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Commodities Briefing - Category | Price Watch more

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

Decline in commodity prices not benefiting the end-users

Posted on 11 February 2015 by VRS  |  Email |Print

The sharp fall in commodity prices over the past few months is not benefiting end-users. While the Indian basket crude oil prices have plunged 29.5% between October and December, retail petrol prices dropped just by over 6.5% for the period. Despite the revision in petrol and diesel prices early this month, they have not kept pace with the fall in crude prices.
Ditto with other commodities as well. Cotton prices have declined nearly 10% since October but yarn prices have not dropped at the same rate. While woven yarn prices have dropped only marginally, hosiery yarn prices have declined by only 4.7% since October, data with the union textiles ministry showed………………………………………..Full Article: Source

Citigroup; Oil’s Heading To $20 And Opec’s Days Are Over

Posted on 11 February 2015 by VRS  |  Email |Print

Citigroup is telling us that oil is going to head down to $20 a barrel soon enough. Further, that Opec’s hold over the oil price is now definitively broken. That’s a pair of pretty strong claims and of course we need to take them both with the appropriate amount of salt. But I think the first is possible and the second is likely.
Even though I agree that that second, the days of Opec’s control being over, is the more remarkable claim I do think it is the stronger of the two. The reason for this is two little bits of economics. The first being that monopolies and cartels do indeed exist but in the end they always fall over. If it’s not because of legal action against them, or because of cheating among the cartel’s members, then in the end technological advance will indeed get them………………………………………..Full Article: Source

Why oil price could halve again

Posted on 11 February 2015 by VRS  |  Email |Print

Oil prices have surged by 20% since the end of January. The bounce has led some to call an end to the eight-month long rout during which the cost of a barrel of both Brent crude and West Texas Intermediate (WTI) has more than halved. Not everyone, however, is so confident. This rally has been driven by a drop in US rig count, massive cuts in upstream capital expenditure, the reading of technical charts, and investor short position-covering.
“Chartists…are strutting their stuff at the moment as their support levels are being held and upward resistance being tested,” says industry expert Malcolm Graham-Wood. “For Brent, support is seen as being at $53.99 and $52.40 while resistance is at $59.15 and after that at $69.23. Brent’s intra-day high yesterday was $59.61 and whilst we are well off that at the moment if it should close above that level then they are in Nirvana.”……………………………………….Full Article: Source

China trade data shows impact of commodity price slump

Posted on 10 February 2015 by VRS  |  Email |Print

China’s January trade data has been viewed as unambiguously weak, and while the softer exports are an obvious concern, the dramatic slump in imports isn’t nearly as bad as it looks.
Exports dropped 3.3 percent from a year earlier, against a median expectation of a 6.3 percent gain, while imports plummeted 19.9 percent, the biggest slide since May 2009, a time when the economy was dealing with the global recession. The problem with looking at the trade numbers in percentage terms is that they are dollar-based, value numbers………………………………………..Full Article: Source

The Facts Behind Oil’s Price Collapse

Posted on 10 February 2015 by VRS  |  Email |Print

The dramatic drop we have seen in oil prices over the last few months has many economic forecasters worried about future growth. The problem with declining oil prices is that too much of a good thing can turn frightening. Someone who goes on a modest diet and loses five pounds over the course of a month might be elated.
Someone who loses 75 pounds under those same circumstances would worry they have a serious illness. Conceivably, the precipitous fall in oil prices could mean that the global economy’s health has started to fail. While that would account for the drop in oil prices, most leading indicators do not confirm that economic diagnosis………………………………………..Full Article: Source

Forecasts Of Oil Price Bottom And Recovery

Posted on 10 February 2015 by VRS  |  Email |Print

For oil price forecasters, it is all but mandatory to start with self-deprecating humor, because the track record is so bad. Late 2013, surveys showed predictions for 2014 of $104 per barrel for Brent. Citi’s forecast of a significant drop raised eyebrows, in fact. Now, one reporter noted that expert forecasts range from $30-200, which is both true and funny, but doesn’t capture the actual expectations, primarily because of the time differential.
But once prices were clearly falling, there was a rush to be the most bearish. (I suggested back in December that a floor seemed to have been reached at about $50, although at other points on the way down I believed OPEC would manage to stabilize prices at those levels.)……………………………………….Full Article: Source

CITI: Here comes $20 oil …

Posted on 10 February 2015 by VRS  |  Email |Print

Oil prices are heading lower. In a note Monday, Ed Morse, global head of commodity research at Citi, wrote that with evidence of oversupply in the oil market, the bottom is not yet in for oil prices. “It’s impossible to call a bottom point,” Morse wrote, “which could, as a result of oversupply and the economics of storage, fall well below $40 a barrel for WTI, perhaps as low as the $20 range for a while.”
“The oil market should bottom sometime between the end of Q1 and beginning of Q2 at a significantly lower price level in the $40 range - after which markets should start to balance, first with an end to inventory builds and later on with a period of sustained inventory draws,” Morse wrote………………………………………..Full Article: Source

Is OPEC winning an oil price war against the US?

Posted on 10 February 2015 by VRS  |  Email |Print

The latest oil market report from the Organization of the Petroleum Exporting Countries paints a not-so-rosy picture for US drillers under pressure from lower oil prices. But even OPEC admits that US oil production has remained surprisingly stable despite collapsed oil prices and cutbacks in US energy.
Demand for oil from the Organization of the Petroleum Exporting Countries is set to rise this year, while growth in US oil production will slow as American energy firms cut back on drilling. That’s the conclusion of the latest monthly oil report from OPEC, the 12-member oil cartel that accounts for about 40 percent of the world’s oil production. If the forecasts prove true, it suggests that OPEC is winning an undeclared price war against a growing rival: namely, the US………………………………………..Full Article: Source

Oil Rises on Optimism For Higher Demand, Lower Supply

Posted on 10 February 2015 by VRS  |  Email |Print

Oil prices rallied for a third-straight session on signs of higher demand and lower supply, including more bullish forecasts from both the Organization of the Petroleum Exporting Countries and the U.S. government.
OPEC’s new monthly oil-market report said demand for its crude will rise this year as the U.S. produces less and consumes more. It estimates that demand will grow to 29.2 million barrels a day, 100,000 more than a year ago. That reverses a forecast for a 300,000 barrel-a-day decline in demand. It also reduced non-OPEC supply growth estimates by 420,000 barrels a day………………………………………..Full Article: Source

Oil-Price Rebound Predicted

Posted on 10 February 2015 by VRS  |  Email |Print

In the latest sign that the seven-month selloff in crude-oil prices may be nearing a bottom, an energy watchdog said that a recovery seems “inevitable” and the glut that has driven down prices by more than 50% since June could start to ease as soon as the second half.
A wave of spending cuts by oil producers and a sharp decline in the number of rigs drilling for crude in the U.S. likely will slow the nation’s oil-output growth, spurring a rebound in prices, the International Energy Agency said in a report released Tuesday U.K. time. The benchmark U.S. oil price rose 2.3% to $52.86 a barrel on Monday and is up 19% from a nearly six-year low hit last month………………………………………..Full Article: Source

Should you write off gold this year?

Posted on 10 February 2015 by VRS  |  Email |Print

Good news for the U.S. economy, in the form of a solid jobs report, decked gold on Friday, leading some analysts to write the yellow metal off for the year. “It’s the nail in the coffin for gold,” said Howie Lee, an investment analyst at Phillip Futures, noting it fell despite increasing tensions over Greece. “It’s increasingly likely [the Federal Reserve] will hike in June. Prospects of higher interest rates have proved to be a catalyst for gold’s downfall.”
On Friday, gold for April delivery fell as much as 3.6 percent in intraday from Thursday’s high, touching a low of $1,228.20 an ounce. In early Asian trade Monday, it recovered somewhat, trading around $1,237.10 an ounce………………………………………..Full Article: Source

Geopolitics trump fundamentals in 2015, likely bull year for gold price: MKS

Posted on 10 February 2015 by VRS  |  Email |Print

Geopolitics and the market’s view of risk, rather than fundamentals, will push the price of gold higher this year, according to Swiss refiner MKS. Speaking at this year’s Richcomm Commodities Outlook in Dubai Sunday, CEO of MKS in Dubai Frederic Panizzuti said the market’s reaction to the possibility of a renewed euro crisis, fallout from the Russia-Ukraine standoff, as well as interest rate hikes in the US, will all add to gold’s appeal as a safe haven for investors in 2015.
“We have put fundamentals aside in our gold outlook for 2015,” Panizzuti said. “Geopolitics, the perception of risk and even emotional risk from investors are the main drivers this year.”……………………………………….Full Article: Source

Copper Prices at Lowest Point in Six Years - Is It Time to Buy or Avoid This Precious Metal?

Posted on 10 February 2015 by VRS  |  Email |Print

There have been rough times in the commodity markets, but copper has been hit especially hard. From an early-2011 peak that approached $10,000 per metric ton, copper lost nearly 30% of its value in mid-2011, and after a brief recovery, has slowly dropped to its current price ($2.534 per pound or $5,575 per metric ton as of this writing).
That is the lowest price since the massive 2008 slump that saw prices rapidly drop below $1.50 per pound. Has the copper price bottomed out, and is it time to buy? That is not a simple call. Copper prices are far more difficult to predict now. Copper stocks have come into increasing use as a financial tool because of its relative liquidity, thus the demand is split into two components – those who are using it solely as a financial vehicle and others who are using it for manufacturing purposes………………………………………..Full Article: Source

OPEC Blamed for Low Crude Oil Prices

Posted on 09 February 2015 by VRS  |  Email |Print

The Bank for International Settlements (BIS), the global clearinghouse for sovereign banks, released on Saturday an update to its report on global liquidity conditions. As part of this update, BIS included its explanation of what’s happened in the oil markets and its safe to say that the members of OPEC are not likely to be impressed with the Bank’s conclusion.
Comparing the current 50% drop in crude prices to other episodes of oil price declines in 1996 and 2008, BIS notes that both previous price collapses “were associated with sizeable reductions in oil consumption and, in 1996, with a significant expansion of production.”……………………………………….Full Article: Source

Oil Prices: 5 Things You Need to Know Now

Posted on 09 February 2015 by VRS  |  Email |Print

If you’re looking for a bottom for oil prices, you might be tempted to think the recent bounce represents the end of a historic, six-month crash. But the next move for the price of crude is anybody’s guess. A lot depends on how producers and consumers react to the new bargain price.
If you’d like to try come up with your own forecast, here’s what you’ll need to keep in mind: Why are oil prices falling so far so fast? Just like a hot ticket on Stubhub, the global price of oil is set by middlemen who broker sales based on supply and demand. Lately, they’ve got a lot of unsold product to deal with. Simply put, the world is awash in oil………………………………………..Full Article: Source

Will Silver Prices Hit New Lows In 2015?

Posted on 09 February 2015 by VRS  |  Email |Print

There’s been quite a bit of volatility with Silver prices. After a nice rally into early 2015, the past 2 weeks has ushered in some price weakness. And this begs the question: Do lower prices loom for Silver in 2015? Back in August 2014, I wrote an article projecting lower Silver prices. In that post, I used my custom Fibonacci method to calculate probable Silver price targets over the short and long term. The short-term targets were both hit and closed.
It’s the longer term target that deserves our attention here. My projected target was 14.095. A nice call, considering that Silver futures were trading at 19.395. That represented a pullback of 27.3 percent and seemed somewhat of a stretch. But was it a stretch? Not so much………………………………………..Full Article: Source

Global debt haunts mineral prices

Posted on 09 February 2015 by VRS  |  Email |Print

Not quite six weeks into the year and already the wall metals need to climb gets higher by the day. On top of a global emerging currency war — in the space of just over five weeks 17 central banks have loosened monetary policy — there is all that debt.
As McKinsey Global Institute asked during the week, “can we thrive in a world awash with debt?” Since 2007, it reports, ­global debt has increased by $US57 trillion ($73 trillion). On Thursday, copper inventories at the London Metal Exchange jumped by 32,500 tonnes in a 24-hour period (to 284,600 tonnes). Inventories of the red metal at the Antwerp warehouse alone have risen 65 per cent since January 1………………………………………..Full Article: Source

OPEC delegates see scant hope of rapid oil price recovery

Posted on 06 February 2015 by VRS  |  Email |Print

Growing numbers of OPEC delegates say they expect no rapid recovery in oil prices, even as the market shows signs of a tentative rally from near six-year lows. One delegate from a country outside the Gulf and a relative price hawk in OPEC said he doubted oil would revisit $100 a barrel this year or next, and that this should encourage less dependence on oil revenue in national budgets.
“Based on supply and demand, the price for this year and next will probably not go beyond $100,” the delegate told Reuters on condition of anonymity. “We have to get a lesson from this. The budgets should not depend on a high oil price.”……………………………………….Full Article: Source

Saudis Increase Oil Price in U.S., Cut It for Asia

Posted on 06 February 2015 by VRS  |  Email |Print

Saudi Arabia on Thursday increased the oil prices it charges U.S. buyers, reversing months of cuts. But the world’s largest oil exporter has reduced its prices in Asia as it shifts a battle over market share from America to the Far East.
In an email to clients, Saudi Aramco said it was increasing its U.S. prices for light oil delivery in March by 15 cents a barrel, reversing at least three months of price cuts in the American market. But the state oil company reduced its prices for Asia by 90 cents a barrel………………………………………..Full Article: Source

OPEC Says Oil Could Reach $200 Per Barrel: Here’s Why Investors Shouldn’t Bet on It

Posted on 06 February 2015 by VRS  |  Email |Print

The most severe oil collapse since the credit crisis has caused many energy stocks to crash to six-year lows and spurred countless “experts” to predict when the oil markets will bottom and where they might head next. In reality, no one can accurately predict the short- to medium-term price of oil — nor should most investors try — but that hasn’t stopped legendary oil tycoon T. Boone Pickens from boldly predicting that oil will return to $100 per barrel within 12-18 months.
On the other side of the argument, Saudi Prince Alwaleed bin Talal is even more confident in his counter claim “I’m sure we’re never going to see $100 anymore.” However, now, OPEC’s Secretary General Abdulla al-Badri has upped the speculative prediction stakes with the boldest prediction of all — that oil prices have not only bottomed but may soon soar past $200 per barrel………………………………………..Full Article: Source

3 Factors That Drive Gold Prices

Posted on 06 February 2015 by VRS  |  Email |Print

Gold is something that fascinates us all at some level. Kings fought for it, explorers risked their lives for it and we’ve all been conditioned to believe it has an almost magical intrinsic value. (If you want to listen to a captivating story explaining why we value gold so much more than any of the other basic elements on the periodic table, check out the Planet Money podcast “Why Gold”.)
As traders and investment educators, our fascination with gold went beyond the element itself. It took us into the realms how traders view gold and what makes them buy it. This exploration led us to write a book for McGraw-Hill in 2011 entitled All About Investing in Gold — a must read, if we do say so ourselves………………………………………..Full Article: Source

Nyrstar Sees Zinc Prices Rising as Shortage Looms by End of Year

Posted on 06 February 2015 by VRS  |  Email |Print

Nyrstar NV, the world’s largest refined-zinc producer, expects the price of the metal to increase further after the 500,000 metric ton Century mine in Australia shuts by the end of the year.
“We are heading into a period that is forecast to be short on both the concentrate market and the refined metal market,” Heinz Eigner, acting chief executive officer of Belgium-based Nyrstar, said in a phone interview. “This double deficit” is pushing the metal into a “very strong price range,” he said………………………………………..Full Article: Source

Total CEO Expects Oil Price Of $60/Barrel This Year

Posted on 05 February 2015 by VRS  |  Email |Print

Oil prices are likely to remain relatively low until the summer, the chief executive of Total was quoted as saying on Wednesday, leading the French oil major to assume an average price of $60 a barrel this year.
Talking to the privately Saudi-owned al-Hayat newspaper on the crude oil price outlook, Patrick Pouyanne said: “I see it as relatively low until summer, but it is hard to predict after that. When we see the history of the crude cycles, we notice that prices fall hard and quick then rise back usually within 18 months. “Because we are cautious we have adopted a price of $60 a barrel for this year and this is more of a prediction,” he was quoted saying………………………………………..Full Article: Source

Gold price set to improve in February – INTL

Posted on 05 February 2015 by VRS  |  Email |Print

The gold price should recover in February although it has struggled so far this month, INTL FCStone analyst Edward Meir said. Gold came storming out of the gate in 2015, peaking at $1,308 at one point and gaining 10 percent in the first three weeks of January.
“There were lots of economic ‘mini-shocks’ that sparked prices higher, with the most significant being the undoing of the Swiss franc’s three-year peg against the euro,” Meir said in a monthly note on Wednesday. “The backlash this caused has been well documented by now, but what we think is the more important takeaway is just how tenuous central bank policy can be,” he added………………………………………..Full Article: Source

OPEC sees oil prices exploding to $200 a barrel

Posted on 04 February 2015 by VRS  |  Email |Print

Right now the oil market is totally focused on finding a bottom for oil prices. However, according to OPEC’s Secretary-General Abdulla al-Badri we’ve already hit bottom. Not only that, but he sees a real possibility that oil prices could explode higher to upwards of $200 per barrel in the future. He’s far from the only one that sees a return of triple-digit oil prices.
According to the Secretary-General, the oil market doesn’t need to look for oil prices to bottom as the market has already bottomed. Instead, he offered quite bullish comments by saying, “Now the prices are around $45-$55, and I think maybe they [have] reached the bottom and we [will] see some rebound very soon.” Now, normally that type of remark would be just another layer of noise, but this is coming from OPEC’s Secretary-General so it comes with a lot of weight behind it………………………………………..Full Article: Source

Gold Falls as Haven Demand Squelched by Greek Plans

Posted on 04 February 2015 by VRS  |  Email |Print

Gold prices fell Tuesday, as hopes for an imminent resolution between the new Greek government and its creditors tempered demand for the safe-haven metal. Gold for April delivery, the most actively traded contract, closed down $16.60, or 1.3%, at $1,260.30 a troy ounce on the Comex division of the New York Mercantile Exchange.
A Greek official said Tuesday that Athens was working on a “road plan” to lessen the burden of his country’s hefty debt pile, and he hoped to have an agreement with Greece’s creditors by the beginning of June………………………………………..Full Article: Source

Oil could fall to $30-$35: Opec delegates

Posted on 03 February 2015 by VRS  |  Email |Print

Oil prices may stay depressed until summer due to weak seasonal demand even as Saudi Arabia’s strategy of curbing the output growth of rival producers might have started achieving tangible results, Opec delegates told Reuters. Delegates from the Organization of the Petroleum Exporting Countries and external experts are meeting at Opec’s Vienna headquarters this week to discuss the producer group’s long-term strategy. Such meetings do not set output policy.
The talks arise as data from the United States showed a record drop in drilling rigs, prompting oil prices to jump above $50 a barrel on Friday as traders said they saw it as a sign that Opec’s strategy was taking a toll on the US shale boom………………………………………..Full Article: Source

Oil prices jolted as falling rigs wrong-foot bears: Kemp

Posted on 03 February 2015 by VRS  |  Email |Print

Oil prices surged 8 percent on Friday as the market digested news another 94 rigs previously drilling for oil in the United States had been idled over the previous week. It was the largest number of rigs de-activated in a single week since at least 1987 and triggered the biggest one-day percentage increase in Brent prices since 2009.
Yet there was nothing remotely surprising about either the continued fall in the rig count - or the volatile market reaction………………………………………..Full Article: Source

Oil prices rebound on signs of output cuts

Posted on 03 February 2015 by VRS  |  Email |Print

The price of oil rallied on Monday as investors speculated that the falling cost of crude may have ended. Brent crude was up 1.3% at $53.65 a barrel, having reached $55, while US oil rose 1.7% to $48.52.
It followed the release of data showing that US demand for leasing oil rigs was slowing, suggesting that producers might be preparing to cut output. Meanwhile, US giant ExxonMobil reported a 21% fall in quarterly earnings on lower oil and gas production………………………………………..Full Article: Source

LBMA ‘experts’ go for $1,211 gold price average in 2015, $16.76 silver

Posted on 03 February 2015 by VRS  |  Email |Print

$1,294 platinum and $838.40 palladium are other average picks in this year’s LBMA precious metals forecasting competition. This is the time of year the London Bullion Market Association (LBMA) announces the entries for its annual precious metals forecasting competition, with submissions from an invited panel of ‘expert’ analysts – mainly from banks and other financial institutions.
Each entrant is asked to forecast high, low and average prices for gold, silver, platinum and palladium for the year, with winners being those who predict average prices closest to the LBMA fixings average over the year. This year there were entries from a record 35 such analysts from around the world………………………………………..Full Article: Source

Oil price will average less in 2015 than during financial crisis - Reuters Poll

Posted on 02 February 2015 by VRS  |  Email |Print

Crude oil will likely continue falling before posting only a mild recovery in the second half of this year, a Reuters survey of analysts showed on Friday, with prices set to average even less in 2015 than during the global financial crisis. The survey of 33 economists and analysts forecast North Sea Brent crude would average $58.30 a barrel in 2015, down $15.70 from last month’s poll, in the biggest month-on-month forecast revision since prices last collapsed in 2008-2009.
If the forecasts for 2015 prove correct prices will average the lowest since 2005, even if they recover after June, illustrating the impact of OPEC’s decision to maintain output in the face of fast-growing U.S. shale output………………………………………..Full Article: Source

Chevron chief says oil price to rebound after investment cuts

Posted on 02 February 2015 by VRS  |  Email |Print

Very few large oil projects will go ahead if crude stays below $50 per barrel, setting the scene for a rebound in prices, the chief executive of Chevron of the US has said. Speaking as Chevron became the latest oil company to announce a cut in capital spending in response to the plunge in crude, John Watson said that given fiscal terms and production costs around the world, “I don’t see many investments that are going to go [ahead]” at current prices.
He added that in spite of the excitement over booming US shale oil production, “you’re going to see reduction in that rate of growth in response to current prices”………………………………………..Full Article: Source

GCC growth ‘to remain unaffected by oil price fall’

Posted on 02 February 2015 by VRS  |  Email |Print

Economic growth in the six-nation Gulf Cooperation Council (GCC) will not be affected by the falling oil prices as these countries have abundance of financial reserves, which will allow them to keep on moving with the level of spending, said an expert from International Monetary Fund (IMF) here at a workshop.
The Riyadh Chamber of Commerce and Industry (RCCI) organized the workshop in cooperation with the IMF. Speaking on the Middle East economy in light of the global changes and the role of the private sector, Raja Al-Marzouqi, IMF adviser for the Middle East and Central Asia Department, said: “Losses of the GCC countries are estimated at $300 billion in the wake of the oil price drop, however, economic growth in the GCC countries will not be affected by the price fall due to the abundance of financial reserves, which will make the GCC countries keep the level of spending.”……………………………………….Full Article: Source

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

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