in the global prices of crude oil. Also, Nigeria’s oil output recorded a marginal decline for the month of April.
According to a draft paper leaked to the Wall Street Journal, OPEC had in its most optimistic scenario, projected that oil price will not exceed $76 a barrel until after 2025. The cartel, it was reported, also considered a scenario in which oil price fell below $40, although it denied that the draft document existed, but industry pundits note that such conclusions may be true considering that the chances of a return to triple-digit crude prices now look slimmer than it had ever been recently………………………………………..Full Article: Source

Oil price will break $70 barrier next winter: Expert

Posted on 18 May 2015 by VRS  |  Email |Print

The subsidies bill for petroleum products will drop in fiscal year 2014/2015 to nearly EGP 60bn compared to EGP 100bn especially allocated from the state’s budget, according to petroleum expert Mohamed Shoaib’s predictions.
Oil prices began to increase with the start of trade in May, with an average price of $67 per Brent barrel, compared to $57 as a maximum price last April. This came as a result of the increase of demand on crude oil in international markets, and the suspension of air strikes on Houthis in Yemen………………………………………..Full Article: Source

Will Oil’s Price Surge Continue? Don’t Bet on It

Posted on 15 May 2015 by VRS  |  Email |Print

The recent weakening of the US dollar and building of speculative long positions by hedge funds and other investors resulted in significant support for many commodities, except for precious metals. Because the fundamentals have not changed, and the situation of oil oversupply lingers on, we see downside risks to oil prices
The support for those commodities was driven by hopes of economic recovery (which would lead to increased demand) as well as fear of supply disruptions. The weakening of the US dollar was the result of disappointing US data, in combination with fears of delayed Fed action…………………………………..Full Article: Source

Oil Prices Fall on Steady Production

Posted on 15 May 2015 by VRS  |  Email |Print

Oil prices fell slightly Thursday as concerns about steady production captured the market’s attention. Light, sweet crude for June delivery settled down 62 cents, or 1%, to $59.88 a barrel on the New York Mercantile Exchange. Brent, the global benchmark, fell 22 cents, or 0.3%, to $66.59 a barrel on ICE Futures Europe.
Traders have been weighing signs that production cutbacks may have bottomed out. Several U.S. producers said in recent quarterly reports that they have met or exceeded their production targets, said Kyle Cooper, managing director of research at IAF Advisors, a Houston consulting firm…………………………………..Full Article: Source

Oil Prices Will Find It Very Difficult To Go Over $70-75 In The Next 2 Years

Posted on 15 May 2015 by VRS  |  Email |Print

Crude oil has seen a massive recovery from mid-$40 levels just two months ago to above $60 where it is trading now. While some are bullish that this move will continue and prices will continue to move upwards till $100, Oppenheimer Energy analyst Fadel Gheit thinks that’s unlikely.
“We see oil prices moving higher,” Gheit said. “But we are not likely to see a repeat of the recovery that we have seen over the last eight weeks. Eight weeks ago oil prices were $44, today oil prices are around $60. We think that oil prices will start moving up again, but probably at much slower pace. I still believe that oil prices will probably try to seek an equilibrium really round $60 to $65.” ………………………………….Full Article: Source

Gold Prices Hit Three-Month High on Hopes Fed Will Delay Rate Increases

Posted on 15 May 2015 by VRS  |  Email |Print

Gold prices extended their rally to a three-month high on Thursday, as lower producer-price data fueled hopes the Federal Reserve will put off raising U.S. interest rates. The most actively traded contract, for June delivery, rose $7, or 0.6%, to settle at $1,225.20 a troy ounce on the Comex division of the New York Mercantile Exchange. That was the highest close since Feb. 13, when prices ended at $1,227.10 an ounce.
The U.S. producer-price index, a measure of prices businesses receive for their goods and services, fell 0.4% in April from March. Core prices, which exclude food and energy, fell 0.2%. Economists surveyed by The Wall Street Journal had expected both overall and core prices to climb 0.1%. ………………………………….Full Article: Source

Oil Markets: Use Your Illusion

Posted on 14 May 2015 by VRS  |  Email |Print

Misdirection is how magicians distract you from what is really happening with that card you picked. The oil market similarly seems to be taking its cues away from the real action. Oil inventories provide a ready way of tracking how supply is matching up with demand. If supply is ample, some of it will flow into tanks and inventories will rise. This has been the story for much of the past six months or so.
Recently, though, U.S. crude oil stocks have begun falling slightly, which has added fuel to prices. On Wednesday, the Energy Information Administration reported that commercial stocks of crude oil and refined products fell by 5.5 million barrels in the week ended May 8. West Texas Intermediate rose above $61 a barrel; two months ago it was at less than $50…………………………………….Full Article: Source

Macquarie lowers 2015 gold, silver price forecasts

Posted on 14 May 2015 by VRS  |  Email |Print

Investment firm Macquarie sees average 2015 gold price forecast at $1,231 per ounce and silver at $17 per ounce.
It also made small reductions to gold, silver forecasts to reflect view that US interest rate rise will become increasingly priced-in during second quarter, strengthening the dollar…………………………………….Full Article: Source

Gold prices surge above $1,200/oz as US data underwhelms

Posted on 14 May 2015 by VRS  |  Email |Print

Gold prices broke through the physiological barrier of $1,200 per ounce for the first time in two weeks as US data continues to disappoint and oil prices rise. Gold for June delivery on the Comex division of the New York Mercantile Exchange climbed by $12.60 to $1,205 per ounce. Trade has ranged from $1,190.40 to $1,206.90.
In US data, core retail sales month-over-month in April were up 0.1 percent, off the 0.4 percent forecast, while retail sales month-over-month for April was unchanged, missing the estimates of 0.3 percent. Even more pronounced, April import prices month-over-month were down 0.3 percent, in opposite direction of the 0.3 percent increase forecast…………………………………….Full Article: Source

Why are commodity prices seeing divergent movements?

Posted on 13 May 2015 by VRS  |  Email |Print

Global commodity markets are currently witnessing divergent price behaviour. In recent weeks, crude oil and many base metals have seen sharp price spikes. On the other hand, there are commodities that have not seen any significant price movement during the same period. Debate among market participants is around factors that have driven prices of some commodities up notwithstanding the fact that fundamentals in some cases are weak.
Among base metals, copper and zinc prices gained about 8 per cent and nickel 11 per cent. Aluminium and lead moved up by 3-4 per cent. The most interesting aspect of the recent price behaviour is that exchange-traded commodities have rallied as headwinds have lost some velocity………………………………………..Full Article: Source

Minor rally in prices unlikely to herald return to good old days

Posted on 13 May 2015 by VRS  |  Email |Print

Recent weeks have seen both a struggle between two potential suitors seeking control of Asia Resource Minerals, an Indonesian coal company, and a debate over the soundness of the accounting practices at Noble Group, a Hong Kong-based, Singapore-listed trading company. The debate over Noble grew more intense after it reported a 30 per cent drop in operating income to $106m for the first quarter and came after several research reports criticised the group’s accounting.
While developments at the two groups are unrelated on the surface, they underscore the difficulties faced by Asian commodity producers and the trading companies that serve as the middlemen between them and their customers………………………………………..Full Article: Source

Commodity prices still likely to fall: Kames

Posted on 13 May 2015 by VRS  |  Email |Print

Investors should remain wary of commodity markets, despite some prices appearing to stabilise, Kames Capital chief investment officer Stephen Jones has claimed. Jones said while oil and copper appeared to have hit a floor in terms of price and were enjoying strong inflows through exchange-traded funds, the main factors depressing prices remained.
He said: “When you look through short-term factors for commodities, for example unrest in the Middle East and its impact on oil, analysis inevitably reverts back to supply and demand dynamics to dictate the price. “A rampant US dollar, large build-ups of reserves and few signs of increasing demand mean commodities continue to be challenged.”……………………………………….Full Article: Source

EIA ups 2015 crude-price forecasts, cuts 2016 view

Posted on 13 May 2015 by VRS  |  Email |Print

The U.S. Energy Information Administration raised its 2015 forecasts for West Texas Intermediate and Brent crude prices in a monthly report issued Tuesday. The government agency said it expects WTI prices to average $54.32 a barrel this year, up from a previous forecast of $52.52.
The EIA, however, said it expects WTI crude to average $65.57 a barrel in 2016, down from the prior view of $70.07. Brent crude is forecast at $60.79 this year, up from a previous forecast of $59.39. The EIA said it expects natural-gas prices to average $2.93 per million British thermal units this year, down from the earlier estimate of $3.07………………………………………..Full Article: Source

OPEC sees oil price below $100 a barrel in the next decade

Posted on 13 May 2015 by VRS  |  Email |Print

The Organization of the Petroleum Exporting Countries doesn’t see oil prices consistently trading at $100 barrel again in the next decade, a pessimistic assessment that has the group considering the return of production limits to influence the market, according to people familiar with a recent strategy report.
The report, seen by The Wall Street Journal, predicts that oil prices will be about $76 a barrel in 2025 in its most optimistic scenario, the people said, a reflection of the cartel’s worries that American competitors will be able to cope with low prices and keep pumping out supplies. It also contemplates situations where crude oil costs below $40 a barrel in 2025, the people said………………………………………..Full Article: Source

What’s Next for the Gold Price?

Posted on 13 May 2015 by VRS  |  Email |Print

Will gold zoom higher with Greece on the brink of default? Or will it crash as the Fed pursues an “exit?” Why has gold not rallied with the recent retreat of the dollar? To understand where gold may be heading, keep in mind that this shiny metal isn’t changing; it’s the world around it that is. We contemplate why investors may want to hold gold as part of their portfolio.
In today’s world where the utterance of a pundit may move markets, it may be helpful to go back to basics to allow investors to make up their own mind as to what drives markets and what may be a good investment. As such, gold is simply a precious metal, a rare, naturally occurring chemical element that tends to be less reactive than most elements………………………………………..Full Article: Source

Why China Is Taking Control Of Physical Gold Pricing

Posted on 13 May 2015 by VRS  |  Email |Print

The Chinese have always been in love with gold. And this year especially China is taking several steps to rattle gold markets. The country is currently lobbying to be including in the International Monetary Fund’s reserve currency and gold has a lot to do with that process. Estimates say China has amassed thousands of tons of gold reserves that could rival the United States in the future.
“It is the Chinese view that all great currencies have gained prominence in some measure because of the hard asset reserves the government standing behind the currency holds. Gold reserves both from the government and reserves held by the population are a key factor for economic security for them,” says Simon Mikhailovich, managing director at Tocqueville Bullion Reserve………………………………………..Full Article: Source

OPEC Sees Oil Price Below $100 a Barrel in the Next Decade

Posted on 12 May 2015 by VRS  |  Email |Print

The Organization of the Petroleum Exporting Countries doesn’t see oil prices consistently trading at $100 a barrel again in the next decade, a pessimistic assessment that has the group considering the return of production limits to influence the market, according to people familiar with a recent strategy report.
The report predicted that oil prices will be about $76 a barrel in 2025 in OPEC’s most optimistic scenario, the people said, a reflection of the cartel’s worries that American competitors will be able to cope with low prices and keep pumping out supplies. It also contemplated situations where crude oil costs below $40 a barrel in 2025, the people said………………………………………..Full Article: Source

Saudi Arabia will stick to non-intervention as oil prices rise

Posted on 12 May 2015 by VRS  |  Email |Print

Next month’s Opec meeting likely to leave current output quotas in place while it lets market work. High quality global journalism requires investment. As oil prices halved last year, investors and traders kept expecting Saudi Arabia to intervene. It took oil minister Ali al-Naimi and his officials months to persuade everyone that the kingdom was quite content to let market forces determine prices and clean up excess supply.
Now that oil is on the way up again — Brent at $65 a barrel has risen by nearly 50 per cent from its January low — markets are once more waiting for Saudi to act: this time to stop prices from rising too rapidly so that they do not choke off a global recovery and encourage battered US shale oil producers to redeploy rigs……………………………………….Full Article: Source

Oil prices have been soaring—now look for them to plunge again

Posted on 12 May 2015 by VRS  |  Email |Print

After falling roughly 60% from July through March, oil prices are now up around 44% from their bottom. The chatter among many investors and industry players is that the worst is over. The only questions remaining, they say, are how high prices will go from here and how soon oil drillers can resume counting their profits.
Others suggest that the market is getting giddy—oil prices will turn back down, they counter, namely because the conditions that produced the breathtaking plunge over the last 11 months largely still persist. The recent rebound is “likely a false dawn, I’m afraid,” Jamie Webster, an analyst with IHS CERA, tells Quartz………………………………………..Full Article: Source

Oil holds under $60 as traders weigh China demand

Posted on 12 May 2015 by VRS  |  Email |Print

Oil futures settled lower Monday, lingering below $60 a barrel, as traders considered the outlook for crude demand after China stepped up efforts to boost its economy. Analysts, meanwhile, remained cautious about the recent strength in oil markets.
Over the weekend, China, the world’s second-largest consumer of oil, cut interest rates for the third time in six months in an effort to stimulate its economy. “China’s economy is slowing but they are buying oil like it’s going out of style,” said Phil Flynn, senior market analyst at Price Futures Group………………………………………..Full Article: Source

Gold price shrugs off Chinese stimulus

Posted on 12 May 2015 by VRS  |  Email |Print

The gold price struggled to gain any momentum on Monday, despite the likelihood of a delay to any US interest rate rises and news of further stimulus measures out of China over the weekend.
Spot gold was last seen at $1,184.50/1,185.30 per ounce, down $2.80 on the pre-weekend session and trading within a $6 range so far. In other metals, silver was down one cent at $16.40/16.45 per ounce, while platinum fell $2 at $1,136/1,141 per ounce, and palladium was unchanged at $795/800………………………………………..Full Article: Source

RBA expects commodity export prices to stay high

Posted on 11 May 2015 by VRS  |  Email |Print

The outlook for Australia’s commodity exports has been further downgraded by the Reserve Bank but, like Treasury, it still believes prices will remain permanently higher than ever before, even at the peak of the last big boom 40 years ago.
Downgrades in the terms of trade (the ratio of export prices to import prices) will be one of the main sources of revenue writedown in tomorrow’s federal budget, despite Treasury endeavouring to make the estimates included in both last year’s budget and the mid-year budget update published last December more conservative than the market consensus………………………………………..Full Article: Source

Rebound in US shale will limit oil price recovery

Posted on 11 May 2015 by VRS  |  Email |Print

It has been one of the less widely noticed oil price surges. Since January, benchmark Brent crude has risen from less than $47 per barrel to more than $65 per barrel, an increase of about 40 per cent.
The rise has reversed less than a third of the plunge in oil from its peak above $115 per barrel last summer, but there have already been signs that the increase is starting to unsettle debt and equity markets………………………………………..Full Article: Source

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