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The end of oil price volatility

Posted on 03 September 2014 by VRS  |  Email |Print

Oil supplies from the Middle East have been savaged by violence, sanctions and instability. Libya, home to Africa’s largest oil reserves, has cut exports by 80% since its ports fell into the control of militias last year. Sanctions have cut 1.5m barrels of oil a day from Iranian exports while strife in Iraq, Venezuela and Nigeria has cost hundreds of thousands of barrels a day in production.
All up, about 3.5m barrels of oil from these regions has been stricken from global supply. Yet oil prices have fallen. In fact, the past four years have seen the most stable prices in recent history. How is that possible with so much conflict and strife? There is a new force in global oil: North America………………………………………..Full Article: Source

Gold price plunges to two-month low

Posted on 03 September 2014 by VRS  |  Email |Print

Gold prices fell to a two-month low and palladium posted its steepest decline in two months overnight, as pressure from a stronger US dollar snuffed out investor appetite for the haven assets. Gold for December delivery, the most actively traded contract, fell $US22.40, or 1.7 per cent, to $US1265 an ounce, the lowest closing price since June 11 on the Comex division of the New York Mercantile Exchange.
The US dollar gained on investors’ expectations of stimulus efforts by the European Central Bank after its chief Mario Draghi signalled that further accommodative steps are necessary to revive the region’s economy. The ICE dollar index, which tracks the greenback against a basket of currencies, rose to 83.03, its highest level in more than a year………………………………………..Full Article: Source

HSBC Sees Gold Ranging From $1,150 To $1,350 For Rest Of 2014

Posted on 03 September 2014 by VRS  |  Email |Print

HSBC said Tuesday it sees gold trading in a range of $1,150 to $1,350 an ounce during the remainder of 2014 in a market “searching for a new equilibrium” with a number of offsetting factors. The bank left its 2014 average price forecast at $1,292 an ounce and listed 2015 and 2016 forecasts of $1,310 and $1,345.
“Gold is searching for a new equilibrium after last year’s price plunge, which ended the more than decade-long bull run,” HSBC said. “The massive gold-exchange-traded funds (ETFs) outflows of 2013 –which were instrumental in driving prices lower – have largely abated. Another positive is that net long positions on the Comex are rebuilding. Other factors supporting prices are that mine production gains are plateauing, scrap supplies are down and central bank demand is steady.”……………………………………….Full Article: Source

Gold and Silver Price A Critical Juncture

Posted on 03 September 2014 by VRS  |  Email |Print

Gold and silver are at a critical juncture - either they break down to new lows soon or a major new uptrend is about to start. Which is it? - while we cannot be 100% sure either way, we can certainly attempt to figure which way they are likely to break.
Many have been tempted to conclude, because of the dismal response to date by the Precious Metals to the growing geopolitical tensions in various regions of the world, that this is an indication of intrinsic weakness, and that they are therefore destined to break down soon, but there is another way of looking at it………………………………………..Full Article: Source

Oil Prices Fall Despite Global Tensions

Posted on 02 September 2014 by VRS  |  Email |Print

Oil prices are lower Monday even though tensions in a number of key oil-producing areas are on the rise. In Ukraine, fears of a larger conflict escalated as government forces lost more ground to Russian-backed separatists, while in the Middle East, U.S. airstrikes continued in Iraq, checking some of the advances made by radical Sunni militants.
Those developments weren’t enough to move the oil price significantly, as the market remains well supplied with crude oil. Prices had drifted higher Friday, but fell back somewhat on Monday. “The ample supply situation is precluding any significant rise in prices,” said Commerzbank………………………………………..Full Article: Source

The case for a September gold price surge

Posted on 02 September 2014 by VRS  |  Email |Print

July, August and September are typically gold’s strongest performing months. But gold dropped 2.7% in July, and barely managed a gain in August. Gold futures inched higher on Monday as investors sought safe-haven assets amid increased tensions between Ukraine and Russia, after fighting intensified over the weekend.
Gold for December delivery rose slightly to $1,288 on Monday and historically holding gold going into September reaps investors a more than 3% return………………………………………..Full Article: Source

Palladium price touches a more than 13-year high on worries of further sanctions on Russia

Posted on 02 September 2014 by VRS  |  Email |Print

Palladium surged to a more than 13 ½-year high above $900 a troy ounce today on concerns more sanctions against Russia could affect supply from the world’s largest producer.
A day after the EU threatened to impose further punitive measures against Russia unless it de-escalated the situation in Ukraine within a week, Russian president Vladimir Putin said talks between the Ukrainian government and separatists in the east of the country should start immediately and be about “not just technical issues but on the political organisation of society and statehood in south-eastern Ukraine,” the Guardian reported………………………………………..Full Article: Source

What’s Behind the Current Global Commodity Price Slump?

Posted on 01 September 2014 by VRS  |  Email |Print

As the year 2014 got underway, it looked as if commodities in general, and energy, in particular, were headed for a boom year. And with an accelerating economic recovery, U.S. Treasury interest yields surprisingly dropping to post-recession lows, along with deteriorating geopolitical turbulence, the first quarter did not disappoint.
In fact, the newly-christened Bloomberg Commodity Index (renamed from DJ-UBS Index) reached the best quarter since the beginning of the 2008 recession. In doing so, it far surpassed the stock market’s S&P 500 performance during the first quarter 2014. But by the middle of May, a remarkable reversal set in, and has followed with a downdraft that brought the Bloomberg Industrial commodities down from the first quarter’s 21% growth peak to a negative 10% drop into the early part of August, with no rebound in sight………………………………………..Full Article: Source

Artificially low Silver prices and monetary policy gone wrong

Posted on 01 September 2014 by VRS  |  Email |Print

The purpose of a taboo is to avoid destruction. Those who do not respect the taboos of a culture endanger the cultural identity. Therefore, disregarding the taboos produces self-destruction and/or destruction.
Many of you read Jeff Clark’s (of Casey Research) recent piece outlining the reasons why silver prices will likely move higher. It was a great piece from an organization with great reach. But it missed the unmentionable elephant in the room. Here is a summary in all its bullish glory………………………………………..Full Article: Source

Goldman Sachs sees nickel price rally continuing into 2015

Posted on 29 August 2014 by VRS  |  Email |Print

US investment bank Goldman Sachs said the refined nickel market has shifted from a major surplus in 2013 to a much smaller surplus in 2014, according to a research note Thursday, adding that prices are likely to continue to rally into 2015.
The bank notes that the buildup of LME warehouse stocks is merely a moving of stock from an Australian stockpile (since the start of 2013) and from Chinese bonded warehouses (following the Qingdao port investigation in Q2, when the authorities launched an investigation into trading companies for allegedly using warehouse receipts multiple times to secure financing from banks)………………………………………..Full Article: Source

Dearth of oil finds threatens long-term supplies, price

Posted on 28 August 2014 by VRS  |  Email |Print

The rate of oil discoveries continues to disappoint after a record low last year and firms could even cut their exploration budgets to save on costs, a risk to long-term supplies and prices, industry executives said.
Explorers are finding so little oil, many are retreating from high-risk frontier areas to safer bets like North American shale, executives at a major Norway oil conference said. This will likely force them to buy expensive discoveries once investor sentiment shifts focus to reserves from cash flow………………………………………..Full Article: Source

Reasons behind oil price stability despite turmoil

Posted on 28 August 2014 by VRS  |  Email |Print

These are really changing times. It is no longer enough to have a coup a plane hijack or violence erupting in one oil producing country to have prices skyrocketing.
The hotspots are all over the map of the Middle East from key producers such as Iraq and Libya to marginal ones like Yemen and the two Sudans to ongoing tightened sanctions against Iran. Brent crude prices that briefly rose in midJune above 115 following the take-over of Iraq’s city of Mosul by IS radicals dropped to 14-month low a few days ago………………………………………..Full Article: Source

Gold price ‘could have some way to fall yet’

Posted on 28 August 2014 by VRS  |  Email |Print

Investors should ignore the ‘myths’ that surround gold as an investment and not buy at the current level, despite the fact that the asset class is trading at 33 per cent below its peak valuation of just three years ago, according to Brian Dennehy, managing director of FundExpert.co.uk.
Dennehy remarked, ‘Usually, there is a negative correlation between the performance of the dollar and the price of gold. Many people expect the dollar to start performing better now that tapering is coming to an end, and indeed it already has started to perform better, and generally speaking if the dollar is performing better then the price of gold will usually perform poorly.’ ……………………………………….Full Article: Source

Zinc and nickel prices to move ‘dramatically higher’ in 2015

Posted on 28 August 2014 by VRS  |  Email |Print

Zinc and nickel prices could move dramatically higher over the next two years as a cyclical recovery takes hold in the base metal sector, says a new report from Scotiabank. Prices for zinc and nickel have been steadily rising this year as global growth continues to rebound, fuelling stronger prices for base metals.
Patricia Mohr, commodity market specialist at Scotiabank, said zinc and nickel are in a good position because they are either in or nearing supply deficit positions………………………………………..Full Article: Source

Reasons behind oil price stability despite turmoil

Posted on 27 August 2014 by VRS  |  Email |Print

These are really changing times. It is no longer enough to have a coup, a plane hijack or violence erupting in one oil producing country to have prices skyrocketing. The hotspots are all over the map of the Middle East from key producers such as Iraq and Libya to marginal ones like Yemen and the two Sudans to ongoing tightened sanctions against Iran. Brent crude prices that briefly rose in mid–June above $115 following the take-over of Iraq’s city of Mosul by IS radicals dropped to 14-month low a few days ago.
Moreover, and following the downing of the Malaysian Airliner in mid-July, prices rose some 2 percent or $1.99 a barrel in New York Mercantile Exchange, but only to reach $104 a barrel and briefly before retreating again………………………………………..Full Article: Source

Iran’s Oil Minister: Not Alarmed by Crude Price

Posted on 27 August 2014 by VRS  |  Email |Print

Iran’s oil minister said Tuesday he wasn’t alarmed by a recent drop in crude oil futures, reflecting a widely- held view among oil producers that prices are still at an acceptable level and their decline won’t last. The remarks suggest members of the Organization of the Petroleum Exporting Countries–of which Iran is one of the largest–won’t need to alter their production for the time being.
Iran’s oil minister Bijan Zanganeh was quoted by his ministry’s Shana website as saying “crude oil prices on global markets are at an appropriate level and seasonal fluctuations in crude oil prices will not continue.”……………………………………….Full Article: Source

Gold price lifted out of danger zone

Posted on 27 August 2014 by VRS  |  Email |Print

On the Comex division of the New York Mercantile Exchange, gold futures for December delivery on Tuesday attempted a comeback of sorts, recovering from a two month low. By the close of regular trade gold was changing hands for $1,285.20 an ounce, up over $6, after earlier hitting a day high of $1,291.90. The gains follow six weak sessions which saw the metal lose 2% in value.
Tuesday’s move lifted the metal above its 200-day moving average – a bullish technical sign – after bouncing off support at $1,272 and could now attempt a move back above $1,300 an ounce………………………………………..Full Article: Source

Global Copper Deficit May Support Prices – Morgan Stanley

Posted on 27 August 2014 by VRS  |  Email |Print

The global copper market is at its biggest deficit in seven years, says Morgan Stanley, citing data from the International Copper Study Group. The group says the copper deficit is 466,000 metric tons for the January-May timeframe, versus a 250,000 surplus in the same period of 2013, Morgan Stanley says, while adding its full-year forecast is for a 90,000 ton deficit.
ICSG also showed global use was up 15% year-over-year, with strong demand out of China seen. “Given this wide supply shortfall, we remain comfortable with our forecast for deficit conditions this year and next, as well as progressively higher prices,” Morgan Stanley says, also forecasting London Metal Exchange copper prices to average $7,165 a metric ton in the fourth quarter………………………………………..Full Article: Source

Saudi Aramco CEO says OPEC will take oil price “as it comes”

Posted on 26 August 2014 by VRS  |  Email |Print

The global oil price is market driven, fluctuating with supply and demand and the Organization of the Petroleum Exporting Countries or the International Energy Agency should not try to control it, the chief of Saudi Arabia’s state oil producer said.
“I share … the belief that this is a market driven business, it’s not OPEC, the IEA, and consumers that should be in the business of trying to control the market,” Khalid Al-Falih, the chief executive of Saudi Aramco, told a conference in Norway on Monday………………………………………..Full Article: Source

Low Oil Prices Could Crush Russian Economy

Posted on 26 August 2014 by VRS  |  Email |Print

Oil remained under pressure from plentiful supplies and October Brent crude eased 18 cents to $102.11 a barrel. WTI crude lost 18 cents to $93.47 a barrel. As tensions around the globe continue to escalate oil supplies remain higher than expected.
Federal Reserve Chair Janet Yellen on Friday nodded to the concerns of some Fed officials about the sustained level of monetary policy stimulus, even as she stressed the need to move cautiously on raising rates. In a stronger language than he has used in the past, ECB President Mario Draghi on Friday stressed the central bank is prepared to respond with all its “available” tools should inflation drop further………………………………………..Full Article: Source

Gold price drops to near 2-month low

Posted on 26 August 2014 by VRS  |  Email |Print

Gold held close to its lowest in two months on Monday, as the dollar marched higher after central bank heads signaled that interest rates were set on a diverging course in the United States, Europe and Japan.
At a gathering of central bankers in Jackson Hole, Wyoming, Federal Reserve Chair Janet Yellen nodded to the concerns of some Fed officials about the sustained level of monetary policy stimulus, even as she stressed the need to move cautiously on raising rates. The heads of the European Central Bank and Bank of Japan pledged more policy stimulus, which weighed on the euro and the yen versus the US currency………………………………………..Full Article: Source

As Commodity Prices Slide, Big Miners Seek a Sustainable Strategy

Posted on 26 August 2014 by VRS  |  Email |Print

Navigant Research’s report, Renewable Energy in the Mining Industry, summed up the state of the global mining business: “In the last decade, increased demand from countries such as China and other emerging economies pushed the price of many metals and minerals upward, which stimulated investment in the mining industry.
More recently, the global economic downturn and the collapse in a number of metal and mined commodity prices forced the mining industry to scale back investment into new mine sites, reduce operating mine lives, and scale back their investment into more capital expenditure-heavy renewable energy.”……………………………………….Full Article: Source

U.S. gasoline prices continue to drop -Lundberg survey

Posted on 25 August 2014 by VRS  |  Email |Print

The average price of a gallon of gasoline in the United States fell by 4 cents in the past two weeks as crude oil prices continued a broad decline, according to the Lundberg survey released on Sunday. Prices fell to an average of $3.48 per gallon for regular grade gasoline, according to the survey conducted Aug. 22. That extends a decline in prices to nine weeks, survey publisher Trilby Lundberg said.
“This is really a reflection of the crude oil market, and crude oil is by far the biggest component in the retail price of gasoline and is the chief determinant as to directional movement in the retail price of gasoline,” said Lundberg………………………………………..Full Article: Source

Gold should be $1,400/oz: Global Investors’s Holmes

Posted on 25 August 2014 by VRS  |  Email |Print

Frank Holmes, CEO and CIO of US Global Investors, a company known for its focus on the natural resources sector, says he believes the price of gold should be $1,400 per ounce, according to an interview on Ceo.ca. Holmes mentions several reasons for his bullish stance on the yellow metal, including economic concerns in Europe and China that trigger stimulus.
“We saw, three weeks ago, Germany go to a negative real interest rates. Well, when that happens all of a sudden you start seeing gold rise in euro terms,” Holmes tells interviewer Shannon Nelson………………………………………..Full Article: Source

Gold Price Manipulation Still Alive

Posted on 25 August 2014 by VRS  |  Email |Print

If one looks at a longer term chart of the last two years it’s very clear that gold is being capped at certain levels, and those levels are slowly forcing gold lower and lower. Each one of these manipulation zones are being defended successfully and that has some serious connotations going forward.
This all started right after the announcement of QE3. Gold was driven below $1700 and held below that level for 2 months. This got the ball rolling so to speak, it broke an intermediate cycle and started the bear market. Of course we all remember the call by GS to sell gold short followed by the premarket attack on April 12 that took out the stops below $1520 leading to a waterfall decline. That had to be one of the most blatant cases of manipulation in market history………………………………………..Full Article: Source

Copper prices make a comeback

Posted on 25 August 2014 by VRS  |  Email |Print

Copper is mounting a comeback as investors grow more confident about the global economy. Prices rose 3.3% last week, after a major commodities trading house surprised markets with an upbeat forecast for copper demand in the second half of this year, while data from the U.S. show an economic rebound is gaining traction.
Some investors also believe China, the world’s largest consumer of the metal, may be preparing to launch a second round of economic stimulus, which could further boost copper demand. Copper’s rally has nearly reversed a sharp drop recorded earlier this month, although prices are still down about 7% for the year………………………………………..Full Article: Source

EIA: Brent crude oil price stability continues

Posted on 22 August 2014 by VRS  |  Email |Print

Spot prices of Brent crude oil averaged $107/bbl in July, marking the 13th consecutive month in which the average price has ranged $107-112/bbl. Compared with the volatility seen as recently as 2 years ago when Brent spot prices ranged as high as $125/bbl in March 2012 to as low as $95/bbl in June 2012, this price stability has been remarkable, according to the US Energy information Administration.
Implied volatility—a measure of expected price variation—for the near-month Brent futures contract has averaged 18% over the past 12 months compared with 28% during the previous 24 months………………………………………..Full Article: Source

Low Commodity Prices Could Affect 2014 Equipment Purchases

Posted on 21 August 2014 by VRS  |  Email |Print

With fall right around the corner, farmers are gearing up to harvest one of the largest crops in history. Corn production for 2014/15 is forecast 172 million bushels higher at a record 14 billion bushels. USDA’s first survey-based corn yield forecast, at a record 167.4 bushels per acre, is up 2.1 bushels from last month’s trend-based projection.
In Mid-June, more than 581 farmers across the country took part in AgWeb’s 2014 Equipment and Machinery Research survey. Participants were surveyed on product questions across eight categories, including: tractors combines, sprayers, irrigation, grain storage, implements, tillage and financial sectors………………………………………..Full Article: Source

Crude Oil Price Drop Takes Pressure Off the Fed

Posted on 21 August 2014 by VRS  |  Email |Print

Nymex crude oil futures have dropped 3% in two days to $94.48 per barrel and they’re down 10% from a year ago. The bad news in this drop is the implication of soft global demand when many economists were looking for a lift in worldwide economic growth. The good news is that markets have weathered months of grisly conflicts in the Middle East and Ukraine and the supply worries that come with the shooting.
If Iraqi and Kurdish forces continue to push back Islamic State forces which are deeply opposed to advanced economy values, or if Russian and Ukrainian adversaries cool off, market angst about Middle East and Russian energy supplies could further dissipate………………………………………..Full Article: Source

Why Aren’t Gold Prices Rising?

Posted on 21 August 2014 by VRS  |  Email |Print

The numbers are in… In the second quarter of 2014, world central banks bought 117.8 tonnes of gold bullion compared to 92.1 tonnes a year earlier—a jump of 28%. Central banks have been net purchasers of gold bullion for 14 consecutive quarters!
According to the World Gold Council, “Economic and geopolitical events throughout the world are sources of ongoing instability and uncertainty. Such events reinforce the requirement for appropriate risk management by central banks through holding gold reserves for asset diversification.”……………………………………….Full Article: Source

Palladium Rally Overdone Look For Prices To Fall By Year-End - Capital Economics

Posted on 21 August 2014 by VRS  |  Email |Print

Palladium’s powerful performance in this year has garnered a lot of market attention, but one research firm said it expects the metal’s current rally to lose momentum during the second half of the year.
In a report released Wednesday, Caroline Bain, senior commodities economist at Capital Economics, said the firm is lowering its year-end price forecast for palladium to $800 per ounce, from their previous forecast of $875………………………………………..Full Article: Source

OPEC unruffled by oil price slide, sees market rebound: delegates

Posted on 20 August 2014 by VRS  |  Email |Print

OPEC is not worried about a slide in oil prices towards US$100 a barrel, delegates from the producer group said, with current levels seen as acceptable for producers while higher seasonal demand in the coming weeks was expected to support the market.
Brent crude fell to a 14-month low of US$101.11 a barrel on Monday as investor concerns over conflict in Ukraine and Iraq eased and Libyan output rose. The drop brought prices below the level some in OPEC need for their budget needs. But delegates from three members of the Organization of the Petroleum Exporting Countries told Reuters on Tuesday the decline in prices was not an immediate concern………………………………………..Full Article: Source

Price of oil plummets! Who wins, who loses, and how low can it go?

Posted on 20 August 2014 by VRS  |  Email |Print

The barrel price of West Texas Intermediate crude oil has been falling since late June, and the fall is accelerating. Monday’s closing price was $96.63; Tuesday’s opening price was $94.02. Back in early July, I argued that oil’s downward move was not over , but I confess, I’m surprised by the speed of the current drop.
Factor in seasonal considerations, and the drop appears even more extreme, as oil prices tend to be high in August and September. Does that mean that we should expect oil prices of $90, $85 or even lower in October and November, when prices typically fall? I believe it does, for two reasons………………………………………..Full Article: Source

Lower oil price adds to economic pressure on Russia

Posted on 20 August 2014 by VRS  |  Email |Print

A fall in the price of Urals crude oil, the benchmark on which Russia bases its budget calculations, is adding to the government’s problems at a time when western sanctions are already hurting the economy. Urals, fell below $100 per barrel on Monday for the first time in 15 months and was trading just below $97 on Tuesday, extending a trend of falling oil prices that reflects abundant supply on global markets.
Russia relies on oil and gas for around two-thirds of exports and half of federal budget revenues. Over the course of a year, each $1 fall in the oil price wipes around $1.4 billion off federal tax revenues………………………………………..Full Article: Source

Russian oil prices fall below $100/barrel, straining budget

Posted on 19 August 2014 by VRS  |  Email |Print

Russian Urals crude weakened for an eight straight trading day on Monday due to weak European refining demand, falling well below $100 a barrel for the first time in a year in a move to increase the pain for Russian state finances amid Western sanctions.
Russia has balanced its budget at $114 a barrel this year as President Vladimir Putin is ramping up social military spending amid a conflict in Ukraine, which sent relations between Moscow and the West to their worst since the end of the Cold War………………………………………..Full Article: Source

Oil price tumbles as supply trumps political troubles

Posted on 19 August 2014 by VRS  |  Email |Print

The price of oil has fallen to its lowest in more than a year as a supply glut allows markets to shrug off concerns over the crisis in Ukraine and the impact of Islamist rebels in Iraq.
Brent crude fell in London by more than 2 per cent yesterday to $101.30, taking the price to its lowest level since June 2013, days after it had jumped amid fears of an escalation in the conflict between Ukraine and Russia………………………………………..Full Article: Source

Russia tensions push palladium to $900

Posted on 19 August 2014 by VRS  |  Email |Print

Palladium touched $900 a troy ounce on Monday for the first time since 2001, taking this year’s price gain to 25 per cent. The precious metal, which is used mainly in catalytic converters in petrol-powered cars, has benefited from real and potential supply disruptions in the two main producing countries.
In South Africa, a five-month miners’ strike crippled output of the metal, pushing the global market further into deficit. Though work resumed in June, its output there has yet to recover to previous levels………………………………………..Full Article: Source

Palladium rises to 13-year high

Posted on 19 August 2014 by VRS  |  Email |Print

Palladium futures climbed to a 13-year high on concern that global supplies will trail demand for the metal used in pollution-control devices in cars, exacerbating a deficit. Gold fell. Through August 15, palladium jumped 25 percent this year following a five-month mine strike that ended in June in South Africa, the world’s second-biggest producer.
The conflict in Ukraine spurred the US and European Union to impose sanctions on Russia, the top supplier. Production will trail demand this year by the most ever after the strike, according to London-based Johnson Matthey Plc, which makes a third of the world’s catalytic converters………………………………………..Full Article: Source

Oil prices below most OPEC producers’ budget needs

Posted on 18 August 2014 by VRS  |  Email |Print

Oil prices are now too low for most OPEC countries to cover their spending needs, a Reuters survey shows. Although the cost of getting oil out of the ground is low in most countries in the cartel, growing social spending and ambitious infrastructure plans mean many oil producers now earnless from their oil sales than they need to fund their budgets.
The weighted average of oil prices collected by members of the Organization of the Petroleum Exporting Countries was $106 a barrel last year - just enough to cover the average budget requirements of the group, according to figures compiled by one team of analysts, who declined to be identified. But oil prices are falling, and the OPEC crude oil basket price was just $100.88 a barrel on Wednesday, the OPEC Secretariat calculates………………………………………..Full Article: Source

Why Oil Prices That “Should” Be Going Higher Are Going Lower

Posted on 18 August 2014 by VRS  |  Email |Print

The world has changed. Even two years ago, with a war going on by proxy between Russia and Ukraine, we’d have seen a ten dollar rally in the price of crude, not prices below $97, like we’re seeing today. Add to that the Iraq crisis in the North, the continuing Syrian conflict, the destabilization in the oil producing countries of Libya and Egypt and you’d have been shocked - at least in 2011 - to see prices go decisively under $100 a barrel and act badly there. What’s going on here?
One long-term trend in the oil market and one very short-term trend have made the difference between a price that ’should’ be higher, but is in fact going lower. We need to really understand those changes to track where oil prices will go next and where those underlying oil stocks are headed………………………………………..Full Article: Source

After the Boom–Commodity Prices and Economic Growth in Latin America and the Caribbean

Posted on 15 August 2014 by VRS  |  Email |Print

After skyrocketing over the past decade, commodity prices have remained stable or eased somewhat since mid-2011—and most projections suggest they are not likely to resume the upward trend observed in the last decade. This paper analyzes what this turn in the commodity price cycle may imply for output growth in Latin America and the Caribbean.
The analysis suggests that growth in the years ahead for the average commodity exporter in the region could be significantly lower than during the commodity boom, even if commodity prices were to remain stable at their current still-high levels. Slower-than-expected growth in China represents a key downside risk. The results caution against trying to offset the current economic slowdown with demand-side stimulus and underscore the need for ambitious structural reforms to secure strong growth over the medium term………………………………………..Full Article: Source

Oil Prices Keep Tumbling to Multi-Month Lows

Posted on 15 August 2014 by VRS  |  Email |Print

Oil prices skidded Thursday, hitting multi-month lows on a sluggish demand outlook. The European Union announced Thursday that euro-zone economic growth was flat in the second quarter. Demand for oil from European refineries has been weak this spring and summer, leaving some cargoes in the Atlantic searching for buyers last month.
Global supplies are ample, and investors are continuing to discount the possibility that violence in the Middle East and Eastern Europe could cause a supply interruption………………………………………..Full Article: Source

Energy Journal: Libyan Supply Set to Increase Price Pressures

Posted on 15 August 2014 by VRS  |  Email |Print

More news likely to put downward pressure on oil prices overnight as it emerged that Libya’s largest oil-exporting port is to resume service shortly. As Summer Said and Benoit Faucon report, the Es Sider port will resume operations next week. The port is capable of loading around 340,000 barrels of oil per day and there are some big tankers anxiously waiting to start taking on the crude that’s been piling up in storage in Libya.
With another large Libyan port already having reopened this week, hopes will be rising of a return of significant amounts of Libyan oil to international markets………………………………………..Full Article: Source

Here’s What the New Silver Price Fix Means for Prices

Posted on 15 August 2014 by VRS  |  Email |Print

The much-maligned London silver price fix ended (Thursday) after 117 years, and market observers are hoping the new pricing mechanism will herald an era of true and transparent silver price discovery.
Silver pricing could definitely use more transparency, following a century-old mechanism that involved three banks negotiating prices in secret. The three member banks were facing lawsuits after accusations arose that they were manipulating prices, so it’s no wonder that some are expecting a free market transition………………………………………..Full Article: Source

Commodity Price Volatility: What Should Distributors Do?

Posted on 14 August 2014 by VRS  |  Email |Print

Dealers in commodities, or in parts that use a significant amount of a commodity with large price fluctuations, have significant business challenges. In previous articles I’ve written about the nature and impacts of commodity price volatility: This article will cover the two challenges of dealers: pricing and working capital.
The owner of a gas station has the same pricing challenge as a copper and brass distributor or a cocoa wholesaler: how to set selling prices when your buying prices change frequently. To understand the right way to set prices, it’s easiest to understand the wrong way: pricing based on historic cost. Let’s say that the gas station owner marks up the price of gas by 50 cents, so when he buys for $3.50, he sells for $4.00………………………………………..Full Article: Source

Iran: $100 Desirable Price for Crude Oil

Posted on 14 August 2014 by VRS  |  Email |Print

Iranian Oil Minister Bijan Namdar Zanganeh expressed satisfaction with the current global price for crude oil. “I have never favored an oil price below $100 (for a barrel) and now we have the best price for crude oil and all sides are satisfied with that price,” Namdar Zanganeh told reporters on Tuesday.
In reply to a question about the future of crude oil market, the Iranian minister said no forecast is saying that the market will remain unchanged. Asked about oil giant Royal Dutch Shell’s debts to Iran, the Iranian oil minister said that the company has no problem to pay its debts, but the problem lies in transferring the money to Iran………………………………………..Full Article: Source

Petrol prices expected to fall after Saudis open the oil taps

Posted on 14 August 2014 by VRS  |  Email |Print

Petrol prices are poised to fall further after the cost of a barrel of crude oil reached its lowest level this year. The fall followed the publication of an influential report that showed a glut of crude from Saudi Arabia flowing on to the market and rising stockpiles.
The Paris-based International Energy Agency, the leading oil think tank, said yesterday that the world will consume less crude than experts had thought this year. Saudi Arabia’s supplies are running at the highest level since last September and crude from Libya is back on the market………………………………………..Full Article: Source

Oil Price is in ‘Sweet Spot’

Posted on 14 August 2014 by VRS  |  Email |Print

Oil prices have remained stable despite political unrest in the Middle East, and fund manager Nordea predicts this high-price, low-volatility environment to continue.
Despite many important macroeconomic and geopolitical events, the past two years have seen oil prices remarkably stable at a fairly high level. With respect to Brent crude, now considered the industry’s global benchmark, prices have held between $100 and $115 per barrel over the past 24 months. Today’s price of $103 is not too far away from the price two years ago………………………………………..Full Article: Source

Gold going to $5,000 per ounce: Mining executive

Posted on 14 August 2014 by VRS  |  Email |Print

While the exchange-traded fund covering gold miners is outperforming the precious metal itself, McEwen Mining founder and chief owner Robert McEwen said Wednesday that he remains bullish on gold.
“I’m a long term believer in gold and I see it ultimately getting to $5,000 an ounce,” McEwen said on CNBC’s “Fast Money.” “Anything short of that, I wouldn’t be hedging.” McEwen, who owns 25 percent of his company and receives no salary, said that he expects gold to hit his price target of $5,000 in the next three to four years………………………………………..Full Article: Source

What’s Been Supporting Gold Prices?

Posted on 14 August 2014 by VRS  |  Email |Print

Most explanations for these results point to the various geopolitical risks that have generated jitters across a number of markets. However, there is another explanation. Expectations that monetary policy will remain loose across major economies longer than originally anticipated have been driving gold higher. Here are some key indicators supporting this thesis:
1. As discussed earlier (here), China’s monetary policy continues to be quite supportive for credit expansion. 2. Japan’s growth will likely fall short of the BOJ’s projections (see chart), prompting the central bank to accelerate QE or at least maintain it over a longer period. Credit Suisse: “We see additional BoJ easing coming in November.”……………………………………….Full Article: Source

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