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Commodities Briefing - Category | Price Watch more

Opec and American shale keep the oil price spiralling downwards

Posted on 08 December 2014 by VRS  |  Email |Print

Oil prices were back near five-year lows – below $70 per barrel – at the end of last week as commodity traders, analysts and governments struggled to come up with new forecasts for 2015. The benchmark, Brent blend, had recovered from a major drop in the aftermath of last month’s meeting of the oil producers’ cartel, Opec. However, it was back down at $69.17 on Friday as the market bet on a prolonged low in prices.
Igor Sechin, Russia’s most senior oil official, warned that Opec’s unwillingness to cut production could push oil down to $60, while the Chicago Mercantile Exchange reported a huge increase in the number of investors hedging on crude hitting $40………………………………………..Full Article: Source

Opec: Big oil’s problem isn’t falling prices, it’s Ed Davey

Posted on 08 December 2014 by VRS  |  Email |Print

Energy secretary Ed Davey’s assault on oil and resource companies for climate change misses the point… and chickens are equally to blame. Investors in Britain’s biggest oil companies Royal Dutch Shell and BP have endured a torrid end to the year as the falling value of crude has eroded the value of their holdings in a sector long viewed as a safe bet.
If sentiment wasn’t already bad enough across the industry after a 35pc slump in Brent since June, then remarks made by the energy secretary Ed Davey suggesting that pension funds should dump the sector have only added to the sense of foreboding………………………………………..Full Article: Source

Gold price may fluctuate till X’mas

Posted on 08 December 2014 by VRS  |  Email |Print

Despite the fluctuations and confusion over the price trend, customers have continued to purchase the precious metal. Investing in gold these days is quite like playing the stock market with volatile shares. The price of gold has been oscillating over the past few weeks, with highs followed by dips.
Despite the fluctuations and confusion over the price trend, customers have continued to purchase the precious metal. Jewellers like S. Santhakumar attributed the volatility to a dip in international gold prices. But, customers are yet to reap the benefit entirely, as the demand for this commodity has gone up in the stock market. The sales have gone up by 20-30 per cent since November-end………………………………………..Full Article: Source

Oil Prices - Decline Turned Into Collapse?

Posted on 05 December 2014 by VRS  |  Email |Print

Public investment markets are inherently volatile. Oil prices have been declining since June 7th when West Texas Intermediate was selling at $107 per barrel. Today, the same barrel of oil is selling at $66, reflecting an over-supply of oil on the world market, which has driven oil prices lower. Last Thursday, OPEC decided not to cut production, confounding expectations of a production cut.
Oil prices declined by 10% following the decision. We have been consistently stating our view that oil price weakness is a function of excess supply, rather than a problem with demand (recession, for example). It is true that much of the developed world is struggling with growth, and the emerging economy’s growth profile is contracting………………………………………..Full Article: Source

Will falling oil prices curb America’s shale boom?

Posted on 05 December 2014 by VRS  |  Email |Print

This year’s Christmas parade in Lindsay, in the heart of Oklahoma’s oil country, featured the Stars and Stripes every ten yards, 11 horses with riders in Santa hats and a rifle salute by veterans. But the highlight was a thundering, bright red oil tanker covered in fairy lights and owned by Hamm & Phillips, an oil-services firm with local roots that has ridden the shale boom in the state and across America.
That energy revolution is the envy of the business world. Abundant oil and gas have been extracted from underground rocks by blasting them with a mixture of water, chemicals and sand—“fracking”, in the jargon. As well as festive spirit, the firms responsible embody an all-American formula of maverick engineers, bold entrepreneurs and risk-hungry capital markets that no country can match………………………………………..Full Article: Source

$50 Oil Is Already Here

Posted on 05 December 2014 by VRS  |  Email |Print

Oil market analysts are debating if oil will fall to $50. In North Dakota, prices are already there. Crude sold at the wellhead in the Bakken shale region in North Dakota fell to $49.69 a barrel on Nov. 28, according to the marketing arm of Plains All American (PAA) Pipeline LP. That’s down 47 percent from this year’s peak in June, and 29 percent less than the $70.15 paid for Brent, the global benchmark.
The cheaper price for North Dakota crude underscores how geographic and logistical hurdles can amplify the stress that plunging futures prices have put on drillers in new shale plays that have helped push U.S. oil production to the highest level in 31 years………………………………………..Full Article: Source

Extreme oil bears gamble on $40 crude

Posted on 05 December 2014 by VRS  |  Email |Print

The oil market rout has made some investors so bearish they are buying contracts that pay out if prices drop below $40 a barrel — a level last traded during the bleakest chapters of the financial crisis.
Extreme market scenarios are playing out in put options for crude, which give holders the right to sell oil above a set price by a certain date………………………………………..Full Article: Source

Oil falls to below $70 in post-OPEC volatility

Posted on 05 December 2014 by VRS  |  Email |Print

Brent crude oil fell below $70 a barrel on Thursday as investors searched for a stable price range after a near 40 percent fall since June. Oil prices have been volatile since the Organization of the Petroleum Exporting Countries (OPEC) said last week it would not lower output despite an oversupplied market.
Brent was down 27 cents at $69.65 a barrel by 1345 GMT. U.S. crude was down 28 cents to $67.10 a barrel, after a 50 cent gain in the previous session………………………………………..Full Article: Source

OPEC: Making the best of a low price

Posted on 05 December 2014 by VRS  |  Email |Print

An effective cartel requires three things: discipline, a dominant market position and barriers to entry. The Organisation of the Petroleum Exporting Countries lacks all three. Its members cheat on their quotas. It supplies only 30% of the world’s oil—too little to exercise control. New producers abound.
That is the backdrop to OPEC’s decision last month to make no attempt to bolster the oil price, sending it below $70 a barrel—a near 40% drop since June. Saudi Arabia, its most influential member, could have sent the price up single-handedly by deciding to pump less. Unlike cash-strapped oil exporters such as Venezuela, the kingdom can afford self-denial: it has savings of $900 billion………………………………………..Full Article: Source

Biggest Winners and Losers of International Oil Price Crash

Posted on 05 December 2014 by VRS  |  Email |Print

Oil prices around the world have fallen more than 38 percent since the year’s high in June. Among the winners are airlines, which are saving on fuel and not reducing fares for customers. Bank of America Corp. predicts earnings will gain 73 percent in 2015.
Saudi Arabia flexed its muscle at November’s OPEC meeting by overruling other members, showing that it’s still the dominant producer. The desert kingdom needs oil at $83.60 a barrel to balance its budget, according to the International Monetary Fund, but it’s got $736 billion in reserves………………………………………..Full Article: Source

Gold Price Will Regain Its Shine in 2015

Posted on 05 December 2014 by VRS  |  Email |Print

For all the talk of gold sinking remorselessly to $1,000 an ounce, the metal has risen to $1,200 per ounce and has held its ground. Have we seen the bottom? Money managers Doug Loud and Jeff Mosseri of Greystone Asset Management say that if we haven’t seen the bottom, we will soon.
I’m not sure that the shorts can get gold down to $1,000/oz. There is tremendous physical buying, particularly in Asia, and central banks are buying as well. The U.S. and Canadian Mints have stopped making silver coins because they’ve run out of silver. Demand for gold and silver bullion is quite high, but the paper market is about 50 times the size of the physical market. So games can be played in the paper market………………………………………..Full Article: Source

World Food Prices stable for third month in Nov; Cereal prices rise

Posted on 05 December 2014 by VRS  |  Email |Print

FAO’s monthly food price index was stable in November, as vegetable oil and grain prices inched up and offset ongoing declines in dairy prices. The Food Price Index averaged 192.6 points, marking the third consecutive month of stability. The Index now stands 13 points, 6.4 percent below its level in November 2013.
“The index appears to have bottomed out with higher probabilities for a rise in its value in coming months,” said Abdolreza Abbassian, senior economist at FAO. After some volatile movements in recent years, FAO’s Food Price Index, a trade-weighted index that tracks prices of five major food commodities on international markets, is now around its level of August 2010………………………………………..Full Article: Source

Falling commodity prices put a spoke in investment cycle hopes

Posted on 04 December 2014 by VRS  |  Email |Print

Falling commodity prices, especially of metals and crude oil, are good for the Indian economy as they cool prices, lower the import bill and help reduce government spending on subsidies. They also lower costs for companies that use commodities, especially those who produce consumer goods. The positive effects are indeed many, but one serious side effect could present itself.
Falling prices for metals mean lower realizations for producers. Their costs do not decline in kind, which means profitability gets squeezed. Lower profitability affects cash flows, while falling share values make it difficult to raise capital. It is normal for companies to seek to postpone capital expenditure (capex) plans in such a scenario, especially if they expect the situation to be a prolonged one………………………………………..Full Article: Source

The global politics of falling oil prices

Posted on 04 December 2014 by VRS  |  Email |Print

After years of high oil prices driven by scarcity and fears that oil is running out, the price of crude oil has fallen from about $US115 to less than $US70 a barrel over the past six months, causing a dramatic and welcome fall in the price of petrol at the bowser. What is going on? Like other commodities, the crude oil price is basically driven by supply and demand.
For decades, the environmental movement has been insisting that non-renewable fossil fuels are running out, that we have passed “Peak Oil” (when global crude oil production passes its upper limit), and that the world is on the brink of acute shortages, if not the end of the petroleum era………………………………………..Full Article: Source

Saudi tips $US60 oil price floor

Posted on 04 December 2014 by VRS  |  Email |Print

OPEC’s biggest oil producer Saudi Arabia now believes oil prices could stabilise at around $US60 a barrel, a level both it and other Gulf producers believe they could withstand, according to people familiar with the situation.
The shift in Saudi thinking suggests the de facto leader of the Organization of the Petroleum Exporting Countries won’t push for supply cuts in the near-term, even if oil prices fall further. Brent crude was trading at just over $US70 a barrel on Wednesday………………………………………..Full Article: Source

Hedge fund manager Andurand sees oil down to $50 in 2015

Posted on 04 December 2014 by VRS  |  Email |Print

Brent crude will continue its collapse to $60 a barrel by the end of the year and reach $50 in early 2015 as Opec stops balancing the global market, according to hedge fund manager Pierre Andurand.
Oil inventories will swell by 1mn to 2mn barrels a day in the first half of next year as Saudi Arabia and other Opec nations refrain from paring output to tackle a global glut, said the founder of Andurand Capital Management, who called the top of the oil market in 2008. The trader anticipated lower prices before Opec’s gathering, according to a November 11 investor letter………………………………………..Full Article: Source

Six reasons oil’s price plunge has shaken the markets

Posted on 04 December 2014 by VRS  |  Email |Print

Oil is a key economic input and its price has fallen sharply. All things being equal, that’s a plus for global growth, but the markets are in turmoil. Here are six key reasons why oil’s price plunge has the markets gyrating.
In 2011, 2012 and last year oil averaged $US95.13 a barrel, $US94.15 a barrel and $US98.05 a barrel respectively, a spread of just $US3.90. It averaged $US100 a barrel in the first six months of this year and got to $107.26 a barrel on June 20. Monetary policy was still loose and the consensus was that the oil price would not move sharply in either direction………………………………………..Full Article: Source

Gold price holds above $1,200/oz as market stabilises

Posted on 04 December 2014 by VRS  |  Email |Print

The gold price drifted gently either side of $1,200 in the US on Wednesday as the breakneck volatility of the past several sessions temporally subsided. The gold price for February delivery on the Comex division of the New York Mercantile Exchange was last up $4.20 at $1,203.60 per ounce.
“In comparison to the last few days, [it is] a very quiet day in the wonderful world of precious. Gold took a breather and traded around the $1,200 level, with a bit of profit taking seen early in the day, moving it down to $1,192 briefly,” Marex Spectron’s David Govett said. “With the dollar strengthening and the stock market remaining firm, precious metals took a back seat and I suspect, with the occasional silly move, will stay that way until the figures later this week,” he added………………………………………..Full Article: Source

Commodity prices keep falling in November

Posted on 03 December 2014 by VRS  |  Email |Print

New Zealand commodity prices declined for the ninth consecutive month in November, to the lowest level since February last year, as milk powder prices fell to five-year lows. The ANZ Commodity Price Index dropped 1.6 per cent to 286.3 last month, 12.4 per cent lower than its reading the same month a year ago and the lowest for a November month since 2012. Skim milk powder fell 7 per cent, while whole milk powder dropped 6 per cent, with both series at their lowest since 2009.
Today’s data comes ahead of the GlobalDairyTrade auction overnight. Since the start of the year dairy prices have halved at the GDT auctions as over-supply and weaker demand in China, the biggest destination for New Zealand’s largest export, weighs on prices………………………………………..Full Article: Source

What you need to know about falling oil prices

Posted on 03 December 2014 by VRS  |  Email |Print

Put simply, global oil supplies are exceeding demand and driving down prices in the process. A major factor has been the explosion in U.S. oil production, which is up to almost 9 million barrels per day and expected to hit the highest levels in four decades next year.
Another factor is the struggling economies in Asia and Europe leading to a decrease in oil consumption. China, one of the world’s largest oil consumers, has seen its economic struggles result in its demand for oil being outpaced in Asia by India, a country that has also struggled financially of late. Saudi Arabia also cut the price of its own crude to the U.S. earlier this month, which has further propelled the sell-off………………………………………..Full Article: Source

Lower Oil Prices Will Help Boost Global Economy, IMF’s Lagarde Says

Posted on 03 December 2014 by VRS  |  Email |Print

International Monetary Fund chief Christine Lagarde on Monday said falling oil prices will help boost economies in the U.S. and across much of the globe, a net positive for a world struggling with slowing growth. “It is good news for the global economy,” Ms. Lagarde said at The Wall Street Journal CEO Council annual meeting.
Oil prices tumbled to multiyear lows last week after the Organization of the Petroleum Exporting Countries decided to maintain its production quotas, rather than lowering its output target. Lower oil prices are good for most consumers, who pay less for gasoline, but could squeeze energy companies and the economies of some major producers like Russia and Venezuela………………………………………..Full Article: Source

Russia’s Economics ministry downgrades 2015 oil price forecast to $80 per barrel

Posted on 03 December 2014 by VRS  |  Email |Print

Russia’s Economic Development Ministry has downgraded its 2015 oil price forecast to 80 dollars per barrel and this year’s average — to 99 dollars per barrel, Deputy Economic Development Minister Aleksey Vedev told the media on Tuesday.
“The expected average price of oil next year has been down to 80 dollars per barrel from 100 dollars,” he said. “Since the oil prices are on the decline now, the 2014 price of the Urals blend should be lowered to 99 dollars from the originally expected average of 104 dollars.”……………………………………….Full Article: Source

Gold price to end 2015 at $1,250 per ounce, silver $18 – Commerzbank

Posted on 03 December 2014 by VRS  |  Email |Print

The gold price will end next year at $1,250, with the negative impact of the US interest-rate rises in the second half of the year likely to keep prices above $1,100, Commerzbank said. “We expect the gold price to remain under pressure initially in the first half of next year on the back of growing speculation about increasingly imminent interest rate hikes in the US,” the bank said.
“The gold price is likely to bottom out at the onset of the cycle of rate hikes in the second quarter,” it added. Spot gold was last around $1,200 per ounce, down significantly from a 2014 peak of $1,388 in March and up from four-year lows at $1,131.60 in November………………………………………..Full Article: Source

Citi Forecasts Average 2015 Gold Price Of $1,220/Oz, Silver $16.50/Oz

Posted on 03 December 2014 by VRS  |  Email |Print

Citi Research forecasts 2015 gold prices to average $1,220 an ounce and silver prices to average $16.50 an ounce, saying they are neutral on the prices for those precious metals. The bank says it is bullish on platinum and palladium prices, forecasting average 2015 prices of $1,350 an ounce and $870 an ounce, respectively.
All of these price forecasts are above current price levels. Gold prices fell under a host of bearish influences, from negative investor sentiment, a stronger U.S. dollar and low inflation expectations, Citi said. The metal may continue to see weaker prices, but “there are increasing reasons to think that further downside moves will be limited,” they said………………………………………..Full Article: Source

Commodity prices: Why the selloff may continue in 2015

Posted on 02 December 2014 by VRS  |  Email |Print

Several of the world’s key commodities — including oil, gas, gold and corn — have been suffering the worst months of trading since the commodities crash of 2008. Back then, the main reason for downturn in prices was obvious: the credit crisis and subsequent panic about global economic growth.
Yet today, while global growth is more sluggish than hoped in certain parts of the world — particularly in China — the overall economic picture seems much brighter than in 2008………………………………………..Full Article: Source

Why volatility in commodity prices is still nothing close to a ‘crash’

Posted on 02 December 2014 by VRS  |  Email |Print

When looking at commodity prices, investors tend to have short memories. Words like “crash” and “collapse” have been thrown around with frequency in recent days and weeks. The panic appeared to hit a high point on Monday morning, when commodities fell sharply in the early hours before rebounding through the afternoon.
But experts noted that the current market action does not rate as anything close to a “collapse.” To see what that looks like, one only has to look back six years………………………………………..Full Article: Source

Oil Prices: Where’s The Bottom?

Posted on 02 December 2014 by VRS  |  Email |Print

It’s amazing how quickly attitudes change. OPEC, once cock of the walk, is now seen as helpless and hopeless, all for not implementing a minor production cut. Mere weeks ago, some were talking about $150 as a target for next year, and now a $30 prices is being bruited about as a possibility. While it’s true that consistency is the hobgoblin of little minds, oil pundits are now inflicting whiplash on their audience.
Certainly, the price is lower than I thought it would be at this point, in part because the market imbalance is nothing compared to the weakness during the 1986 oil price collapse, when OPEC production had dropped by 50% in five years………………………………………..Full Article: Source

Oil price: five consequences of the falling prices

Posted on 02 December 2014 by VRS  |  Email |Print

The growing oil glut could drive oil prices as low as $40 a barrel, experts say – and that may be a good thing. The decision by members of the Organisation of the Petroleum Exporting Countries (Opec) last week not to cut production could have a profound effects on the global economy, analysts say, but not all of them will be negative.
Oil prices plummeted to a four-year low last week after Opec opted to keep its production ceiling unchanged, with some analysts predicting that prices could fall even further, possibly to around $40 a barrel………………………………………..Full Article: Source

OPEC Fires First Shot In Global Oil Price War

Posted on 02 December 2014 by VRS  |  Email |Print

OPEC’s decision not to cut production to shore up oil prices drove down the price of oil even further in a strong challenge to American shale oil producers - or, in less delicate language, the start of an all-or-nothing price war.
The immediate result of OPEC’s decision was a further drop in the price of the world’s leading benchmark oil, Brent crude, which lost $6.50 per barrel , falling to $71.25 on Nov. 27, its worst performance in a single day since 2011. Brent soon had a weak rally, raising its value to $72.55. The price of oil has now dropped by nearly 40 percent since mid-June………………………………………..Full Article: Source

Gold Prices Down After Swiss Voters Nix Gold Measure

Posted on 02 December 2014 by VRS  |  Email |Print

In a poor showing for the commodities market, oil prices also reached their lowest levels since June 2009. Gold prices slid downward on Monday after Swiss voters nixed a measure to bump up the nation’s gold reserves, while oil prices also fell to a five-year low as the Organization of the Petroleum Exporting Countries (OPEC) decided to maintain crude oil production levels.
The rejected Swiss proposal, defeated by 78% of voters, would have required the Swiss National Bank to more than double its gold reserves, holding at least 20% of its assets in the precious metal, Reuters reports. The measure would have challenged the bank’s policy of capping the Swiss franc at 1.20 per euro………………………………………..Full Article: Source

China holds the gold price key

Posted on 02 December 2014 by VRS  |  Email |Print

Those gold bug optimists who reckoned the likely Swiss Gold referendum ‘No’ vote had already been discounted by the markets were initially proven wrong. With some forlorn gold hopes hanging on for a surprise ‘Yes’ vote, the result was going to produce a knee-jerk reaction downwards as it will have perhaps prompted more selling from exasperated gold investors.
As the almost certainty of a ‘No’ vote became apparent, the gold price dipped quite sharply in late trading on Friday, and this morning, now the referendum result has become fact with the ‘No’ vote comfortably prevailing, it initially moved another few notches downwards, but has since made something of a strongish recovery back to the $1,170s………………………………………..Full Article: Source

Gold price to end year at $1,250-1,300/oz

Posted on 02 December 2014 by VRS  |  Email |Print

The gold price will end 2015 in a range of $1,250-1,300 per ounce as long as any US interest rate rises are modest, ETF Securities said. Higher rates look highly likely after the end of quantitative easing (QE) in the US and the reinvigoration of the economy. Rates have has been near-zero since December 2008.
The outlook for gold is especially uncertain, ETF Securities said in a note on Monday. “Ordinarily, a positive economic environment, in which some major central banks will likely raise interest rates, will be a gold negative scenario. However, there are a number of events which could drive a surprise increase in the price,” it added………………………………………..Full Article: Source

Copper bounces off four-year low

Posted on 02 December 2014 by VRS  |  Email |Print

Copper futures have closed higher, reversing earlier losses, as a weaker US dollar offset pressure from disappointing manufacturing data from China. The most actively traded contract, for March delivery, rose US5.2c, or 1.8 per cent, to settle at $US2.8980 a pound on the Comex division of the New York Mercantile Exchange.
A weaker greenback, which retreated against a basket of international currencies, pushed copper prices higher. The ICE Dollar Index fell 0.4 per cent to 87.96 after Moody’s cut Japan’s credit rating by one notch………………………………………..Full Article: Source

US sheet steel buyers hunting for price direction after Thanksgiving holiday

Posted on 02 December 2014 by VRS  |  Email |Print

The US sheet steel market remained stable but sluggish Monday as buyers sought price direction following last week’s Thanksgiving holiday. One buyer said he believes the hot-rolled base price is at or close to bottom at about $630/st. Thickness extras, freight and other ancillary items are being discounted to keep base prices firm, he said.
“How much does it cost — hypothetically — to slow down a mill to run 16 gauge [coil] when it’s not full?” he said. “The whole expense is time on the mill — but if the mill is running low, there’s no real expense. Maybe a little roller wear, but that’s hard to quantify as well. Those are free things to give away and make a deal.”……………………………………….Full Article: Source

Oil at $40 Possible as Market Transforms Caracas to Iran

Posted on 01 December 2014 by VRS  |  Email |Print

Oil’s decline is proving to be the worst since the collapse of the financial system in 2008 and threatening to have the same global impact of falling prices three decades ago that led to the Mexican debt crisis and the end of the Soviet Union.
Russia, the world’s largest producer, can no longer rely on the same oil revenues to rescue an economy suffering from European and U.S. sanctions. Iran, also reeling from similar sanctions, will need to reduce subsidies that have partly insulated its growing population………………………………………..Full Article: Source

Oil Price Drop Forces OPEC Member Iraq to Weigh Spending Cuts

Posted on 01 December 2014 by VRS  |  Email |Print

The plunge in oil prices is forcing the Iraqi government to consider spending cuts even as the conflict with Islamic State threatens to shrink economic output for the first time in at least three years.
The government formed a panel to look into ways to cut next year’s proposed budget deficit to a “realistic level,” according to a cabinet statement released during the weekend. The current budget proposal envisages a budget deficit of about 47 trillion Iraqi dinars ($39 billion)………………………………………..Full Article: Source

Does the Oil Price Collapse Put the High Yield Market at Risk?

Posted on 01 December 2014 by VRS  |  Email |Print

The high yield market may have a taken a big hit on Thanksgiving day. The cause – a collapse in the price of oil on OPEC’s decision to leave oil production unchanged, something that Francisco Blanch of BofA Merrill Lynch Global Research told CNBC viewers is anything but temporary and as such something that will not be kind to the companies that operate in the oil sector. Blanch begins…
… if you are going to let the market balance itself as OPEC has stated, it’s going to be a pretty painful process. We know that production costs for many shale producers are meaningfully below the current spot prices………………………………………..Full Article: Source

Oil Price Crash, Gold Price Bottom Trend Forecast 2015

Posted on 01 December 2014 by VRS  |  Email |Print

It’s time to do a follow-up to my last Golden Bottom article. We are coming down to the wire and the action on Monday after the Swiss referendum should tell us whether gold has already formed a final bear market low, or whether we have one more drop in this intermediate cycle to the $1050 level before the final bottom.
If the vote is a yes then I suspect gold will reverse all of Friday’s losses and immediately head back up confirming that we got the final bear market bottom in early November………………………………………..Full Article: Source

Oil price plunges after Opec split keeps output steady

Posted on 28 November 2014 by VRS  |  Email |Print

Oil prices have crashed to a new four-year low, below $72 per barrel, after a major split inside Opec forced the cartel to hold production at current levels rather than make cuts to try to turn the market around.
The reduced cost of energy - prices are now down 37% since the summer - should be a boost to British consumers and the wider economy, but experts warned the North Sea oil industry is now facing a slump in investment and major job cuts. There are now predictions that the price of Brent blend could fall to as low as $60, which would be disastrous for countries with high producing costs and economies dependent on oil and gas, such as Russia and Iran……………………………………Full Article: Source

Saudis block OPEC output cut, sending oil price plunging

Posted on 28 November 2014 by VRS  |  Email |Print

Saudi Arabia blocked calls on Thursday from poorer members of the OPEC oil exporter group for production cuts to arrest a slide in global prices, sending benchmark crude plunging to a fresh four-year low.
Brent oil LCOc1 fell more than $6 to $71.25 a barrel after OPEC ministers meeting in Vienna left the group’s output ceiling unchanged despite huge global oversupply, marking a major shift away from its long-standing policy of defending prices……………………………………Full Article: Source

The Opec oil price still matters (just not as much as before)

Posted on 28 November 2014 by VRS  |  Email |Print

A cursory glance at the history of the oil price since the second world war tells its own story. There are booms when the price of oil is low and busts when the cost of crude rises. Four spikes in oil since 1973 have been matched by four recessions over the same period.
The so-called postwar golden age is also the story of a flatlining oil price, which remained at around $2 a barrel during that period. Five Middle Eastern nations formed the Organisation of the Petroleum Exporting Countries in 1960 but it was more than a decade before Opec bared its teeth……………………………………Full Article: Source

World on brink of oil price war as Opec set to keep pumping

Posted on 27 November 2014 by VRS  |  Email |Print

Oil slumped on Wednesday as expectations that Opec will cut production faded following dovish remarks by cartel kingpin Saudi Arabia, which could signal the beginning of a price war. Speaking on the sidelines ahead of Thursday’s critical meeting of the Organisation of Petroleum Exporting Countries (Opec) in Vienna, Saudi oil minister Ali Al-Naimi said: “The market will stabilise itself eventually”.
His remarks were interpreted by the market as a signal that the cartel would keep its production ceiling at 30m barrels per day (bpd), which sent the price of crude lower…………………………………..Full Article: Source

Saudi oil minister expects oil price to ’stabilise’ as OPEC gathers

Posted on 27 November 2014 by VRS  |  Email |Print

Oil prices are likely to again come under pressure Wednesday after Saudi Arabia’s oil minister showed little sign of concern ahead of a crucial meeting of the Organisation of Petroleum Exporting Countries (Opec). Speaking to reporters on the sidelines of the gathering of some of the world’s biggest oil producing countries in Vienna, Ali Al-Naimi said: “The market will stabilise itself eventually”.
He added that that Opec had made no decisions ahead of its formal meeting tomorrow after he met with senior oil emissaries of Russia’s President Vladimir Putin on Tuesday…………………………………..Full Article: Source

Russia sees average oil price at $80-90 in medium, long-term

Posted on 27 November 2014 by VRS  |  Email |Print

Russia sees an average oil price of around $80-90 per barrel in the medium- and possibly in the long-term, Finance Minister Anton Siluanov said on Wednesday, underlining growing pressure on the Russian budget.
Russia needs an oil price of $100 per barrel to balance its 2015-2017 budget and has watched nervously as Brent has lost around 30 percent since June. On Wednesday it traded at around $78 per barrel before an OPEC meeting to discuss the price…………………………………..Full Article: Source

Gold price eyed as investors await Swiss vote

Posted on 27 November 2014 by VRS  |  Email |Print

Gold prices slipped on Wednesday from this week’s highs, as the market awaited a Swiss referendum on central bank gold reserves. On November 30, voters in Switzerland will head to the polls to decide whether the Swiss National Bank (SNB) should refrain from selling any more gold and should boost its gold holdings to 20 percent, up from current levels of 7 percent.
The ultra-conservative Swiss People’s party proposed the initiative, called “Save Our Swiss Gold”, with the intention of boosting the security and independence of Switzerland in times of uncertainty…………………………………..Full Article: Source

Gold rangebound below $1,200/oz as Asia buying evaporates

Posted on 27 November 2014 by VRS  |  Email |Print

Gold eased slightly on Wednesday then steadied at just under $1,200 an ounce for another rangebound session as Asian overnight buying evaporated amid low volumes ahead of the US Thanksgiving holiday and a key Swiss vote on bullion holdings.
The US dollar retreated after data suggested US economic growth might be slowing in the final quarter of 2014. Oil was pulled lower after OPEC increased signals that it would hold off making any major production cuts this week…………………………………..Full Article: Source

Venezuela Seeks Oil Price Up Back at $100 a Barrel

Posted on 26 November 2014 by VRS  |  Email |Print

Venezuela wants oil prices to return to $100 a barrel, the country’s foreign minister said on Tuesday, ahead of an OPEC meeting. Speaking to reporters, Rafael Ramirez, who will represent Venezuela at the Organization of the Petroleum Exporting Countries gathering on Thursday, said “the [oil] price has to be $100 per barrel, [that] is a fair price.”
Ramirez made the remarks as he exited a meeting with fellow OPEC member Saudi Arabia and envoys from Russia and Mexico, two key oil producers outside the group. The price of Brent crude, the global benchmark, was quoted at $78.40 a barrel on Tuesday following the meeting, down 1.6%……………………………Full Article: Source

Iran parliament suggests $75-80/bbl oil price for budget

Posted on 26 November 2014 by VRS  |  Email |Print

Iran’s parliament recommends basing next year’s budget on an oil price of $75-80 a barrel, a senior lawmaker was reported as saying on Monday, down from $100 in the 2014 budget plan. “It seems the trend of decline in oil prices will continue and a return to previous oil prices is not expected,” the official IRNA news agency reported Gholamreza Tajgardoon, head of parliament’s planning and budget commission, as saying.
“Parliament and the planning commission recommend an oil price of about $80 a barrel to the government,” he said when asked about how the fall of oil prices would affect the budget. “The price of oil for the budget still can’t be announced, but it seems with caution and foresight, it will be based on a barrel of oil between $75 and $80,” he said……………………………Full Article: Source

Gold prices may surge if Swiss vote on reserves passes

Posted on 26 November 2014 by VRS  |  Email |Print

Global gold prices may surge in the coming week if Swiss voters approve a controversial measure that would force their country’s central bank to keep at least a fifth of its assets in gold. If the referendum Sunday passes and the Swiss government is forced to start beefing up its reserves, the price of gold could jump to more than $1,350 an ounce — an increase of 18%, Bank of America predicts.
Spearheaded by the right-wing Swiss People’s Party, the so-called Save Our Gold law would compel the Swiss National Bank, the country’s central bank, to increase its gold reserves from the current 7.7% to 20% within five years……………………………Full Article: Source

Will Swiss Politics Cause Gold Price to Rally?

Posted on 26 November 2014 by VRS  |  Email |Print

Referendums are a way for democracies to put an issue directly to the electorate to decide. The issue might be a constitutional amendment; a vote on independence; the legalisation of marijuana; or the legality of bear baiting. In the rarified world of central banking, a Swiss referendum on November 30 mandating the country’s central bank to hold a large portion of its assets in gold captured my attention.
In the post-Great Crisis age, central banks are the apex player in economic and financial matters. Consequently, an effort to materially limit a central bank’s degree of freedom is a noteworthy event…………………………..Full Article: Source

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