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What’s behind the gold price rally, and will it hold?

Posted on 12 August 2016 by VRS  |  Email |Print

High demand, stock market valuations, stingy bond yields and unorthodox monetary policy may be stoking the rally, which seems to have legs. There are seemingly endless theories to explain the stunning gold-price rally this year, and most of them support more of the same for the precious metal.
Global gold demand reached 2,336 tons through the first six months of the year, led by investment demand — representing a record 1,064 tons — according to the World Gold Council. That growing demand has driven the price of gold up 27% this year, marking the best first-half performance since 1980………………………………………..Full Article: Source

Nickel, tin retreat from highs as speculators book profits

Posted on 12 August 2016 by VRS  |  Email |Print

Nickel, zinc and tin fell on Thursday, retreating from fresh peaks hit in the previous session as speculators booked profits from strong rallies so far this year. All three metals on the London Metal Exchange rallied on Wednesday to their highest since 2015 as a weaker dollar and a greater risk appetite spurred buying in the metals that have the brightest fundamental outlooks for this year.
“It’s a relatively quiet day in terms of the macro side and the metals have had a very good run since the start of the year, so it’s not too surprising to see some of them off today,” said Sergey Raevskiy, analyst at boutique investment bank SP Angel………………………………………..Full Article: Source

Glencore’s Production Cuts Don’t Always Raise Commodities Prices

Posted on 12 August 2016 by VRS  |  Email |Print

Glencore PLC on Thursday reported lower production of copper, coal and zinc in the year’s second quarter as it continued to try to lift prices through output cuts, though results have been mixed.
The Swiss-based mining and trading giant is among the world’s largest producers of those metals, so with commodity prices and the company’s shares plumbing new depths last year, Glencore launched a plan to shut in production. That’s something Chief Executive Ivan Glasenberg had long urged other miners to do………………………………………..Full Article: Source

Oil markets are falling into a bear trap and it’s way overdone: RBC

Posted on 11 August 2016 by VRS  |  Email |Print

Oil markets have been prone to over-bearishness of late with fears over supply returning to the market largely “overdone,” according to the latest oil market analysis by RBC Capital Markets.
Oil prices are oscillating on hopes that a rebalancing is taking place in the markets and fears of a continuing global oversupply – and the potential for more oil to return to the market from the likes of Libya and Nigeria, producers which have seen supply disruptions. Helima Croft, RBC’s head of commodity strategy and commodity strategists Michael Tran and Christopher Louney said in a note on Wednesday that market caution was overdone, however………………………………………..Full Article: Source

Here’s One Reason for Optimism on Oil Prices

Posted on 11 August 2016 by VRS  |  Email |Print

Hedge funds are betting that swelling inventories will help push the price of oil lower, but this glut still looks milder than past bearish cycles in crude. The price of oil has fallen roughly 14% since its most recent peak in June, as investors worry that large stocks of gasoline and crude, coupled with the continued strength of global production, will put pressure on this market.
The gasoline glut could hurt profits at refineries, pushing them to buy less oil, some investors say. More than 40% of the bets made by “managed money,” mostly hedge funds, are for the price of the U.S. benchmark—West Texas Intermediate—and petroleum products to fall, according to data from the U.S. Commodity Futures Trading Commission………………………………………..Full Article: Source

OPEC upbeat on demand as oil basket posts first fall in five months

Posted on 11 August 2016 by VRS  |  Email |Print

OPEC upgraded its forecast for 2016 oil demand growth on Wednesday, in a report that may dampen hopes for a deal on a production freeze at its meeting next month. In its August report, OPEC forecast demand growth of 1.22 million barrels a day (mb/d) year on year, which was 30,000 barrels higher than forecast in July.
The new forecast would put global oil demand across 2016 at 94.26 mb/d. OPEC, which represents 14 major oil-producing countries, attributed the upgrade to better-than-expected economic performance in advanced European economies and some Asian ones, including India, in the first half of the year………………………………………..Full Article: Source

Oil: Watch $35 A Barrel, Morgan Stanley Says

Posted on 10 August 2016 by VRS  |  Email |Print

Oil prices have risen in four out of the past five sessions since dipping under $40 a barrel last week. Morgan Stanley’s research team led by energy strategist Adam Longson says not to get too comfortable. “Fundamental oil issues have not been addressed,” he says. “Physical oil markets likely need to get worse before they get better.”
“Physical market stress due to fundamental headwinds is still ahead. A profit-taking and short-covering bounce in oil late in the week (partly on a US gasoline draw driven by lower imports) has led some to declare that the troubles in oil are behind us………………………………………..Full Article: Source

This oil bear says prices are headed back below $30

Posted on 10 August 2016 by VRS  |  Email |Print

Oil bulls were relieved when Brent crude rallied in recent days after having fallen nearly 20% from its recent peak above $52. But those who expect oil to retake those highs may be sadly disappointed, and indeed oil prices fell modestly on Tuesday. One prominent industry observer, who has been consistently bearish on oil for the last two years, says crude prices have only one way to go — down, way down.
Stephen Schork, editor of The Schork Report, based in Radnor, Pa., attributes the recent rally, in which crude prices doubled from their mid-$20s lows in January and February, to a massive short squeeze………………………………………..Full Article: Source

Bullish prediction put gold price at US$1,500 by year end

Posted on 10 August 2016 by VRS  |  Email |Print

Despite the global mining industry witnessing three continuous years of slump arising mainly from the plummeting commodity prices, especially gold, latest bullish prediction has it that gold is likely to hit US$1,500 by close of the year.
According to General Secretary of the Mineworkers’ Union, Prince William Ankrah, the upward surge is certainly good news for the industry even though bearish commentary ascribes the recent jump to two factors, namely; the British exit from the EU, and the quantitative easing by the US Federal Reserves, which they posit could be short-lived………………………………………..Full Article: Source

Why Silver Prices Could Crash Soon if They Don’t Break Out of This Range

Posted on 10 August 2016 by VRS  |  Email |Print

From Taki Tsaklanos: with silver prices at a critical juncture, we’ll soon get confirmation of whether the metal is in a cyclical bull market or a secular bear market. Silver has acted very strong in 2016. However, silver miners have been the real deal.
We observe some potentially concerning facts when it comes to the metals. First and foremost, the whole world is favoring precious metals, which is, from a sentiment point of view, a red flag. From a chart perspective, we see that silver has reached an incredibly important area right. It is no surprise that three trendlines of secular importance coincide within that area………………………………………..Full Article: Source

Goldman and Barclays Warn Of Long-Term Bear Market in Copper

Posted on 10 August 2016 by VRS  |  Email |Print

Goldman Sachs Group Inc. (GS) forecasts that copper prices may slump to $4,000 a metric ton over the next 12 months, as supplies from mines is picking up at rapid pace. Compared to the present day price of around $4,800 per metric ton, Goldman predicts that prices will progressively drop to $4,500 in three months, then to $4,200 in six months before finally settling at around $4,000 in a year’s time.
This would translate to a steep decline of around 17% over the next 12 months. While prices of other base metals like nickel and zinc have appreciated based on forecasts of global shortage, an increased supply has been reported in copper during the first half of 2016. Nickel and zinc prices surged by around 20% and 40%, respectively, while copper’s stagnated at around 2%………………………………………..Full Article: Source

Oil prices: OPEC may finally take action if crude’s slide continues

Posted on 09 August 2016 by VRS  |  Email |Print

Oil’s recent dip back into the $30s per barrel may be enough to get some OPEC members to curb their bickering and consider joint action — especially if oil plummets again. Considering a deal and agreeing to one are two different things, but talk that the cartel would discuss its options sparked a rally in oil prices Monday.
“All of a sudden, the price narrative was divergent from the OPEC message. They see the wisdom of changing the rhetoric … It’s no surprise they’d go back to the playbook that worked successfully,” said RBC’s head of commodity strategy Helima Croft………………………………………..Full Article: Source

Here’s Why Oil Prices Just Rose

Posted on 09 August 2016 by VRS  |  Email |Print

The price rise came on the back of renewed calls by some OPEC members to freeze production.Oil prices rose in early trading on Monday, lifted by reports of renewed talks by some members of the Organization of the Petroleum Exporting Countries (OPEC) to restrain output.
“OPEC members including Venezuela, Ecuador and Kuwait are said to be behind this latest reincarnation. But just like previous endeavors, it seems doomed to fail, given key OPEC members (think: Saudi Arabia, Iraq, and Iran) persist in their battle for market share, ramping up exports apace,” said Matt Smith of ClipperData in a note………………………………………..Full Article: Source

Silver Prices Could Soar to $22 If This Happens in September

Posted on 09 August 2016 by VRS  |  Email |Print

Since the start of 2016, silver prices have seen a huge rally. Silver is the best-performing precious metal, returning 47% so far this year. That outpaces gold prices, which are up about 26% over the same period. Since the gold/silver ratio was in silver’s favor going back about five months, I told you the ratio would see a correction that would let the silver price outpace the gold price. We saw that happen over the last two weeks.
But the price of silver may have gotten a little ahead of itself relative to gold. I highlighted that idea for you two weeks ago, and silver has seen violent swings since then………………………………………..Full Article: Source

Oil prices to stabilise at $55/barrel in 2017, says QNB

Posted on 08 August 2016 by VRS  |  Email |Print

Qatar National Bank (QNB) has revised its oil price forecast to average $44.7 per barrel in 2016, up from its previous forecast of $40.8/barrel, state news agency QNA said. In its monthly market update, QNB said rebalancing in the oil market has been “stronger than expected”.
Continued rebalancing is expected to lift prices to an average of $55/barrel in 2017, up from a previous forecast of $51.3 in 2017 and $57.9 in 2018. The revised forecast is based on rising demand growth – the International Energy Agency (IEA) expects global demand growth to reach 1.4 million barrels per day (bpd) this year, up from a previous forecast of 1.2 million bpd, QNB said………………………………………..Full Article: Source

Gold Price Will be ‘Twitchy’ for Next Quarter (Video)

Posted on 08 August 2016 by VRS  |  Email |Print

Randgold Resources Ltd. reported an 8.5 percent drop in second-quarter profit after operational problems at two of its African mines led to a decline in gold output. Net income fell to $49 million from $53.6 million a year earlier, The Jersey, Channel Islands-based company said in a statement on Thursday.
Gold production slid 6.2 percent to 281,494 ounces. Randgold said full-year output will be in the lower half of its 1.25 million to 1.3 million-ounce target range. Production dropped after a milling circuit breakdown at its Tongon mine in Ivory Coast and technical challenges at its Kibali mine in the Democratic Republic of Congo. “We had a difficult quarter,” Chief Executive Officer Mark Bristow discusses with Bloomberg’s Anna Edwards and Manus Cranny on “Countdown.”……………………………………….Full Article: Source

Good US jobs news hits gold price

Posted on 08 August 2016 by VRS  |  Email |Print

Gold prices extended losses on Friday after a better-than-expected jobs report dented safe-haven demand and increased concerns that the Federal Reserve could raise interest rates in coming months.
Gold for December delivery settled down 1.7 per cent at $US1344.40 a troy ounce on the Comex division of the New York Mercantile Exchange, its biggest one-day loss since May 24. The US economy added 255,000 jobs in July, beating economists’ expectations of 179,000 and signalling that the labour market is on strong footing………………………………………..Full Article: Source

Gold price rally sparks $50 billion of commodity investments

Posted on 08 August 2016 by VRS  |  Email |Print

Investors poured just under $51 billion into commodity markets during the first seven months of the year according to new research from UK investment bank Barclays Capital. That was the largest inflows since 2009.
The rise in commodity values combined with the new money invested in the sector saw a $74 billion spike in the value of commodity assets under management since the start of the year. The positive investment flows in 2016 came largely on the back of gold investments with precious metals representing almost $30 billion of total inflows in the first seven months………………………………………..Full Article: Source

International food commodity prices fall

Posted on 05 August 2016 by VRS  |  Email |Print

The international prices for major food commodities saw a modest decline in July, following five consecutive months of increases. The United Nation’s FAO Food Price Index (FPI) averaged 161.9 points in July 2016, slipping 0.8 percent (1.3 points) below its level in June and 1.4 percent below its level of July 2015.
The overall decline of the Index was largely caused by drops in international quotations of grains and vegetable oils, more than offsetting firmer dairy, meat and sugar prices. The FAO Food Price Index is a trade-weighted index tracking international market prices for five major food commodity groups………………………………………..Full Article: Source

Oil could hit $70 next year but expect another plunge soon, says BoA analyst

Posted on 05 August 2016 by VRS  |  Email |Print

Oil may be wobbling around the $40 a barrel mark, but one strategist has said that crude is only heading higher in the near term but in the years to come, there’ll be wild swings. “We’re seeing a bottom right now for the second half of the year,” said Francisco Blanch, the head of global commodities and derivatives research at Bank of America Merrill Lynch, the corporate and investing arm of the American bank.
“We think what’s happening in the market is very seasonal. Supply is actually going down pretty quickly, demand is moving higher, and this is going to move the market into a deficit.”……………………………………….Full Article: Source

As oil enters a bear market, what’s next for prices?

Posted on 05 August 2016 by VRS  |  Email |Print

The oil price entered a bear market this week, as West Texas Intermediate Crude slipped below $40 a barrel for the first time in more than three months and higher-than-expected output weighed on investor fears of a continuing global glut. Brent crude, the more widely used international benchmark, also dipped below $42 a barrel, having passed the $54 mark at the beginning of June.
The price falls came despite concerns around the weakness of the dollar - normally a positive signal for energy prices - and data from the American Petrol Institute that suggested the country’s oil stockpiles were falling in line with expectations………………………………………..Full Article: Source

Oil Price Rally May Be Short Lived

Posted on 05 August 2016 by VRS  |  Email |Print

Oil prices traded up more than 3% yesterday following the release of crude oil inventory data from the U.S. Department of Energy. Inventories for the week ended July 29 showed an increase in crude oil of 1.4 million barrels.
Market analysts were expecting a decrease of around 1.5 million barrels. The increase in inventories suggests a slowdown in the amount of crude being refined into products such as gasoline. This was viewed as broadly positive by the market, because it means less refined products are being produced and contributing to an already oversupplied market………………………………………..Full Article: Source

Fitch: Weak Commodity Prices Raise US Nat Resource Sub Risk

Posted on 04 August 2016 by VRS  |  Email |Print

Weak commodity prices could continue to raise the subordination risk for natural resource fallen angels, according to Fitch Ratings. Additionally, while lien limitations provide a line of subordination defense, the lack of explicit guarantee language and, in some cases, lax lien carve-out provisions can provide fallen angels with additional subordination opportunities.
The commodity downcycle has created a need for companies in the natural resource sector to preserve and generate liquidity. The traditional playbook has been some combination of operating cost cuts, capex reductions, asset sales and secured/unsecured debt and equity issuances………………………………………..Full Article: Source

Gold near 2016 high on haven demand

Posted on 04 August 2016 by VRS  |  Email |Print

Gold prices traded near their highest levels this year on Wednesday as investors sought havens on increasing concerns over global growth. Gold hit a high of $1,367 a troy ounce this week, just shy of its year high of $1,374.71 reached on July 11, before falling back to $1,357.40 late on Wednesday. The precious metal is up 28 per cent this year.
The price of gold has been driven by buying of gold exchange traded funds, which are backed by holdings of the metal. The funds’ holdings of the metal are at their highest level since July 2013, according to data compiled by Bloomberg………………………………………..Full Article: Source

What’s Next for Silver Prices in 2016 After the Fed’s Latest Fumble

Posted on 04 August 2016 by VRS  |  Email |Print

It wasn’t surprising the U.S. Federal Reserve announced on July 31 it was keeping interest rates unchanged, sending silver prices soaring 3.8% that day. But if you missed out on those gains, don’t panic. Money Morning Resource Specialist Peter Krauth projects silver prices in 2016 will climb even higher.
Today, we’ll share Krauth’s prediction. But first, we wanted to make sure Money Morning readers understand why the Federal Reserve has such a big impact on the price of silver. When the Fed raises interest rates, precious metals like gold and silver are seen as less desirable investments………………………………………..Full Article: Source

Zinc Prices Calm, But Metals Remains Top Performing Commodity as Supply Shrinks

Posted on 04 August 2016 by VRS  |  Email |Print

Zinc remains the top performer of the 22 raw materials tracked by the Bloomberg Commodity Index, and is up over 41% this year. It is also the top performer of London Metal Exchange traded metals, with zinc stores monitored by the bourse down 30% from their last September peak. The metal is finding support at $2166 and is meeting resistance at $2294.
Even with its outstanding performance, investors remain bullish on the metal with open interest climbing to its highest since October. The reason for the rapid turnaround in the metal is a changing supply chain, with supply cuts and mining closures changing the market fundamentals, with a deepening deficit now expected………………………………………..Full Article: Source

Oil Options Traders Don’t See Dip to $40 Leading to Market Rout

Posted on 03 August 2016 by VRS  |  Email |Print

Oil analysts from Citigroup Inc. to Bank of America Merrill Lynch are confident that the new bear market in crude will be short-lived. The options market increasingly agrees with them. Investors are paying the smallest premium in two months to protect against a drop in prices from now through the end of the year, even after oil entered a bear market.
The so-called put skew on December Brent and West Texas Intermediate options — the premium traders will pay for insurance that prices will fall rather than rise — has narrowed more than 30 percent since early July. The skew on second-month WTI contracts has fallen by almost half………………………………………..Full Article: Source

Analysts look beyond bear market, forecast average oil price of $57 in 2017

Posted on 03 August 2016 by VRS  |  Email |Print

Despite closing in a bear market Monday, analysts are looking beyond oil’s current slide for a rebound next year. Crude has plunged by more than a fifth in less than two months as refineries created a glut of gasoline while failing to eliminate excess supply of crude. That wrecked refining margins and hurt the earnings of Exxon Mobil Corp., BP Plc and Royal Dutch Shell Plc.
Yet, global oil prices will average $57 a barrel in 2017, according to the median of at least 20 analyst estimates compiled by Bloomberg. Progress will be slow. The crude glut will take a long time to dissipate, meaning only gradual price gains, said Michael Hsueh, a strategist at Deutsche Bank AG………………………………………..Full Article: Source

Oil Prices Fall Below $40 As OPEC Ramps Up Output

Posted on 03 August 2016 by VRS  |  Email |Print

Global oil prices fell below $40 a barrel on Monday, after Reuters’ new survey tallying oil output from OPEC countries showed outputs for the 13-member bloc at record highs when compared to figures in recent history.
The overall increase in global crude output has dragged oil prices down 20 percent since they broke above $50 in June. Friday’s survey found that Iraq increased oil output in July, as the national army made gains against the Islamic State’s (ISIS) oil production and supply network………………………………………..Full Article: Source

Gold price jumps to highest since March 2014

Posted on 03 August 2016 by VRS  |  Email |Print

On Tuesday, gold made the most of a weaker US dollar and expectations of an extended period of ultra-loose monetary policy in the US and negative interest rates around the globe, jumping the highest since March 2014.
Gold futures in New York for delivery in December, the most active contract, added over 1% to a midday high of $1,374.20. The December contract hit an intra-day high of $1,384.40 a month ago, but on a closing-level basis for the most active contract, gold settled at a near two-and-half year high on Monday according to FactSet data. Year to date the metal has gained 29.6% or more than $310 an ounce………………………………………..Full Article: Source

Chile copper producers continue to cut costs amid price drop

Posted on 03 August 2016 by VRS  |  Email |Print

Costs in Chile’s mining industry, which supplies almost a third of the world’s copper, are continuing to fall as producers continue to adapt to sharply lower prices for the red metal, a government report showed Tuesday.
According to the study by the Chilean Copper Commission, C1 cash costs at Chile’s 19 largest mines fell to an average of $1.285/lb during the first three months of the year, down 13% from the same quarter of last year. The sample included mines operated by BHP Billiton, Antofagasta Minerals, Codelco, and Teck and represented 88% of Chilean copper production during the period………………………………………..Full Article: Source

Oil price: Dip below $40 a barrel opens door to $35 crude

Posted on 02 August 2016 by VRS  |  Email |Print

Oil prices slipped below the psychologically important level of $40 a barrel during trading Monday, and another $5 drop could be on the horizon, according to analysts. Bets that U.S. crude’s West Texas Intermediate contract will rise have “pretty much evaporated” as the assumptions underpinning the bull case for oil have collapsed, Again Capital founding partner John Kilduff told CNBC.
A Reuters survey released Friday showed OPEC output likely hit the highest level in recent history. On the same day, oilfield services firm Baker Hughes reported drillers increased the number of rigs operating in U.S. fields for a fifth straight week………………………………………..Full Article: Source

Gold price rally ‘set to continue’

Posted on 02 August 2016 by VRS  |  Email |Print

The rally in gold prices is expected to continue as global uncertainty and volatility persists while economic growth remains weak, former International Monetary Fund deputy head John Lipsky says. In the face of a global outlook based on negative risks and pockets of problems, Australia’s financial system is still rated as one of the most resilient in the world, Mr Lipsky says.
“The happy news for the gold miners is that in the near term the uncertainty is not a bad thing for the gold price,” Mr Lipsky told the Diggers and Dealers Mining conference in Kalgoorlie on Monday………………………………………..Full Article: Source

Gold dollar spot price around $1,350/oz adds to physical buying pain: sources

Posted on 02 August 2016 by VRS  |  Email |Print

The spot dollar gold price found renewed support Monday, following weaker than expected US second-quarter GDP data released late Friday, adding further pressure to the already dismal physical buying conditions in key consumer hubs including India.
Second quarter US GDP disappointed Friday, rising just 1.2% against expectations of a 2.5% gain. “By now it must seem like a familiar storyline. Just at a time when evidence was building that the US economy was in a position for the Fed to again contemplate rate hikes, some weak domestic data or a global event quite quickly scuttle those plans,” ANZ bank said Monday………………………………………..Full Article: Source

US shale producers weather oil price storm

Posted on 01 August 2016 by VRS  |  Email |Print

Opec’s worst fears are coming true. Twenty months after Saudi Arabia took the fateful decision to flood world markets with oil, it has failed to break the back of the US shale industry.
The Saudi-led Gulf states have certainly succeeded in killing off a string of global mega-projects in deep waters. Investment in upstream exploration from 2014 to 2020 will be $1.8 trillion less than previously assumed, according to consultants IHS. But this is an illusive victory………………………………………..Full Article: Source

2015’s most accurate gold price forecaster turns huge bull

Posted on 01 August 2016 by VRS  |  Email |Print

Since the global financial crisis the relationship between interest rate expectations and the gold price has only become tighter and these factors have created a bullish environment for gold and is the main reason many analysts are upping their forecasts for the metal.
The winner of the 2015 London Bullion Market Association long running forecasting competition, Bernard Dahdah of French investment bank Natixis, got it exactly right last year with a forecast of an average $1,160 gold price in 2015………………………………………..Full Article: Source

Goldman Sachs says oil market fundamentals ‘fragile,’ oil prices to stay flat until mid-2017

Posted on 29 July 2016 by VRS  |  Email |Print

Crude oil prices will remain in the $45-$50-a-barrel range till mid-2017, with little to change the global supply and demand situation, Goldman Sachs said. The investment bank’s analysts ran through the many scenarios that would keep the oil market in stasis.
“The improvement in oil fundamentals remains fragile and continues to feature large offsetting forces: wildfires have helped offset surprisingly strong Iran production, slowing demand growth in India and China in 2H16 will help offset production issues in Nigeria and Venezuela and finally product builds have offset crude draws,” they said………………………………………..Full Article: Source

Oil-Price Rout Casts Shadow Over Earnings in Energy Sector

Posted on 29 July 2016 by VRS  |  Email |Print

After two years of spending cuts, canceled projects and tens of thousands of layoffs, Europe’s biggest energy companies are still struggling to cope with a prolonged oil-price rout.
Royal Dutch Shell PLC Thursday reported a 93% drop in profit and rocketing debt for its most recent quarter, sending shares down sharply. Smaller peers such as France’s Total SA and Spain’s Repsol SA also booked lower profits Thursday, while rivals BP PLC and Statoil ASA announced similarly grim results earlier in the week………………………………………..Full Article: Source

Commodity Prices Just Can’t Seem To Stay Up

Posted on 28 July 2016 by VRS  |  Email |Print

Oil prices dropped to a five month low yesterday with the apparent culprit being oversupply. Commodity prices, in general, have also tended to move in the same direction as oil prices, reflecting a feeling that there will be no real pickup in prices anytime soon.
Fed vice-chair Fischer has argued that oil and commodity prices would rebound to a much higher level and help to get inflation back up to the Fed’s target. Financial markets don’t seem to support Fischer’s assessment of the price outlook………………………………………..Full Article: Source

The Price Rally Is Over: Capital Drives the Oil Market to Low Prices

Posted on 28 July 2016 by VRS  |  Email |Print

The current oil-price rally is over. U.S. rig counts have surged as oil prices sink. Capital is driving the oil markets and it enables bad behavior by producers. That is why oil prices will stay low.
The oil-price rally that began in February is over. Prices rose from $26 per barrel to $51 by early June and are now below $42. If they fall through $40, the next likely support level is at $36 per barrel. Most people think that fundamentals–supply and demand–drive the oil market but capital drives the market and oil prices………………………………………..Full Article: Source

Could the oil price fall below $40 a barrel?

Posted on 28 July 2016 by VRS  |  Email |Print

The oil price is still stuck near a recent near three-month low – and some analysts believe it could fall below $40 a barrel before the latest downward move is finished.
International oil price benchmark Brent crude dipped back towards $44 a barrel this morning in London, less than a dollar above its 9 May low. The price indicator is set to record its first monthly fall in July since January, Reuters says, and at ten per cent, the drop will be proportionately the worst of the year so far………………………………………..Full Article: Source

BNP Paribas Raises Gold-Price Forecast But Sees New Downtrend

Posted on 28 July 2016 by VRS  |  Email |Print

There is at least one more bear in the woods as analysts at BNP Paribas increase their gold -price forecast for 2016 but look for the price to trend lower through the rest of the year and 2017.
In an email response to Kitco News regarding the bank’s new forecast released late last week, Harry Tchilinguirian, global head of commodity markets strategy, said the strong performance during the first half of the year forced them to raise their base prices for 2016 and 2017, but “the path of least resistance is lower and not higher.”……………………………………….Full Article: Source

Why gold prices spiked after the Fed decision

Posted on 28 July 2016 by VRS  |  Email |Print

Gold futures rallied to their highest level in two weeks late Wednesday in electronic trading. Many gold investors settled on the notion that the Federal Reserve was actually dovish—in favor of maintaining low interest rates—despite the central bank leaving an interest-rate rise on the table for September.
“The Fed has had numerous opportunities to normalize rates over the past two years and have squandered them all,” said Peter Hug, global trading director at Kitco Metals Inc. in an emailed note after the Fed statement………………………………………..Full Article: Source

More gold price falls? Factors to watch out for

Posted on 28 July 2016 by VRS  |  Email |Print

More downside is expected for gold as investors anxiously await the US Federal Reserve’s decision on interest rates that will be known on Wednesday evening. Analysts are forecasting the bullion to move lower towards $1,300 per ounce instead of climbing to the $1,400 level.
The Fed’s ruling on interest rates can have drastic impact on the precious metal, as well as the US dollar. Increased rates could put pressure on gold prices. In Dubai, retail rates remained stable on early Wednesday morning, ahead of the Federal Reserve Open Market Committee (FOMC) discussions………………………………………..Full Article: Source

Despite Slump in Commodity Prices, Africa among Fastest Growing Regions

Posted on 27 July 2016 by VRS  |  Email |Print

Notwithstanding a relative slowdown as a result of the prolong drop in commodity prices, sub-Saharan Africa remains one of the fastest growing regions in the world, a report has shown.
This was reflected in the foreign direct investment (FDI) levels in 2015, where FDI project numbers increased by seven per cent, according to EY’s (Ernst & Young) 2016 Africa attractiveness programme titled: “Staying the course, despite a relative slow down,” obtained on Monday………………………………………..Full Article: Source

World Bank Raises Oil Prices Forecast to $43

Posted on 27 July 2016 by VRS  |  Email |Print

The World Bank is raising its 2016 forecast for crude oil prices to $43 per barrel from $41 per barrel due to supply outages and robust demand in the second quarter. Oil prices jumped 37 percent in the second quarter of 2016 due to disruptions to supply, particularly wildfires in Canada and sabotage of oil infrastructure in Nigeria. The revised forecast appears in the World Bank’s latest Commodities Markets Outlook and takes into account a recent softening of demand and the recovery of some disrupted supply.
“We expect slightly higher oil prices for the second half of 2016 as oil market oversupply diminishes,” said John Baffes, Senior Economist and lead author of the Commodities Markets Outlook. “However, inventories remain very large and will take some time to be drawn down.”……………………………………….Full Article: Source

The question is not why oil prices have fallen, but why they have not fallen further

Posted on 27 July 2016 by VRS  |  Email |Print

Hedge funds and other money managers have begun to amass another large short position in futures and options contracts linked to the price of crude oil. But the current wave of short-selling has been associated with a much smaller decline in WTI prices than last summer, at least so far.
Hedge funds increased their short positions in NYMEX WTI futures and options from 53 million barrels on May 31 to 141 million barrels on July 19, anticipating a further drop in prices………………………………………..Full Article: Source

Oil slumps on surging supply but global economy picks up speed

Posted on 27 July 2016 by VRS  |  Email |Print

Oil prices have tumbled to a three-month low as surging supply once again exposes the chronic global glut and threatens to perpetuate the energy slump for another year. US crude contracts crashed through key technical barriers to $42.40 on Tuesday before recovering slightly in late trading on profit-taking. They have fallen by 9pc over the last four sessions.
Speculators have given it an extra push. Data from the Commodity Futures Trading Commission in the US shows that 52 hedge funds have taken out large short positions, betting that the summer sell-off still has a further leg to run………………………………………..Full Article: Source

GFMS lifts 2016 gold price

Posted on 27 July 2016 by VRS  |  Email |Print

Changed sentiment stemming from increased uncertainty from economic and political outlooks has prompted GFMS to revise its 2016 average gold price forecast. These include the Brexit, reduced expectations of a rate rise from the Fed, a wobbly Italian banking sector and the US presidential race, it said in its latest gold survey report on Tuesday.
“Gold is likely to retain its status as a risk hedge for the remainder of the year, particularly as uncertainty persists and risks to the global economy remain elevated,” GFMS added. It now sees the metal averaging $1,279 per ounce this year, up from $1,184 in its forecast in April………………………………………..Full Article: Source

Asia alumina: Australia price slips $1/mt to $235/mt FOB

Posted on 27 July 2016 by VRS  |  Email |Print

The Australian alumina daily assessment slipped $1/mt to $235/mt FOB on Tuesday, as buyers remained scarce amid a generally pessimistic market outlook. “There’s no one buying at the moment, as everyone is expecting the market to go down further, probably breaking below $230/mt soon,” an Asian consumer source said.
“The Chinese are not buying as domestic prices are falling, and the Middle East, India and Malaysia have all bought recently. We don’t see the Chinese buying in the next three months at least,” he added………………………………………..Full Article: Source

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