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Commodities Briefing - Category | Price Watch more

Goldman Sachs, Barclays predict oil’s recovery to be a way off

Posted on 30 January 2015 by VRS  |  Email |Print

Those hoping for a quick recovery in the price of oil might end up being disappointed, with Goldman Sachs and Barclays forecasting the slump to continue for much of 2015. Barclays has slashed its forecast average price of Brent crude for this year to $US44 a barrel, down nearly $US30 from its early-December forecast of $US72 a barrel, before recovering to $US60 in 2016.
Goldman Sachs is forecasting WTI oil to trade about $US44 a barrel for the first three-quarters of this year, lifting to $US65 a barrel by the end of the year as sharp cuts in capital spending and rising demand weigh on supply………………………………………..Full Article: Source

Barclays, Goldman forecast bearish first half for oil prices

Posted on 29 January 2015 by VRS  |  Email |Print

Barclays Plc and Goldman Sachs Group Inc issued even more bearish forecasts for oil prices on Wednesday, predicting no significant recovery in the first half of 2015.
Barclays slashed its 2015 Brent crude oil price forecast to $44 a barrel from $72, while Goldman said it expected prices for West Texas Intermediate crude to trade close to $40 per barrel for most of the first half of 2015………………………………………..Full Article: Source

Crude oil bottom seen at $40: CNBC Fed survey

Posted on 29 January 2015 by VRS  |  Email |Print

Crude oil’s free fall may be close to bottoming, according to CNBC’s January Fed Survey. Wall Streeters in the survey forecast that the lowest price for WTI crude in the current downturn will be $40 on average per barrel, about $6 below its current price.
Among the 33 economists, money managers and investment strategists surveyed, the range of bottom estimates was $25 to $48. Crude oil futures have tumbled nearly 60 percent from the recent peak of $107 in June………………………………………..Full Article: Source

Former US Official Says OPEC Can No Longer Control Oil Price

Posted on 29 January 2015 by VRS  |  Email |Print

The Organization of the Petroleum Exporting Countries (OPEC) can no longer control the oil price, as there are new independent markets, such as those in Russia and the United States, Charles McConnell, a former Obama administration energy official told RIA Novosti.
“Forty years ago they [Middle Eastern oil producers] formed a cartel. And they controlled the price, and the entire world was dependent. And control from the Middle East is no longer true. The world has changed — Russia has and produces significant volumes of oil, as does the US and Canada,” he stated………………………………………..Full Article: Source

Oil’s price slump may have lasting impact on non-OPEC countries

Posted on 29 January 2015 by VRS  |  Email |Print

Crude prices dropped sharply Wednesday as global producers pump surplus supply into the world’s bulging storage tanks, resulting in record-high inventories in the United States. As the market focuses on the booming U.S. industry for signs of slowdown, analysts say the price slump may have a more pronounced and longer-lasting impact outside of North America, particularly in non-OPEC countries such as Russia, Mexico and Brazil.
Fuelled by $100 (U.S.)-a-barrel prices, crude production has grown sharply in the past two years among countries outside the Organization of the Petroleum Exporting Countries, after being in the doldrums – other than in Canada and the United States – following the price collapse of 2008-09………………………………………..Full Article: Source

LBMA forecasters see gold averaging $1,211/oz this year

Posted on 29 January 2015 by VRS  |  Email |Print

The gold price will remain broadly flat in 2015 after a 28-percent fall last year, according to 35 bullion market analysts polled by the LBMA, but silver, platinum and palladium should rise as much as 5.6 percent. In gold, Ross Norman of Sharps Pixley is the most bullish analyst, forecasting an average price $1,321 per ounce this year, while Adam Myers of Credit Agricole the most bearish with a prediction of $950.
Averaging out the 35 forecasts, gold will trade at a mean of $1,211 per ounce and in a range of $1,085-1,356 this year, the LBMA said in its Forecast 2015 report. “Factors which are likely to restrain gold prices in 2015 include[e] the possible strengthening in the US dollar, interest rate hikes by the Fed in the second half of 2015, QE programmes in Europe and a weak oil price reducing gold’s attraction as a hedge against inflation,” it said……………………………………….Full Article: Source

Spot gold prices lower after verdict

Posted on 29 January 2015 by VRS  |  Email |Print

Spot gold prices were little changed on Wednesday after the Federal Reserve signaled that it would remain patient when it comes raising interest rates.
In a statement after its latest policy meeting, the Fed made clear that no rate increase is imminent. Chair Janet Yellen said after last month’s meeting that by saying it would be “patient,” the Fed was signaling there would be no rate increase for at least two meetings………………………………………..Full Article: Source

Zinc and nickel price upside ‘imminent’: Clarus

Posted on 29 January 2015 by VRS  |  Email |Print

There has been a lot of bullish talk in the metals community about zinc and nickel over the past couple of years, as many insiders believe those commodities are poised for a rally. You can include Clarus Securities analyst Mike Bandrowski in that group. He published a detailed note on Tuesday that suggests zinc and nickel have “imminent” upside and will perform very strongly over the next two years as inventories disappear.
In the case of zinc, Mr. Bandrowski noted the market is already in deficit, and that deficit should get bigger following the closures of the Lisheen and Century mines this year. He said exchange inventories have fallen by more than half over the last two years and should be at “critical” levels later in 2015………………………………………..Full Article: Source

Oil price ‘too low’: Saudi Aramco chief

Posted on 28 January 2015 by VRS  |  Email |Print

World oil prices have fallen too far, the president of state-owned energy giant Saudi Aramco said, insisting that market forces, not deliberate production cuts, must take their course. “It’s too low for everybody,” Khalid al-Falih told a conference. “I think even consumers start to suffer in the long term.”
Falih also said American shale oil production is important for the world’s long-term energy future and Saudi Aramco has marked an additional US$7 billion for its own shale projects. Saudi Aramco is the world’s largest oil company in terms of crude production and exports………………………………………..Full Article: Source

Budget: Iraq lowers oil price forecast to $55

Posted on 28 January 2015 by VRS  |  Email |Print

Falling oil prices forced Iraq’s cabinet to revise its draft 2105 budget, trimming its forecast for oil to $55 a barrel from $60. It trimmed spending to 119 trillion Iraqi dinars ($105 billion) for 2015. Even so, the budget deficit will rise to 25 trillion dinars.
The decision to lower the forecast oil price may satisfy some MPs who saw the previous estimate as unrealistic, but Brent crude is trading still lower at under $50, down from $115 in June. Prime Minister Haider Al-Abadi said last week he feared lower revenues from falling global oil prices could hurt Iraq’s military campaign against Islamic State………………………………………..Full Article: Source

World price of oil - where is OPEC now?

Posted on 28 January 2015 by VRS  |  Email |Print

The world price of crude oil, which has been around 100 dollars a barrel for the past 6 years, has suddenly collapsed and is now tending below 50 dollars. Many are trying to understand this rapid decrease and have proposed various explanations.
Of course, the ready explanation is simply in terms of supply and demand; but this just begs the question. The supply of oil has increased sharply in recent months – mainly because of the prolific production of shale oil in the United States, thanks to the technologies of fracking and horizontal drilling. In fact, the US is now the world’s largest producer of crude oil and US imports of oil have dropped to the lowest level in 10 years………………………………………..Full Article: Source

Why $50 Oil Won’t Last

Posted on 28 January 2015 by VRS  |  Email |Print

In the past few weeks I have received numerous questions about the role of a “drop in demand” in the oil price decline. These questions are driven by many stories in the media that have referenced a drop in demand. There are two primary reasons given for this so-called demand drop. One is that years of high oil prices have resulted in reductions in consumption through conservation and improvements in vehicle fleet efficiency.
The second reason is due to the strengthening dollar, oil has become more expensive for many countries since oil is generally traded in dollars. There are elements of truth behind both reasons. There has indeed been reduced oil consumption in recent years in most developed regions of the world. It is also true that the dollar has strengthened against many currencies………………………………………..Full Article: Source

China slowdown may further deflate commodity prices

Posted on 27 January 2015 by VRS  |  Email |Print

Slowing GDP growth in China is leading to weaker demand for commodities, contributing to lower global commodity prices, QNB has said in a report. According to the Chinese National Bureau of Statistics (NBS), real GDP growth slowed to 7.4% in 2014, below the government target of 7.5% and the slowest annual growth rate in 24 years.
To boost growth, the government is trying to push the economy towards a more consumption-led growth model, but this could take some time, QNB said. The IMF expects the slowdown to continue, which could push commodity prices down further in 2015 and beyond. This will add to the deflationary pressures that are threatening the global economic recovery………………………………………..Full Article: Source

Where’s the oil price outrage?

Posted on 27 January 2015 by VRS  |  Email |Print

When gasoline prices spiked in 2005 after Hurricane Katrina, Congress and the public demanded a federal probe of price manipulation. The same thing happened three years later, when oil prices shot to $145 a barrel and gas prices topped $4 a gallon.
But now that prices are moving in the other direction — down more than 50% per barrel in about six months — virtually no one is clamoring for an investigation. As Bob Dole memorably put it in his presidential campaign, where’s the outrage?……………………………………….Full Article: Source

OPEC minister sees oil price floor at $45

Posted on 27 January 2015 by VRS  |  Email |Print

An OPEC official predicted that oil prices had bottomed out on Monday, briefly raising hopes that the steep slide might be easing. West Texas Intermediate crude, the benchmark contract in the U.S., moved up early in the morning, but ended the day down 45 cents at $45.16 US a barrel at mid-afternoon on Monday, while Brent crude was down 67 cents at $48.12. Western Canada Select oil is now at $31.81.
“Now the prices are around $45-$55 and I think maybe they reached the bottom and will see some rebound very soon,” Abdullah al-Badri, Secretary-General of OPEC, said in an interview on Monday………………………………………..Full Article: Source

OPEC’s El-Badri: $200 Oil Possible If There’s Lack of Investment

Posted on 27 January 2015 by VRS  |  Email |Print

OPEC’s secretary-general said oil prices as high as $200 a barrel are possible if producers fail to invest in new supply. “If you don’t invest in oil and gas, you will see more than $200,” Abdalla El-Badri said in an interview in London on Monday, without giving a timeframe. West Texas Intermediate, the U.S. crude benchmark, erased a decline of as much as 2.7 percent following his comments.
Crude prices tumbled 46 percent last year as Saudi Arabia and other members of the Organization of Petroleum Exporting Countries said they wouldn’t curb output in response to a supply glut caused in part by surging U.S. shale oil production………………………………………..Full Article: Source

Oil Is Never Going To Reach $200, Not For Any Length Of Time At Least

Posted on 27 January 2015 by VRS  |  Email |Print

We’ve two interesting announcements from various players in Opec today, one that the oil price might have hit bottom just at the moment and the second that oil might reach $200 at some point in the future. It’s possible that oil might have reached bottom: but the idea that oil will ever reach $200 a barrel in real terms for any significant length of time is extraordinarily unlikely.
It’s as if people really still don’t get the deep economic change that has happened in the oil market as a result of the fracking revolution. We are simply no longer in a world where the development of an oil field is a tens of billions of dollars problem taking a couple of decades to bring to fruition. Because we’re no longer in that world we’re simply not going to end up with the sort of supply and demand mismatches that could lead to a $200 oil price………………………………………..Full Article: Source

Goldman cuts base metal price forecasts, ups gold

Posted on 27 January 2015 by VRS  |  Email |Print

Goldman Sachs Group Inc on Friday slashed its 2015 price forecasts for several base metals including copper and aluminium while raising its estimate for gold by $62 per ounce. “The primary reason for the changes to our forecasts is cost deflation – driven by a combination of actual and anticipated U.S. dollar strength, cheaper energy and other input costs, and our expectation of an improvement in mining productivity,” Goldman Sachs said.
Weaker-than-expected Chinese and European demand has also contributed to the deflationary environment, it added. Goldman cut its 2015 average copper price forecast to $5,542 per tonne from $6,400, and aluminium to $1,788 per tonne from $2,075………………………………………..Full Article: Source

Who needs a ‘long-term economic plan’ when the oil price is falling like this?

Posted on 26 January 2015 by VRS  |  Email |Print

The Tories must know their strategy has failed. But, unlike the governments of the 1970s, the energy market has saved them. I have taken part in many a pub discussion about the perennial question of whether governments lose elections or oppositions win them, or a mixture of both. If ever a postwar British government deserved to lose an election it is this one. That is why the Labour party has got to get its act together, and soon.
The gravamen of the charge against this government is that, for all the triumphalism about a long-delayed period of economic growth, it woefully mishandled the economy when it came in – and plans an assault on our already deteriorating public services, if it is re-elected, that would quite seriously threaten the social fabric of the nation………………………………………..Full Article: Source

Why Oil Prices May Not Recover Anytime Soon

Posted on 26 January 2015 by VRS  |  Email |Print

Oil prices have collapsed in stunning fashion in the past few months. The spot price of Brent crude reached $115 a barrel in June, and was above $100 a barrel as recently as September. Since then, it has plummeted to less than $50 a barrel.
There is a sharp split among energy experts about the future direction of oil prices. Saudi Prince Alwaleed bin Talal recently stated that oil prices could keep falling for quite a while and opined that $100 a barrel oil will never come back. Earlier this month, investment bank Goldman Sachs weighed in by slashing its short-term oil price target from $80 a barrel all the way to $42 a barrel………………………………………..Full Article: Source

Despite higher gold price Chinese demand still surging

Posted on 26 January 2015 by VRS  |  Email |Print

The latest SGE withdrawal figures show withdrawals of 70 tonnes for the week ending Jan 16th – the third highest weekly figure ever. The recent rise in the gold price, now standing at just below the $1300 mark, does not yet appear to have put a dent in Chinese gold demand as represented by withdrawals from the Shanghai Gold Exchange (SGE).
Indeed it appears to be picking up even further in the weeks ahead of the Chinese New Year which falls on February 19th this year. If demand continues at the current rate, January will be a very strong month indeed despite the loss of a few trading days at the beginning of the month for the calendar New Year………………………………………..Full Article: Source

All of the major commodities may fall in price this year, World Bank says

Posted on 23 January 2015 by VRS  |  Email |Print

This year could mark the rare occurrence when all of the nine major commodity price indexes decline, according to a World Bank forecast released Thursday. The latest report on commodities comes at a time when oil prices have seen a 55% drop over the past seven months, only topped by the 75% drop during the Great Recession, and the 67% drop from November 1985 to March 1986.
John Baffes, senior economist in the World Bank’s development prospects group, says he hasn’t seen a decline in all of the major commodities simultaneously in at least the past 12 years. Though changes in index composition make comparisons difficult, the last time there was the simultaneous decline could have been the Asian financial crisis or the downturn in 1984 and 1985………………………………………..Full Article: Source

Oil price could spike to US$200 a barrel

Posted on 23 January 2015 by VRS  |  Email |Print

Rampant speculation by hedge funds and a rare confluence of short-term shocks have driven the price of oil far below its natural clearing level, coiling the springs for a fresh spike this year that may catch markets badly off guard once again. “The price will rebound and we will go back to normal very soon,” said Abdullah Al-Badri, Opec’s secretary-general. “Yes, there is an oversupply, but fundamentals don’t justify this 50% fall in price.”
Claudio Descalzi, chief executive of Italy’s oil giant ENI, said the last phase of the price crash from US$75 a barrel to around US$45 was driven by wild moves on the derivatives markets. “What we need is stability: a central bank for oil. Prices could jump to US$150 or even US$200 over the next four or five years,” he said………………………………………..Full Article: Source

This is the price point to beware for falling oil

Posted on 23 January 2015 by VRS  |  Email |Print

Many investors believe that declining oil prices are a good thing—for now—though some see $30 a barrel as the break point when the trend turns negative. Earnings season has provided a good glimpse at how energy is impacting corporate America. Outside the sector, this is turning into a pretty good quarter. Include energy, though, and things are fairly gloomy.
About 75 percent of S&P 500 companies that reported through Wednesday beat sharply lowered analyst expectations, according to S&P Capital IQ. That’s come, however, amid a brutal quarter for energy companies, with the sector projected to show a 22.6 percent profit decline………………………………………..Full Article: Source

OPEC’s Badri says oil won’t fall to $20: Bloomberg

Posted on 23 January 2015 by VRS  |  Email |Print

Oil prices will not fall to $20 or $25 a barrel, OPEC Secretary-General Abdullah al-Badri said in an interview with Bloomberg. “The price will not go to $20 or $25, I think the price will stay at where we are now,” Badri said, Bloomberg reported.
Producers outside the Organization of Petroleum Exporting Countries (OPEC) should be first to reduce their output to remove a global surplus, Badri said, rather than OPEC. OPEC decided against cutting its own output at a meeting in November, a move that helped to extend a slide in oil prices………………………………………..Full Article: Source

Gold reclaims $1,300 level as ECB rolls out QE

Posted on 23 January 2015 by VRS  |  Email |Print

Gold prices strengthened Thursday to reclaim the key $1,300 mark after the European Central Bank announced a full-blown stimulus plan. Gold for February delivery rose $7, or 0.5%, to settle at $1,300.70 an ounce while March silver futures SIH5, -0.03% advanced 17 cents to $18.36 an ounce in electronic trading.
On Thursday, ECB President Mario Draghi announced an open-ended bond-buying program worth €60 billion a month as part of its quantitative easing program. The central bank said it won’t buy more than a third of any issuer’s debt………………………………………..Full Article: Source

Declining Commodity Prices Ahead With Weak Global Economy

Posted on 22 January 2015 by VRS  |  Email |Print

Oil may be holding above $40.00 per barrel, but investors shouldn’t get too comfortable. The chart foreshadows oil prices could falter and maybe even drop below $40.00. It’s true that speculation has influenced the direction of oil to some degree, but much of the negative sentiment has to do with a declining global economy that shows some despair.
And while gross domestic product (GDP) growth in the U.S. is pretty decent, what we are witnessing in the global economy cannot be saved by what is happening domestically. That suggests weaker oil prices ahead—along with weaker commodity prices overall………………………………………..Full Article: Source

IEA economist sees upward pressure on oil prices by year-end

Posted on 22 January 2015 by VRS  |  Email |Print

Oil prices will face upward pressure by the end of the year, the chief economist of the International Energy Agency (IEA) said on Wednesday, as a fall of more than 50 percent in the price of crude since last June is expected to eventually curtail some production.
Fatih Birol of the IEA was appearing on a panel with OPEC Secretary General Abdullah al-Badri at the World Economic Forum in Davos, Switzerland. Badri argued that OPEC oil producers were right not to cut production despite the price fall………………………………………..Full Article: Source

Gold above $1,300 for first time in 5 months

Posted on 22 January 2015 by VRS  |  Email |Print

Gold prices have risen above $1,300 an ounce for the first time since August 2014. It’s because the global economic slowdown, expectation of ECB ‘easy money’, and currency volatility make investors turn to a safe haven, gold trader Mark O’Byrne told RT.
The spot price has jumped by 1.5 percent to $1,303.63 for an ounce on Wednesday early trading. February futures rose by 1.2 percent to $1,292.50 an ounce on the New York Comex. Last week the price rose by 4.7 percent for the first time since 2013. Gold has added 10 percent to its value since the beginning of the year………………………………………..Full Article: Source

Average Oil Price per Barrel in 2015 is Expected at $56.7 — IMF

Posted on 21 January 2015 by VRS  |  Email |Print

The IMF expects this year the average price of oil on world markets to hover around $56.73 per barrel, and in the future — $63.88, the agency reported on Tuesday at the World Economy prospects presentation in Beijing. The average price was determined by simple arithmetic — by taking the average prices of Brent, Dubai and West Texas oil. For the sake of comparison, the report mentioned that the average price of oil in 2014 was $96.3 per barrel.
The commentary to the report provides background to the falling oil prices, for example that since September 2014, the price of oil fell by approximately 55%. This decrease is a result of the unexpected low demand for oil in some major economies, especially in the emerging markets………………………………………..Full Article: Source

Is the Oil Price Collapse Temporary?

Posted on 21 January 2015 by VRS  |  Email |Print

What can we expect from the oil price in next six months and beyond? And what impact does this have on the expectations for global growth. If the collapse of crude oil quotes was temporary, it would only add noise to the global economic landscape and, apart from fuelling volatility, would have no lasting consequences.
Yet, there are reasons to believe the fall is not temporary. As Saudi Arabia has made crystal-clear, its strategy is to preserve global market share, not support market prices. This is rational: back in the early 1980s, Saudi Arabia did the opposite, cutting production to support prices, thereby subsidising its competitors, especially outside OPEC. Only in late 1985 did Saudi Arabia reverse gears and double production to regain market power………………………………………..Full Article: Source

Iran Sees ‘No Threat’ From Oil at $25 as Prices Keep Falling

Posted on 21 January 2015 by VRS  |  Email |Print

OPEC has no immediate plan to cut its output target for crude, and Iran is strong enough to withstand a deeper slump in prices even if the country must sell at $25 a barrel, Oil Minister Bijan Namdar Zanganeh said.
“If the oil prices drop to $25 a barrel, there will yet again be no threat posed to Iran’s oil industry,” Zanganeh told reporters on Jan. 19 at a conference in Tehran, according to the state-run Fars news agency………………………………………..Full Article: Source

Low Oil Prices Force OPEC Members To Rethink 2015 Budgets

Posted on 21 January 2015 by VRS  |  Email |Print

The persistent drop in oil prices is prompting more oil-rich OPEC countries to revise the projected revenues in their coming budgets. Already, Saudi Arabia, the world’s largest producer of oil and OPEC’s richest member, has acknowledged that the steep fall in oil prices since June will leave the Riyadh government with its first budget deficit since 2011 and the largest in its history.
The Saudi budget, announced on Dec. 25, will include spending during fiscal 2015 of $229.3 billion, higher than in 2014, despite revenues estimated at only $190.7 billion, lower than in the current fiscal year. That would leave a deficit of $38.6 billion………………………………………..Full Article: Source

Former Saudi oil boss says it can cope with low price

Posted on 20 January 2015 by VRS  |  Email |Print

Saudi Arabia can cope with low oil prices for “at least eight years”, Saudi Arabia’s minister of petroleum’s former senior adviser has told the BBC. Mohammed al-Sabban said the country’s policy was to defend its current market share by enduring low prices.
“You need to allow prices to go as low as possible in order to see those marginal producers move out of the market,” he said. Mr al-Sabban advised the ministry for 27 years, leaving last year………………………………………..Full Article: Source

As oil prices plunge the politics are pivotal

Posted on 20 January 2015 by VRS  |  Email |Print

The oil price collapse has taught us a lesson about the dangers of overestimating the influence of political machinations on markets. The assumption that politics, whether Saudi manipulation or collusion in the Opec oil producers’ cartel, would keep prices eternally above $100 a barrel was proved wrong. Now people are flipping to an opposite view, where market forces are king and politics no longer matters.
Instead of reading the tea leaves in Riyadh and Vienna, they are focusing narrowly on how commodities and capital markets will adjust to low prices — which in isolation is just as wrong and just as dangerous………………………………………..Full Article: Source

LBMA top gold forecaster: gold price to average $1,321 in 2015, silver $18.56

Posted on 20 January 2015 by VRS  |  Email |Print

LBMA’s top gold forecaster over the years, Sharps Pixley’s Ross Norman, is bucking the analyst consensus with a $1,321 average gold price forecast for 2015. Silver $18.56, Platinum $1,268, Palladium $876.
In his submissions to this year’s LBMA precious metals forecasting competition, Ross Norman who heads up London bullion broker Sharps Pixley, and who has been probably the most successful forecaster in the LBMA panel in the past, says he is going out on a limb with his forecast for the gold price average this year at $1321………………………………………..Full Article: Source

Gold price fall as demand drops

Posted on 20 January 2015 by VRS  |  Email |Print

Gold prices were lower in Europe Monday, settling lower on reduced physical demand after the highs of the previous week. Spot gold was near its 18-month high at $1,276.30 a troy ounce in morning European trading, down 0.3 per cent.
“Physical demand is likely to diminish with prices now elevated,” said Jonathan Butler, a precious metals strategist at Mitsubishi. In addition, the Martin Luther King national holiday in the US meant volumes were thinner. Palladium is hovering near three-month lows - having touched an intra-day low of $US752.26 - despite the underlying supply and demand landscape being in good shape………………………………………..Full Article: Source

Gold to average $1,252 in ’15, silver $17.63 – FastMarkets’ Adams

Posted on 20 January 2015 by VRS  |  Email |Print

FastMarkets analyst William Adams is mildly bullish on gold this year, he said in his yearly forecast, because of a host of geopolitical risks and an over-extended dollar. The gold price will average $1,252 per ounce in 2015 between a high of $1,292 and a low of $1,172, he said. The yellow metal was last around four-month highs at $1,276.20/1,277.10.
“The drivers in the gold market have over the past two years switched from institutional investor interest to physical demand from fabricators and investors in bars and coins,” Adams said. “During this period, confidence in the financial system has been restored while safe-haven demand has fallen. With equity markets setting all-time highs, the opportunity cost of holding gold has increased.”……………………………………….Full Article: Source

Asia alumina: Stable at $352/mt; buyers, sellers stand back

Posted on 20 January 2015 by VRS  |  Email |Print

The Platts Australian alumina daily assessment at $352/mt FOB was unchanged Monday from Friday, as buyers and sellers were treading water. The Australian market has been tracking China’s domestic prices, as China remains the largest prospective net buyer in the international open market.
In the last week, there have been signs of interest and material to be had, but no immediate signs of active buyers or sellers. Price discussions in Asia have momentarily been CIF China driven rather than FOB Australia………………………………………..Full Article: Source

Oil price collapse set to end this year, claims IEA

Posted on 19 January 2015 by VRS  |  Email |Print

The oil price rout could end in the second half of the year, according to the International Energy Agency, which believes that “signs are mounting that the tide will turn”.
The agency, which represents the world’s largest energy-consuming nations, said that it expected a slowdown in oil output growth from non-Opec producers, which in turn would help to ease the global glut in crude………………………………………..Full Article: Source

No oil price recovery yet despite U.S. shale slowdown: IEA

Posted on 19 January 2015 by VRS  |  Email |Print

Oil prices may have further to fall and a rebound could take some time, despite increasing signs that the downtrend will end, possibly in the second half of this year as North American supply growth slows, the West’s energy watchdog said on Friday.
Crude oil prices have fallen almost 60 percent over the last six months with both of the world’s crude oil benchmarks now trading below $50 a barrel as supplies of high quality, light oil from the United States and Canada have overwhelmed demand at a time of lacklustre global economic growth………………………………………..Full Article: Source

OPEC’s Future Seen in Mining Slump as Oil Price Pummeled

Posted on 19 January 2015 by VRS  |  Email |Print

Oil producers reluctant to curb output even as prices tumble to five-and-a-half year lows don’t need to guess what the future holds. They can ask a miner.
In coal to iron ore markets, suppliers have raised volumes even as prices slumped, boosting global gluts and jeopardizing profits as the most dominant players seek to maintain revenue and squeeze out higher cost rivals………………………………………..Full Article: Source

Gold rallies smartly, targets $1,300

Posted on 19 January 2015 by VRS  |  Email |Print

It was a spectacular week for gold. The metal gained 4.6 per cent to close at $1,280/ounce. The decision by the Swiss National Bank to let the Swiss franc rise against the euro and to cut interest rates to a negative 0.75 per cent stoked demand for gold.
The US SPDR Gold Trust, the largest gold-backed exchange traded fund, saw its holdings rise by over 23 tonnes to 730.89 tonnes in the week. The US dollar index moved to hit a high of 93.26, but closed at 92.5, only marginally higher from the previous week’s close. The rally in the Swiss franc and the disappointing numbers from the US pegged the greenback lower………………………………………..Full Article: Source

Gold price rally driven by safe-haven status

Posted on 19 January 2015 by VRS  |  Email |Print

Gold prices extended their rally to lock in a 5 per cent gain for the week as worries about global growth and turbulence in currency markets spurred investment demand for haven assets.
Gold for February delivery, the most actively traded contract, rose $US12.10, or 1 per cent, to $US1276.90 an ounce on the Comex division of the New York Mercantile Exchange. This was the highest settlement price since August 29 and the biggest weekly gain since July 2013………………………………………..Full Article: Source

Copper: Not wired for price revival

Posted on 19 January 2015 by VRS  |  Email |Print

Copper prices, which avoided a meltdown in 2014, are being hammered since the start of 2015. Copper prices on the London Metal Exchange (LME) dropped 15 per cent in 2014 to $6,400 a tonne; this is not a bad show, given that other metals such as iron saw their prices cut in half. It not just belied analyst expectations last year of a price revival, but has dropped to a low of $5,500 a tonne currently.
Weakness to continue: Even after such a steep drop, copper prices may continue to remain soft in 2015 due to three factors — unfavourable demand-supply dynamics, strengthening dollar and falling crude prices. These reasons could keep copper from clawing back any gains this year………………………………………..Full Article: Source

Warning: China may trigger fresh rout in commodities

Posted on 16 January 2015 by VRS  |  Email |Print

Commodities just can’t catch a break – and China’s upcoming gross domestic product (GDP) release on January 20 could throw another punch at the beleaguered asset class should it underperform expectations, warn analysts.
“We are days from the release of China’s Q4 GDP and copper is the best barometer of growth. The rout gives me reason to believe China’s growth is not only moderating but is slowing faster than estimated,” Evan Lucas, market strategist at IG wrote in a note. “If China disappoints next Tuesday, brace for a real rout in commodities,” he said………………………………………..Full Article: Source

What is the future direction of oil prices?

Posted on 16 January 2015 by VRS  |  Email |Print

Economics and history suggest that today’s $50 price should be viewed as a probable ceiling for a much lower trading range, which may stretch all the way down toward $20. If one number determines the fate of the world economy, it is the price of a barrel of oil. Every global recession since 1970 has been preceded by at least a doubling of the oil price, and every time the oil price has fallen by half and stayed down for six months or so, a major acceleration of global growth has followed.
Having fallen from $100 to $50, the oil price is now hovering at exactly this critical level. So should we expect $50 to be the floor or the ceiling of the new trading range for oil?……………………………………….Full Article: Source

UBS lower 2015 gold price forecast, others also revised downward

Posted on 16 January 2015 by VRS  |  Email |Print

UBS has downgraded its average gold price forecast for gold largely because of greater downside risks stemming from lower oil prices and the implied absence of an inflation threat, it said. The broker lowered its 2015 gold price forecast to $1,190 from $1,200 – the spot metal price was last at a little-changed $1,228/1,228.70 per ounce.
“While the expected price direction remains the same, the magnitude of our previous price expectations was too aggressive and needed to be revised lower,” it said in a release on Thursday. “Fed [monetary policy] normalisation and dollar strength are considerable hurdles for gold, but reduced market length and the fact that much of the adjustment had already been made in the last couple of years should help limit the force behind a move lower,” it added………………………………………..Full Article: Source

ANZ: Falling Commodity Prices Will Not Help Global Growth

Posted on 15 January 2015 by VRS  |  Email |Print

ANZ’s head of market strategy Richard Yetsenga reckons there is more going on in global commodities than just the dynamics of supply and demand. He says even though there has been a big focus on the interaction of supply and price in the big price crashes of iron ore and crude oil, the broad-based nature of the commodity rout means US dollar liquidity is playing a big part in the falls.
Yetsenga says: While the focus in the past year has largely been on individual commodities — iron ore, coal, oil and increasingly copper — it has become a much broader story than that………………………………………..Full Article: Source

$50 Per Barrel May Be The New Ceiling For Oil Prices

Posted on 15 January 2015 by VRS  |  Email |Print

If one number determines the fate of the world economy, it is the price of a barrel of oil. Every global recession since 1970 has been preceded by at least a doubling of the oil price, and every time the oil price has fallen by half and stayed down for six months or so, a major acceleration of global growth has followed.
Having fallen from $100 to $50, the oil price is now hovering at exactly this critical level. So should we expect $50 to be the floor or the ceiling of the new trading range for oil?……………………………………….Full Article: Source

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