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Oil prices at $60 is ‘new normal’, says Colombian finance minister

Posted on 02 March 2015 by VRS  |  Email |Print

Mauricio Cárdenas, Colombia’s finance chief, says country is adjusting to new era of lower prices. The era of $100 oil is over, according to Colombia’s finance minister, who said the country was preparing for a “new normal” of between $60 and $70 per barrel.
Mauricio Cárdenas said Colombia, which produces one million barrels of oil per day, was “not counting” on prices returning to their June high of $115 a barrel in the coming years. “We’re making everything that is necessary to adjust in a small and gradual way to prices between $60 and $70,” he told the Telegraph………………………………………..Full Article: Source

‘Happy Naimi’: Calm Saudi Arabia signals $60 oil price for the long-haul

Posted on 02 March 2015 by VRS  |  Email |Print

OPEC kingpin Saudi Arabia is feeling vindicated after a strategy of allowing oil to flood the market has begun to achieve what it was aiming for. As a global oil glut pushed prices down 60 percent between June 2014 and January 2015, signs began to emerge that OPEC’s rivals, including North American producers, will have to curtail output of their expensive barrels.
Two months into 2015, oil prices have recovered to around $60 per barrel from their January lows of $45 – much faster than Saudi Arabia had hoped for when it convinced fellow OPEC members in November not to cut output to defend market share against shale oil and other competing supply………………………………………..Full Article: Source

Oil prices can ‘bounce back’ to $80 per barrel

Posted on 02 March 2015 by VRS  |  Email |Print

Davy Stockbrokers is forecasting a recovery and tightening in global oil prices in the second half of this year, adding that numbers can rise from the current $59 to $60 per barrel level to a long-term price of $80 per barrel.
“While the edge may have come off demand growth, the primary driver of weaker oil prices has been the relentless increase in US light tight oil or shale-based oil that requires controversial methods, such as ‘fracking’ to find] production and, to a lesser extent, sustained output from OPEC,” said Job Langbroek, Davy’s senior exploration and mining analyst in a new detailed report on the price of oil………………………………………..Full Article: Source

Iraq tips oil price jump to $US65

Posted on 02 March 2015 by VRS  |  Email |Print

Iraqi Oil Minister Adel Abdel Mahdi says he expects the price of crude oil, which dropped to a six-year low in January, to continue recovering to reach $US64 ($A82.12) or $US65 per barrel. “I don’t think they (prices) will return to their former levels immediately… We expect them to rise more, probably to $US64 or $US65,” he told reporters.
Brent North Sea crude, the global benchmark, had tumbled to $US45 per barrel at the beginning of the year, less than half the level reached six months earlier. It surged to $US62 on Friday. Iraq, which is hugely dependent on oil exports for revenue and is fighting a costly war against the Islamic State jihadist group, also owes more than $US20 billion to the oil companies operating in the south, Mr Abdel Mahdi said………………………………………..Full Article: Source

Analysts see gold price recovery ahead

Posted on 02 March 2015 by VRS  |  Email |Print

Analysts are warming up, albeit cautiously, to gold after more than three years of falling prices that put the great majority of Canadian gold exploration companies in the deep freeze. CIBC World Markets senior economist Peter Buchanan is predicting an uptick this year to $1,300 US from $1,200 in 2014, and a modest gain to $1,325 in 2016.
Scotiabank’s Commodities Price Index, taking note of last year’s price drop, has suggested that physical demand for the metal is recently bolstered by “general economic uncertainty.” ……………………………………….Full Article: Source

OPEC mulls emergency meeting amid low oil prices

Posted on 27 February 2015 by VRS  |  Email |Print

Some OPEC members, concerned about the economic impact of low oil prices, say the cartel may have to call an emergency meeting sooner rather than later. But Saudi Arabia, the most influential member, is likely to veto such an idea.
Many OPEC members say the cartel may have to call an emergency meeting production and prices because of the damage the collapse of oil prices has been doing to their countries’ economies. But the prospects of such a gathering seem remote………………………………………..Full Article: Source

Opec sees market stabilising, okay with current price of $60

Posted on 27 February 2015 by VRS  |  Email |Print

Oil prices have started to stabilise around current levels of $60 a barrel and demand is showing signs of improving in Asia and other regions, a senior Gulf Opec delegate said. The comments indicate that the core Gulf members of the Organisation of the Petroleum Exporting Countries (Opec) are showing no sign of wavering in their strategy to focus on market share rather than cutting output, despite concerns from other members about falling oil revenue.
“Oil prices seem to stabilise around the current level … there are a lot of indications showing that demand is growing,” the senior Gulf Opec delegate said. “The market is stabilising as well as prices,” the delegate said, adding that $60 a barrel is “okay for now.”……………………………………….Full Article: Source

Analysts see gold price recovery ahead

Posted on 27 February 2015 by VRS  |  Email |Print

Analysts are warming up, albeit cautiously, to gold after more than three years of falling prices that put the great majority of Canadian gold exploration companies in the deep freeze. CIBC World Markets senior economist Peter Buchanan is predicting an uptick this year to $1,300 US from $1,200 in 2014, and a modest gain to $1,325 in 2016.
Scotiabank’s Commodities Price Index, taking note of last year’s price drop, has suggested that physical demand for the metal is recently bolstered by “general economic uncertainty.”……………………………………….Full Article: Source

What To Make Of Gold Prices In 2015

Posted on 27 February 2015 by VRS  |  Email |Print

For much of the past decade, gold has been viewed as one of the most stable and predictable investments in existence. The price of gold was rising slowly but steadily, and crises in world politics and financial markets continually proved that the precious metal had value as a protective hedge.
And yet, in mid-2012, this popular outlook began to change as gold prices became more volatile than most modern investors are used to seeing. Take a look at the 10-year gold pricing chart at online precious metal market BullionVault.com, and you’ll see the trend as clear as day. While gold today remains at a significantly inflated per ounce price than what we saw a decade ago, the steady rise that investors got used to between 2005 and 2012 is no more………………………………………..Full Article: Source

Why Oil Will Fall To $40 As Obama Looks The Other Way

Posted on 26 February 2015 by VRS  |  Email |Print

On August 20, 2014 I warned Forbes.com readers that oil prices were going to drop a lot. (See article; the price of WTI was $104/barrel at the time). I’ve rarely felt more conspicuous about a prediction and I’m in the business of making predictions. Now what? Prices have collapsed–or I should say: the bubble has popped. What happens next?
First, prices are firming up while news of marginal production cuts invite buyers. In the long run, prices will reflect the advent of new supplies of cheap oil coming from two very important sources in the Western Hemisphere. Mexico’s Pemex reforms could lead to a one million barrel per day production increase while President Obama’s restrictive energy policies are about to be reversed………………………………………..Full Article: Source

Nigeria Proposes Cutting Oil Price Benchmark to $52 a Barrel

Posted on 26 February 2015 by VRS  |  Email |Print

Nigeria’s Senate and executive proposed cutting this year’s budgeted oil price benchmark to $52 per barrel from $65 suggested in December, as falling prices erode the income of Africa’s biggest crude producer.
Nigeria’s finance ministry said an agreement had been made with the Senate and most members of the House of Representatives, though the lower chamber has yet to approve. “The proposal is $52 a barrel for 2015 due largely to decline in crude oil prices,” Enyinnaya Abaribe, chairman of the Senate Committee on Information and Media, said……………………………………….Full Article: Source

Oil Price Crash: Top 5 At-Risk Countries

Posted on 26 February 2015 by VRS  |  Email |Print

Since June 2014, global oil prices have dropped by more than 50%. The drop could strongly affect the economic and political stability of these five oil exporting countries. Oil prices make winners and losers. In general, oil importers will gain from low prices, while most oil exporters will suffer. Still, there are differences. While the United States, Norway, and the Gulf States can protect themselves with diversified economies and high hard currency reserves, the oil shock could bring some countries to the verge of economic default and political crisis.
Venezuela entered the period of low oil prices with an already frail economy ruined by the more than a decade-long socialist regime of Hugo Chavez and his successor Nicolas Maduro. The oil price slump significantly worsened the country’s already failing economy………………………………………..Full Article: Source

Why a small dip in the oil price matters an awful lot

Posted on 25 February 2015 by VRS  |  Email |Print

After a mini rally, oil prices are falling again. From $62 a barrel 10 days ago, Brent crude has slipped to $58.43 on Tuesday. It may not seem like much of a cut after the collapse in world oil prices that sent Brent tumbling from $115 to $45 a barrel between last June and January, but it is still significant.
The reason this turn in the price of oil matters can be seen in every corner of the world economy: when fear of a new cold war or a eurozone break-up hangs over every corporate and government decision, cheap energy lightens the load………………………………………..Full Article: Source

Is there a Logical Oil Price?

Posted on 25 February 2015 by VRS  |  Email |Print

If you have been following the price of oil over the last few months, the chances are you are a little confused. On the one hand, you have the likes of A. Gary Shilling who, in this Bloomberg article, loudly trumpets the prospect of oil at $10/Barrel, and on the other, there is T. Boone Pickens, who, at the end of last year was predicting a return to $100 within 12-18 months.
Pickens prediction has moderated somewhat as WTI and Brent crude have continued to fall, but in January he was still saying that oil would return to $70 or $80/barrel in the near future. So, who is correct? ……………………………………….Full Article: Source

Oil market is stabilising, $60 is OK for now - Gulf OPEC delegate

Posted on 25 February 2015 by VRS  |  Email |Print

Oil prices have started to stabilise around current levels of $60 a barrel and demand is showing signs of improving in Asia and other regions, a senior Gulf OPEC delegate said on Tuesday.
The comments indicate that the core Gulf members of the Organization of the Petroleum Exporting Countries are showing no sign of wavering in their strategy to focus on market share rather than cutting output, despite concerns from other members about falling oil revenue………………………………………..Full Article: Source

Oil back below $50 as OPEC hopes fade

Posted on 25 February 2015 by VRS  |  Email |Print

Any hopes of a sustained rally in the price of oil disappeared Tuesday morning as doubts were raised over an anticipated cut in production from the Organization of the Petroleum Exporting Countries (OPEC). The oil cartel is not due to meet until June this year but a report by the Financial Times - with comments by Diezani Alison-Madueke, the Nigerian oil minister - suggested that an emergency meeting was due in the near term.
This raised hopes that OPEC could cut production, something it had refused to do back at its last meeting in November 2014. An anonymous delegate from the group denied these claims, telling Bloomberg overnight there was no emergency meeting planned. Brent crude futures dropped to 58.56 a barrel by 8:00 a.m………………………………………..Full Article: Source

Gold and silver prices: The next bank rigging scandal?

Posted on 25 February 2015 by VRS  |  Email |Print

US authorities open investigations into banks including HSBC and Barclays over possible rigging of precious metals benchmarks. The world’s biggest banks are still reeling from the consequences of the Libor and foreign exchange scandals, but US authorities are now investigating the possibility of more rigging.
Several banks are being scrutinised over how they set influential benchmarks in the markets for gold, silver, platinum and palladium in London, with at least 10 under investigation from the Department of Justice (DoJ) and Commodities and Futures Trading Commission (CFTC), according to reports………………………………………..Full Article: Source

Platinum price puzzles

Posted on 25 February 2015 by VRS  |  Email |Print

Despite a big perceived supply deficit, platinum prices have remained depressed. How can this be? If anything demonstrates the illogicality of the precious metals markets, it appears to be platinum. But is this really the case?
Currently the metal is languishing at around a five-year low, yet most analysts put global platinum supply as being in a substantial deficit situation ever since last year’s South African platinum mine strikes, which took a substantial hunk of the metal out of the markets. Platinum is also selling at a lower price than gold – around $40 an ounce lower at the moment – which is a relatively rare, but not unknown, occurrence………………………………………..Full Article: Source

Are low oil prices here to stay?

Posted on 24 February 2015 by VRS  |  Email |Print

Predicting the oil price is a bit of a mug’s game. There are simply too many variables involved to make any kind of meaningful, definitive forecast. What we do know is that, despite a recent upturn, the price of oil has slumped almost 50% since last summer following the longest-running decline for 20 years.
And we know why - US shale oil, and to a lesser extent Libyan oil returning to the market, has pushed up supply while a slowdown in the Chinese and EU economies has reduced demand. Add to the mix a strong US dollar making oil more expensive in real terms, pushing demand even lower, and you have a recipe for a plummeting oil price………………………………………..Full Article: Source

Oil price turbulence: will it climb to $100 or drop to $10?

Posted on 24 February 2015 by VRS  |  Email |Print

The oil price fell again today after a week of small gains and losses in which a barrel of Brent crude hovered around the $60 mark. A strengthening dollar and concerns about long-term oversupply offset reduced output due to freezing weather and industrial action in the US, Reuters reports.
But the oil price remains at little more than half its peak in June last year, and some analysts predict it may yet fall far lower. Others claim the price has now bottomed out. Last week, Bloomberg’s A. Gary Shilling predicted the possibility of oil at $10 per barrel – a far cry from the predictions of T. Boone Pickens, who towards the end of last year anticipated a return to an oil price of $100 within 12 to 18 months………………………………………..Full Article: Source

OPEC Said Not to Plan Emergency Meeting Amid Falling Oil Prices

Posted on 24 February 2015 by VRS  |  Email |Print

The Organization of Petroleum Exporting Countries has no plans to hold an emergency meeting amid falling oil prices, according to a delegate from the group. Crude prices have dropped almost 50 percent from a June peak as OPEC refused to cut production and U.S. output reached a three-decade high.
There have been no concrete discussions about holding an emergency meeting, said the delegate, who asked not to be identified because the group’s talks are private. OPEC’s next regular meeting is on June 5. Brent futures dropped $1.32 to $58.90 on the London-based ICE Futures Europe exchange………………………………………..Full Article: Source

Oil’s Plunge Could Help Send Its Price Back Up

Posted on 23 February 2015 by VRS  |  Email |Print

If something is cheaper, people will likely buy more of it. That core principle of economics is proving to be especially true with oil after its recent plunge. Over the past six months, 53% of vehicle purchases in the U.S. were light trucks or sport-utility vehicles, which tend to consume more gas than cars, according to Commerce Department data.
That was the highest share in a decade and up from 51% last June, when oil prices peaked for the year. The Transportation Department estimates Americans drove more than three trillion miles in the 12 months through November, the most since mid-2008 and the biggest annual increase—38 billion miles—in a decade………………………………………..Full Article: Source

Global crude oil prices - changing market dynamics

Posted on 23 February 2015 by VRS  |  Email |Print

For much of the last six years since the financial crisis in 2008 global oil prices recovered swiftly and have remained high in a range of $100 per barrel since 2010. The soaring oil prices during this period were being supported by steady economic recovery following the crisis, increasing consumption in rapidly growing countries like China and conflicts in key oil nations like Iraq and Libya.
Thus, in the midst of growing demand, oil prices spiked. But then very soon and unexpectedly, WTI crude that peaked at around $106 per barrel in June last year had fallen more than 50 per cent to under $50 per barrel by January this year. Simply put, the reasons for this change are two-fold — surging US production coupled with weakening demand in many countries due to insipid economic growth………………………………………..Full Article: Source

Deflation: The high cost of falling prices

Posted on 20 February 2015 by VRS  |  Email |Print

Low or negative inflation is spreading around the world. That is more of a worry than it sounds. For central banks in the rich world, two is a magic number. If prices rise at 2% a year, most shoppers can more or less ignore their slow ascent. And a touch of inflation is hugely helpful: it gives bosses a way to nudge unproductive workers—a pay freeze actually means a 2% cut—and an incentive to invest their earnings.
Most importantly it keeps economies away from deflation and the depressing choices—hoarding cash, delaying purchases—that falling prices can bring. Yet despite the professed adherence to the 2% mantra, a period of falling prices is on the cards………………………………………..Full Article: Source

Oil Prices Hit The Snooze Button For The Next Year Or Two

Posted on 20 February 2015 by VRS  |  Email |Print

Oil bulls and bears need to stop talking their books and get real. Crude isn’t going back above $100 a barrel – at least not anytime soon. Nor is it falling to $20. How can I be so sure? A confluence of political, economic, and, most importantly, technological changes are having a major impact on the way we produce and consume oil, making it both cheaper and more abundant.
Barring some major international conflict, oil prices will most likely be range bound for quite a while, with a floor of somewhere around $40 a barrel (where we have seen massive rig count and CAPEX reductions) and a top around $80 a barrel, above which production really ramps up………………………………………..Full Article: Source

Oil prices fall again as inventories build

Posted on 20 February 2015 by VRS  |  Email |Print

Oil prices fell for a second day on Thursday, after the U.S. government reported another record high in crude inventories, but prices bounced sharply off session lows on relief the builds were less than an industry group had estimated.
Prices also retraced losses as investors covered more short positions in U.S. crude futures a day ahead of the expiry of the front-month contract. U.S. commercial crude oil inventories rose 7.7 million barrels last week to a record 425.6 million barrels, , the U.S. Energy Information Administration (EIA) said. It was the sixth straight week levels were at a seasonal record peak………………………………………..Full Article: Source

Silver Prices Preparing For A Strong Rally

Posted on 20 February 2015 by VRS  |  Email |Print

In September, we alerted readers to watch Gold and Silver prices for a development that could signal a market low. We believe that low arrived on November 30, and prices are now tracing an upward pattern that should continue until the middle of 2015 or beyond. For several reasons, we expect the current price area to serve as a base for both precious metals to rally. This article presents our forecast for silver prices, which we believe will test targets in the 20’s in coming months.
Even though we are watching for higher silver prices, we expect the rally to take a three-wave corrective form. The monthly silver chart below shows some of the context around that prediction. For both gold and silver, there are numerous signs that the price decline from 2011 was merely the first part of a larger corrective structure………………………………………..Full Article: Source

Oil price ‘could fall to $10 per barrel’

Posted on 19 February 2015 by VRS  |  Email |Print

Oversupply, the failure of Opec and diminishing demand will push oil price down again, Bloomberg says. The plunging global oil price has gone into reverse in the past two weeks, prompting some traders to suggest that the oil market had reached a bottom. But according to new analysis by Bloomberg, oil prices could fall sharply again and could even reach $10 per barrel.
In his report, A. Gary Shilling argues that a combination of factors will push the oil price down again. The first is the diminishing power of the Opec cartel. In Shilling’s view, Saudi Arabia has experienced market-share losses in the past, due to the “cheating” of fellow cartel members, who have exceeded their agreed output quotes………………………………………..Full Article: Source

The price of oil is not a reflection of demand and supply

Posted on 19 February 2015 by VRS  |  Email |Print

“People today are worried about the plunging price of oil, which however is not a reflection of demand and supply alone”, says Dr. R. Seetharaman, Group CEO, Doha Bank. In the last six months, we have seen oil prices come down by 50 per cent – this does not mean that supply has increased by 50 per cent, or that demand has reduced by 50 per cent.
Yes, there indeed is excess supply, but what really has changed is the currency. The Dollar Index, for instance, has moved from 79 to above 94, and has also contributed to fall in prices in the commodity market. When the Dollar is weak, people hedge their risks by buying commodity futures, and when the Dollar is strong they unwind their positions………………………………………..Full Article: Source

All Commodities Rise With Rising Oil

Posted on 19 February 2015 by VRS  |  Email |Print

What happens to other commodities when oil prices spike? On one hand, if oil rises so much that an economic slowdown overpowers the tax-break effect, then commodities might fall. However, oil is a main input to produce many other commodities, so the prices of goods can rise when oil prices increase.
The latter scenario is more likely, given the historical relationship of energy to inflation and to other commodities. One of the hallmarks of diversification in commodities is how lowly correlated they are to each other from the individual supply-and-demand models. Notice that the highest correlation between any two sectors in the chart below is 0.27………………………………………..Full Article: Source

Gold Price $250 Forecast - Dear Harry Dent: Wanna Bet?

Posted on 19 February 2015 by VRS  |  Email |Print

Some of you may be aware that investment guru Harry Dent has publicly stated that gold will fall to $250-$400. He specifically predicted: Around $700/ounce is a certainty in gold by 2015 to 2016, and $250 is a possibility well down the line by 2020–2023.
His forecast is largely based on his belief that deflation will prevail. Governments are fighting deflation. If government stimulus fails, we will have deflation, not inflation. And he claims that gold bugs are wrong about gold’s future price because they don’t understand how markets work………………………………………..Full Article: Source

Get ready for $10 oil, says A. Gary Shilling

Posted on 18 February 2015 by VRS  |  Email |Print

At about US$50 a barrel, crude oil prices are down by more than half from their June 2014 peak of US$107. They may fall more, perhaps even as low as US$10 to US$20. Here’s why. U.S. economic growth has averaged 2.3% a year since the recovery started in mid-2009. That’s about half the rate you might expect in a rebound from the deepest recession since the 1930s.
Meanwhile, growth in China is slowing, is minimal in the euro zone and is negative in Japan. Throw in the large increase in U.S. vehicle gas mileage and other conservation measures and it’s clear why global oil demand is weak and might even decline………………………………………..Full Article: Source

Oil prices to recover partially from record low: IEA

Posted on 18 February 2015 by VRS  |  Email |Print

Global oil prices are expected to recover only partially from their current $50-$60 a barrel range, the International Energy Agency (IEA) says in its five-year forecast. The agency said on Tuesday that crude prices will continue to remain well below the level of more than $100, last seen in June 2014.
“The global oil market looks set to begin a new chapter of its history, with markedly changing demand dynamics, sweeping shifts in crude trade and product supply, and dramatically different roles for Organization of the Petroleum Exporting Countries, OPEC, and non-OPEC producers in regulating upstream supply,” the report said………………………………………..Full Article: Source

Oil prices rise to $62, reach close to 2015 high

Posted on 18 February 2015 by VRS  |  Email |Print

Oil rose to $62 a barrel on Tuesday, close to its 2015 high, supported by threats to Middle East supplies and expectations lower prices may prompt a slowdown in US output. Egypt on Monday bombed Islamic State targets in Libya, where violence has reined in most oil output, and Iraq’s semi-autonomous Kurdistan Regional Government threatened to withhold oil exports if Baghdad failed to send its share of the budget.
“The oil price is finding additional support from renewed greater perception of the risks to supply,” said Carsten Fritsch, analyst at Commerzbank. “In the short term, the momentum suggests that prices will climb further.” Brent crude rose 60 cents to $62.00 a barrel by 1101 GMT. It reached a 2015 high of $62.57 on Monday. US crude was 43 cents higher at $53.21 a barrel……………………………………….Full Article: Source

Gold price starting to look ‘vulnerable’ on seasonality: UBS

Posted on 18 February 2015 by VRS  |  Email |Print

The price of gold is starting to look vulnerable as the market heads into the “seasonally weak period” with the Lunar New Year around the corner, UBS said Tuesday. New Year holidays in China begin Wednesday, and participants will be out through to Tuesday next week.
“The absence of this key physical market in a sense removes a natural cushion and therefore increases gold’s downside potential should negative catalysts emerge in the coming days,” analyst Joni Teves said in a research note. The price of gold had been enjoying a solid run in recent weeks spurred by a myriad of bullish factors including the unpegging of the Swiss franc against the euro and concerns about a possible exit by Greece from the eurozone and any potential ramifications………………………………………..Full Article: Source

More oil project delays to return price to $110 – Rosneft CEO

Posted on 17 February 2015 by VRS  |  Email |Print

The key market indicators show the oil prices could soon rebound to about $80 a barrel, Rosneft CEO Igor Sechin said, adding that the price may even bounce back to $110 a barrel if more projects are shelved. “Look at the market fundamentals and it seems prices should soon rebound to the $60 or $80 a barrel levels that would make it worth building the wells that the world needs,” Sechin wrote in an article for the FT.
However, if markets are distorted, and the recovery takes longer than expected, many projects will be scrapped, and with demand returning, the price could rise to $90-110 a barrel or even higher. Many experts compare the current oil crisis to the one of the mid-80’s when the oil price fell more than 70 percent and remained at low levels for more than a decade………………………………………..Full Article: Source

How Will the Global Oil Price Slump Impact the US Economy?

Posted on 17 February 2015 by VRS  |  Email |Print

With the unexpected shock of the global crude oil price collapse enveloping the second half of 2014, with few signs of letup, its effect on the 2015 U.S. economy is starting to take a long-term downside position. Although most media economic analysts dwell on the benefits to America’s predominant consumer sector, a rational analysis of the pluses and minuses of this dramatic price reversal paint a mixed picture.
In order to make a fair and balanced assessment of the sudden drop of both worldwide Brent crude, and U.S.-based West Texas Intermediate, starting in mid-year 2014, there’s little question that the American consumer, as well as many businesses focusing on that sector, come out as clear winners. This is true not only of the unprecedented price drop “at the pump,” but in the many-faceted consumer expenditures for heating and air conditioning, in addition to the other myriad consumer users impacted by this price plunge………………………………………..Full Article: Source

Gold gains ahead of Chinese New Year

Posted on 17 February 2015 by VRS  |  Email |Print

Gold enjoyed its third straight session of gains on Monday with industry experts predicting a little more shine for the precious metal with the Chinese holiday period just around the corner. The price of spot gold rose by around $6 at the start of the session before easing back a little as European trading hours got under way. The price was at $1,232.40 per ounce by 12.30 p.m. GMT and has clocked a gain of over 4 percent since the start of the year.
Brad Gordon, the CEO of Acacia Mining - a gold mining business operating in Tanzania - said that the feeling in his industry was generally subdued but it is still optimistic that the price was about to head higher in the short-term………………………………………..Full Article: Source

Lower prices spur rare earths consumption, supply remains constrained – USGS

Posted on 17 February 2015 by VRS  |  Email |Print

Lower rare earths prices and the increased availability of rare-earth compounds led to increased US consumption in 2014, the US Geological Survey (USGS) has found. However, in its latest mineral commodity summary for the abundant group of 17 elements composed of scandium, yttrium and the lanthanides, the USGS noted that increased domestic output of separated rare-earth products was hampered by technical difficulties in the ramp up of new production capacity.
Despite increased global demand for rare earths in the permanent magnet and catalyst industries, prices for most rare-earth compounds declined in 2014 owing to an excess of inventory in the market, the organisation said………………………………………..Full Article: Source

Could Oil Still Drop To $20?

Posted on 16 February 2015 by VRS  |  Email |Print

Last week analysts at Citigroup slashed their forecast for crude oil to $20 a barrel before prices begin to recover. They see prices dropping to that point by the end of the first quarter or the beginning of the second quarter. The forecast is based on two points: the amount of crude oil in storage and the end of OPEC’s role as the so-called swing supplier.
WTI crude oil for March delivery closed at around $44 a barrel on January 29th and at $52.65 this past Friday, about where it traded before Citi’s forecast was published. Crude dipped to around $49 last Wednesday before climbing back up on Thursday and Friday………………………………………..Full Article: Source

Economist expects oil price rising in second half

Posted on 16 February 2015 by VRS  |  Email |Print

Oil prices are likely to increase in the second half of 2015 due to lesser investments in shale projects, says a senior economist. “Additional supplies of oil in the market will be gradually removed, which will contribute to higher oil prices in the second half of this year,” Said A. Al-Shaikh, group chief economist at the National Commercial Bank (NCB), said.
He was speaking on the sidelines of a press conference in Jeddah where Dun & Bradstreet South Asia Middle East Ltd. (D&B) in association with the NCB released the D&B Business Optimism Index (BOI) survey for Saudi Arabia for Q1, 2015. The BOI survey highlights mixed trends in the optimism levels of both the hydrocarbon and non-hydrocarbon sectors in Saudi Arabia………………………………………..Full Article: Source

Commodity prices go back to basics

Posted on 13 February 2015 by VRS  |  Email |Print

Commodity markets are going back to basics. Instead of moving up (or down) in lockstep with each other, and with other assets, they are beginning to show variation. The “backwardation” seen in some commodities is an indication of this change. Referring to conditions where it costs more to buy a commodity in the spot market than for future delivery, this is not a term you hear much in the commodities world these days.
Backwardation usually signals a tight near-term supply and demand situation. When supplies are plentiful and commodity prices are falling, prices tend to be in the opposite condition, known as “contango”………………………………………..Full Article: Source

IEA Sees Oil Prices Bottoming Out, But Not Surging Back To $100-Plus Levels

Posted on 13 February 2015 by VRS  |  Email |Print

The International Energy Agency says the price of crude, which plunged since June, will end fairly soon, but cautions oil producers that they won’t see a barrel of oil selling at over $100 as they did before the crash, the International Energy Agency (IEA) reports.
The cause of the decline was a case study in elementary economics: The supply of oil rose dramatically due to prodigious production in the United States, while sluggish economies, particularly in Europe and China, depressed demand. Now there is a glut, North American drilling is being curtailed and energy companies are slashing spending………………………………………..Full Article: Source

Gold Price Forecast For 2015

Posted on 13 February 2015 by VRS  |  Email |Print

At gold prices of $1,200/oz, nearly 40% of gold production is loss-making on an All-in Cost (AIC) basis. Supportive macroeconomic considerations will attract capital flows because of re-allocation of portfolio. Central bank purchases, abundant liquidity, geopolitical risks in Europe, Greek exit, delay in Federal Reserve Bank first interest rate hike and normalization of dollar may result in an upward gold.
The unwinding of retail and institutional gold investments, which acted as a substantial addition to the supply in 2014, seems to decline. Since 1972 to 2007 there have been 14 bull and 13 bear market cycles in Gold (20% rises/declines preceded by a 20% decline/rise)………………………………………..Full Article: Source

Falling Copper Prices Will Drag These 2 Stocks Lower

Posted on 13 February 2015 by VRS  |  Email |Print

With copper trading near six year lows, many traders are starting to wonder whether the bottom is near and whether a reversal could be in the cards over the coming months. From a fundamental perspective, the answer to traders’ question may come from China, which is the world’s largest customer.
Many investors are hoping that increased spending on infrastructure and power utilities will be enough of offset the declines in Chinese real estate. However, since more than 50% of the nation’s usage of copper stems from the real estate sector, there is little sign of a reversal any time soon………………………………………..Full Article: Source

Low oil price won’t spur global growth: Moody’s

Posted on 12 February 2015 by VRS  |  Email |Print

Lower oil prices will be sustained throughout 2015 but don’t expect any boost for the majority of the world’s countries, according to a global growth forecast from Moody’s Investor Service. “Lower oil prices, which we expect to be sustained, would in principle provide a significant boost to global growth,” Marie Diron, senior vice-president of Credit Policy at Moody’s and author of the agency’s “Global Macro Outlook 2015-16″ report published Wednesday.
“However, we are maintaining our G-20 forecast,” she said. “For the G-20 economies, we expect gross domestic product (GDP) growth of just under 3 percent each year in 2015 and 2016, unchanged from 2014 and from our November 2014 Global Macro Outlook,” Diron added………………………………………..Full Article: Source

Beware: The End of OPEC Could Mean a Plunge to $20 Oil

Posted on 12 February 2015 by VRS  |  Email |Print

Just when investors thought the oil rout was over, an analyst at Citi warned that the recent 20% rally in the price of oil is just a “head fake.” Worse yet, Citi sees the price of oil resuming its plunge and going all the way down to $20 per barrel. That’s quite the opposite view of many others as OPEC said it thinks that oil has already bottomed and could zoom higher while the International Energy Agency, or IEA, sees $55 oil being here to stay this year.
However, as we’ve seen in this market, anything is possible once OPEC steps aside. A big drop in the U.S. rig count over the past few weeks should lead to a slowdown in U.S. oil production growth, which has largely fueled the rally off the bottom in recent weeks………………………………………..Full Article: Source

IEA: New normal for oil as cheap prices fail to ignite demand

Posted on 12 February 2015 by VRS  |  Email |Print

The global oil market is entering a new phase where cheap oil is failing to ignite growth in demand, the International Energy Agency (IEA) says. Demand growth will remain sluggish because of fuel switching, more fuel-efficient cars, reduced oil subsidies and structural changes in the global economy, according to the IEA’s Medium-Term Oil Market Report.
Market dynamics suggest oil demand should increase strongly in response to falling oil prices, which have halved since last summer. But the IEA argues oil markets are entering a “business-as-unusual” phase, where the usual rules of supply and demand have changed………………………………………..Full Article: Source

OPEC prediction of $200 a-barrel-oil ignores market realities — or maybe not

Posted on 12 February 2015 by VRS  |  Email |Print

OPEC’s Secretary General Abdulla al-Badri announced that the oil price may have bottomed out and predicted “you will see more than $200 when it comes to future oil prices.” In the current reduced-oil-price environment, we see oil companies cut back on budgets, curtail exploration, and pull in rigs — in many places it costs more to get the oil out of the ground than the present sales price.
In today’s market for crude oil, a reduction in the number of drilling rigs in the United States does not mean overall production declines. It means less production in the future. Tim Snyder, an energy economist with Lubbock, Texas-based Pro Petroleum Inc., who analyzes trends to help his company and others make educated decisions and manage risk, told me: “We anticipate a decrease in ‘new’ production in the U.S. as exploration and production companies reallocate capital expenditures and reduce drilling exposure.”……………………………………….Full Article: Source

Gold price likely to end 2015 at $1,250/oz: Commerzbank

Posted on 12 February 2015 by VRS  |  Email |Print

Gold is likely to be trading at $1,250/oz and Eur1,200/oz by the end of 2015, Commerzbank said Wednesday. That implies the euro would be trading around $1.042 at the end of the year, Platts calculated, a level last seen early 2003 and compared with $1.130 at 1230 GMT.
The German bank noted the price of gold was up as much as 10% in parts of January, despite the firmer dollar, owing to a culmination of factors. “The gains were triggered by the announcement of extensive bond purchases by the European Central Bank, the surprising decoupling of the Swiss franc from the euro by the Swiss National Bank and the renewed flaring up of the Greek debt crisis following the election victory of Syriza,” it said………………………………………..Full Article: Source

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