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The 2015 Metals Outlook Series: Gold

Posted on 27 November 2014 by VRS  |  Email |Print

Gold has peaked, but the current price schizophrenia of spikes and troughs that have been experienced over the last six months will soon be at an end. However there is still likely to be pain for a number of unproductive gold miners as the commodity price goes through a rationalisation phase operations with high costs per ounce are likely to fall as the market becomes tighter.
But how did we get to this point, and how did the great decade long Bull Run get to its current state, and where will it head in 2015? The rise and fall of the gold market did not happen overnight; and it is not the first time this market has moved this frenetically either…………………………………..Full Article: Source

ANZ Cuts Commodity Price Forecasts on Slowing Chinese Growth

Posted on 14 November 2014 by VRS  |  Email |Print

Australia & New Zealand Banking Group Ltd. trimmed its price projections for commodities including oil, iron ore and nickel next year on slowing growth in China and rising inventories.
The bank cut its forecasts by an average 5.1 percent for next year and 3.8 percent for 2016, analysts including Mark Pervan wrote in a report today. The lender reduced its 2015 iron ore estimate by 22 percent to $78 a metric ton and its Brent crude outlook by 8.2 percent to $92 a barrel…………………………………Full Article: Source

Here’s What A Sustained $20 Drop In Oil Prices Does To The World’s Major Economies

Posted on 13 November 2014 by VRS  |  Email |Print

Oil prices have been tumbling in recent weeks. The price of brent crude fell below $80 per barrel today for the first time in since September 2010. That’s down from around $115 earlier this summer.
A research note from Societe Generale’s Michala Marcussen takes a look at the possible effects of a drop in oil prices on the world economy. She plugged a sustained $20/barrel drop in oil prices into Britain’s National Institute of Economic and Social Research’s NiGEM software, a sophisticated global macroeconomic model, and saw what would happen to global GDP in the following years………………………………………..Full Article: Source

Iron Ore Seen by Citigroup Below $60 as 2015 Forecast Cut

Posted on 12 November 2014 by VRS  |  Email |Print

Iron ore prices will plummet to less than $60 a metric ton next year as global supply increases and demand remains weak, according to Citigroup Inc., which slashed its quarterly forecasts for 2015 by as much as 23 percent.
The raw material will average $72 a ton in the first three months of 2015, down from an earlier forecast of $82, Ivan Szpakowski, an analyst in Hong Kong, wrote in a report dated today. The second-quarter forecast was cut to $65 from $80, while the third was reduced to $60 from $78 and the figure for the final three months was put at $62 from $78, he wrote………………………………………..Full Article: Source

Commodities Upturn Seen By 2016

Posted on 11 November 2014 by VRS  |  Email |Print

The resources boom may have faded, but the “super cycle” is far from over. That was the message from the Mining 2014 conference in Brisbane, Australia, with analysts forecasting an upturn even as key commodity prices continue to slide.
On Thursday, the price of iron ore dropped to a five-year low of $75.38 per ton in China, continuing a retreat that has seen the key steelmaking ingredient lose nearly half its value this year on a continued supply glut and weaker demand from China. According to Morgan Stanley, oversupply will drive the price of spot iron ore to $70 a ton by year-end, with the world’s biggest miners continuing to expand output………………………………………..Full Article: Source

Gold will get downside support from physical buying: Barclays

Posted on 05 November 2014 by VRS  |  Email |Print

In the near term, physical buying is likely to offer some support on the downside. The prospect of firmer rates, coupled with an expectation for a stronger dollar, present significant headwinds for gold and are likely to skew risks to the downside, a report by Barclays said.
Barclays has given a price forecast of Q4 2014:$1220/oz, 2014: $1271/oz, 2015: $1180/oz. Although the end of the asset purchase program was widely anticipated, the hawkish tilt was not, and the gold market again reacted negatively to the prospect of rate hikes. Gold has struggled to battle a stronger dollar and last week’s reaction underscores gold’s sensitivity to rising rates………………………………………..Full Article: Source

What Next for the Gold Price?

Posted on 29 October 2014 by VRS  |  Email |Print

Gold is often the gateway ETF for many investors eager for exposure to the perceived safe haven. But what should we expect from the precious metal in the future? Commodity ETPs have seen their largest inflows in six weeks, with bargain-hunters attracted by depressed valuations. Inflows into physical gold reach six week high.
Several commodities including Brent, platinum, palladium and most industrial metals rose last week rebounding on the back of the better investor sentiment toward commodities. With many commodities trading so close to their marginal cost of production, we believe that prices cannot fall much lower without triggering a supply response. Better-than-expected GDP and industrial production data from China, the world’s largest consumer of commodities, also helped boost cyclical commodity prices………………………………………..Full Article: Source

Goldman slashes its crude oil price forecasts by US$15 for 2015

Posted on 27 October 2014 by VRS  |  Email |Print

Goldman Sachs has cut its price forecast for Brent and West Texas Intermediate by US$15 a barrel for the first quarter of 2015 because rising production in non-OPEC countries outside North America is expected to outstrip demand.
The U.S. investment bank slashed its forecast for WTI to US$75 a barrel from US$90 and for Brent to US$85 a barrel from US$100, it said in a research note on Sunday. The bank’s analysts expect WTI to fall to as low as US$70 a barrel and Brent to US$80 a barrel during the second quarter of next year, when it expects oversupply to be the most pronounced………………………………………..Full Article: Source

5 reasons oil prices aren’t rising

Posted on 27 October 2014 by VRS  |  Email |Print

The old oil bull market, the one where oil went to $140 per barrel, now feels like ancient history. Oil prices have recently been challenging lows not seen since 2012. Continuously rising oil prices not only translate to higher prices at the pump but also to higher prices of goods because of the increased production and transportation costs. But now the economy is dealing with steadily falling oil prices in recent months, which can contribute to deflation — itself a source of concern.
24/7 Wall St. wanted to focus on five key reasons the price of oil is not rising. There are, of course, more than just five reasons for oil prices not rising. We avoided the role of currency movements, which have lately added a new curve ball — the dollar has rallied against major currencies, and oil is priced in dollars. Another factor we have not explored is Iran. If Iran’s energy infrastructure comes back online in full, this could further add to downward pressures on oil prices………………………………………..Full Article: Source

Bank of Canada to issue report on the effect of low oil prices

Posted on 23 October 2014 by VRS  |  Email |Print

The Bank of Canada’s latest read on the national economy is expected to explore a pressing question Wednesday: How much are low oil prices affecting the country’s bottom line? The price of oil recently hit a two-and-a-half year low, a sharp fall that is prompting Canadian policy-makers and the corporate world alike to reflect on the potential risks of lower prices.
The central bank has indicated it would attempt to measure the impact of tumbling prices in its quarterly monetary policy report, scheduled for release on Wednesday………………………………………..Full Article: Source

Gold demand up, more buying needed:Barclays

Posted on 22 October 2014 by VRS  |  Email |Print

Given that the Diwali holiday is this week, ahead of the wedding season, Gold demand is expected to improve, potentially offsetting macro headwinds in the near term. However, buying needs to pick up materially to overwhelm the gold-negative external drivers, a report by Barclays said.
Broad risk reduction amid tumbling equity markets, the sharp decline in US 10y Treasuries, and weaker-than-expected US retail sales have fueled uncertainty and aided gold’s bounce. The gold-supportive macro environment has seen gold extend its gains above the $1200/oz mark as the dollar has weakened, the St Louis Fed discussed the possibility of further stimulus, and, importantly, demand picked up amid the seasonally strong period for consumption………………………………………..Full Article: Source

Crude Falls on OPEC Production Concerns

Posted on 21 October 2014 by VRS  |  Email |Print

U.S. and global crude benchmarks ended lower Monday amid choppy trading and concerns that member nations of the Organization of the Petroleum Exporting Countries will maintain high production levels in a bid to compete for market share despite growing global crude supplies.
Light sweet crude futures for front-month November delivery ended the day down 4 cents at $82.71 a barrel on the New York Mercantile Exchange. The contract was steady in early trading but slipped through midmorning, and stabilized in the afternoon. November futures expire Tuesday and most of the volume in the market has moved forward into the December contract, which ended down 15 cents at $81.91 a barrel………………………………………..Full Article: Source

IEA reduces global oil demand forecast again on slower economic growth

Posted on 21 October 2014 by VRS  |  Email |Print

The International Energy Agency’s Oil Market Report (OMR) for October continues to reduce its forecast of global oil demand for 2014 by 200,000 b/d from the previous month, to 92.4 million b/d, in line with lower expectations of economic growth and the weak recent trend. Annual demand growth for 2014 is now projected at 700,000 b/d, rising tentatively to 1.1 million b/d in 2015, as the macroeconomic backdrop improves.
In its October World Economic Outlook, the International Monetary Fund (IMF) cut its forecast of economic growth for 2014 and 2015 for the third time this year to 3.3% and 3.8% (vs. July’s 3.4% for 2014 and 4% for 2015) respectively, led by revisions for Europe, China, Brazil, and Russia………………………………………..Full Article: Source

IEA reduces global oil demand forecast again on slower economic growth

Posted on 21 October 2014 by VRS  |  Email |Print

The International Energy Agency’s Oil Market Report (OMR) for October continues to reduce its forecast of global oil demand for 2014 by 200,000 b/d from the previous month, to 92.4 million b/d, in line with lower expectations of economic growth and the weak recent trend. Annual demand growth for 2014 is now projected at 700,000 b/d, rising tentatively to 1.1 million b/d in 2015, as the macroeconomic backdrop improves.
In its October World Economic Outlook, the International Monetary Fund (IMF) cut its forecast of economic growth for 2014 and 2015 for the third time this year to 3.3% and 3.8% (vs. July’s 3.4% for 2014 and 4% for 2015) respectively, led by revisions for Europe, China, Brazil, and Russia………………………………………..Full Article: Source

Why are commodity prices falling?

Posted on 20 October 2014 by VRS  |  Email |Print

Abundant supplies and a slowed global economy, especially in China, led to a considerable decline in commodity prices. Moreover, the strong dollar and fiscal stimulus withdrawal in the U.S., sanctions against and by Russia, as well as an increase in oil production were also influential. Bulgaria on Air reports.
The slowdown in Chinese demand for milk powder and a good harvest contributed to the drop, particularly in the foods market. The Food and Agriculture Organization’s (FAO) cereal price index in August dropped by 11.7 percent, in comparison to last year, and by 1.5 percent compared to July. Wheat and corn prices hit a four-year low. Iron-ore hit a five-year low, sugar is the lowest since 2009 and oil the lowest since June 2012………………………………………..Full Article: Source

Gold price upside limited in 2015 - Scotiabank

Posted on 20 October 2014 by VRS  |  Email |Print

In the latest edition of the Scotiabank Commodity Price Index, published on Thursday, Scotiabank economist Pat Mohr observed, ““Spot gold prices fell as low as US$1,183 intra-day on October 5 - re-testing the previous low of US$1,180 on June 20, 2013 - after the Fed Chairman indicated that Federal Reserve Board would likely reduce its ‘asset purchase program’ in 2014 (quantitative easing),” Mohr observed in her analysis.
“Miners continue to cut costs in today’s lower price environment - reducing ‘all-in sustaining cash costs for high-cost producers at the 80th percentile to no more than US$1,055,” she said. “While we think the upside on gold prices will be limited in the coming year, the successful re-testing of the previous low shows some support for gold,” Mohr suggested……………………………………….Full Article: Source

Declines in commodity prices likely to continue through 2015, says WB report

Posted on 17 October 2014 by VRS  |  Email |Print

Prices of most commodities, particularly oil, are expected to remain weak for the remainder of this year and through much of 2015, says the World Bank’s latest issue of Commodity Markets Outlook. Growing concern over a slowdown in the Euro Area and emerging economies, a strong US dollar, a well-supplied oil market and good crop prospects have contributed to a weakening of many commodity prices since the summer. The World Bank energy price index declined by about 6 percent during the third quarter, after being broadly stable in the first half of the year.
“A broad-based expansion in commodity supply is coinciding with weakness in global growth, especially in emerging economies, where most of the demand expansion has been taking place,” said Ayhan Kose, Director of the World Bank’s Development Prospects Group………………………………………..Full Article: Source

Thomson Reuters Publishes GFMS Copper Survey Update 2014

Posted on 16 October 2014 by VRS  |  Email |Print

Thomson Reuters today released an interim update to the 2014 edition of the GFMS Copper Survey: Growth spurt in supply as global consumption slows, sets scene for further price weakness. Copper is forecast to average $6,810/tonne in 2014 (3-month LME), a 7.3% decline year-on-year.
Notwithstanding the weak performance year-to-date, down 10.5% year-on-year, we expect the metal to trade lower in the final quarter with a forecast of $6,500/tonne, or an approximate 2% decline from current prices………………………………………..Full Article: Source

World LPG prices plummet on financial market weakness

Posted on 15 October 2014 by VRS  |  Email |Print

NYC-based PIRA Energy Group reports that PIRA’s restructured U.S. gasoline balances provide greater clarity and insight. In the U.S., large crude stock build, small product stock draw, and widening commercial stock excess. In Japan, crude stocks build despite higher runs. Specifically, PIRA’s analysis of the oil market fundamentals has revealed the following:
PIRA’s restructured US Gasoline balances provide greater clarity and insight: PIRA’s restructured gasoline balances are in response to the steep decline in volume and the relevance of finished gasoline stocks and imports. The changes to the EIA’s finished balance came about as a result of the decline in MTBE and the rise in ethanol, as the oxygenate of choice………………………………………..Full Article: Source

Barclays remains cautious on gold prices

Posted on 14 October 2014 by VRS  |  Email |Print

The precious metals endured intense downward pressure a week ago amid a stronger dollar and firmer rates, and last week a reversal of the macro dynamics has enabled the precious metals, gold in particular, to stage something of a bounce.
In line with Barclays expectations, from the lows reached at the end of last week, both of the PGMs have staged the strongest recovery with gold prices trading back above $1200 an ounce, as physical buying has returned in both India and China w/w. However, Barclays remains cautious on gold prices, and continue to see the macro environment presenting headwinds and would look for opportunities to sell into a rally………………………………………..Full Article: Source

Palladium Still the Fairest Precious Metal: BMO Capital Markets

Posted on 14 October 2014 by VRS  |  Email |Print

BMO Capital Markets made waves last week with the announcement that it’s lowered its price expectations for gold , silver and platinum. That’s bad news for precious metals investors, but luckily there’s still one such metal that the firm believes will do well. That, of course, is palladium.
In a report, BMO Nesbitt Burns analyst Jessica Fung said the firm sees gold averaging $1,190 per ounce in 2015, lower than its previous forecast of $1,275, and $1,238 in 2016, a drop from $1,250. Meanwhile, it sees platinum averaging $1,413 in 2015, down from the previously announced $1,500, and just $1,425 in 2016, a decline from $1,550………………………………………..Full Article: Source

Gold rebounds on reversal of macro dynamics, caution advised: Barclays

Posted on 13 October 2014 by VRS  |  Email |Print

Gold has rebounded on reversal of macro dynamics after witnessing intense downward pressure last week on stronger dollar nd firmer rates. With demand returning to India and China, precious metals seem to be a on a better footing. However, Barclays said it remains cautious on gold prices and continue to see the macro environment preseting headwinds and would look for opportunities to sell into a rally.
Gold prices are trading back above $1200/oz, buoyed by a relatively more supportive external environment w/w,as well as gold-specific factors turning comparatively positive.The FOMC minutes provided a boost to gold as markets concluded that the Fed may remain patient before moving to rate hikes. Meanwhile, physical demand has materialised at lower price levels………………………………………..Full Article: Source

BMO cuts gold, silver, platinum price outlook

Posted on 10 October 2014 by VRS  |  Email |Print

BMO Capital Markets warns miners should prepare for a “prolonged period of sub-US$1,200/oz gold prices.” As a result, “many of the gold producer equities will struggle, especially those with higher cash costs and/or high debt loads,” cautioned BMO Nesbitt Burns analyst Jessica Fung in a report issued October 7th.
“Gold, silver and platinum prices remain under considerable pressure due to expectations for the U.S. dollar to continue strengthening,” Fung advised. BMO has lowered 2015-16E gold prices from $1,275 to $1,190 in 2015 and from $1,250 to $1,238 in 2016 to reflect recent price performance, adding “BMO Research does not expect any upset for gold from current levels until H2/16E based on U.S. dollar forecasts.”……………………………………….Full Article: Source

IMF forecasts weigh on oil

Posted on 09 October 2014 by VRS  |  Email |Print

Oil prices fell further in Asian trade on Wednesday on demand concerns after the International Monetary Fund (IMF) cut its the global economic growth forecasts, analysts said. The US benchmark, West Texas Intermediate for November delivery, was down 35 cents at a 17-month low of $88.50 a barrel in late-morning trade and Brent crude eased 36 cents to $91.75 - lows not seen since mid-2012. Both contracts tumbled on Tuesday.
Singapore’s United Overseas Bank said in a note that prices were being “pressured by reduced economic and demand growth forecasts”. The IMF on Tuesday said the global economy would grow 3.3 percent this year, down 0.1 percentage point from July’s estimate and 0.4 points off its April forecast………………………………………..Full Article: Source

BMO Cuts Gold, Silver, Platinum Forecasts for 2015

Posted on 09 October 2014 by VRS  |  Email |Print

BMO Capital Markets cut its outlook for gold, silver and platinum prices, predicting that the precious metals will lag other commodity markets next year. In a research report regarding 2015 forecasts, the Canadian bank lowered its average 2015 gold forecast to $1,190 an ounce, down from $1,275. It reduced its silver forecast to $17.50 from $20.25 and its platinum forecast to $1,413 from $1,500.
As of Wednesday afternoon, gold for December delivery had fallen 0.53% to was trading at $1,206 per ounce. BMO, however, raised its palladium outlook to $860 from $853 and predicted that nickel and aluminum likely finding support on improving fundamentals………………………………………..Full Article: Source

Commodity themes 2015: Expect metals to be bullish, Oil to fall further

Posted on 08 October 2014 by VRS  |  Email |Print

Amidst a strengthening US dollar, rise in equity markets, commodities are likely to underperform in the coming months. However, metals complex appears bullish,according to a new report titled Commodity Themes 2015 released by Deutsche Bank.
Brent oil physical fundamentals are weak and appearance of contango in Brent oil market will eventually be met with OPEC production cuts to tighten fundamentals and restore backwardation.Falling Brent crude oil prices are already impacting budgetary positions among the major oil producers. History shows that when OPEC takes action and cuts production, their efforts to stabilise and push oil prices are successful. However, this is contingent on world GDP growth in excess of 2.5%………………………………………..Full Article: Source

EIA sees lower OPEC output, weaker demand growth in 2015

Posted on 08 October 2014 by VRS  |  Email |Print

The U.S. Energy Information Administration trimmed its forecast of world oil demand growth next year and made even deeper cuts in its outlook for OPEC production, the latest signs of a shift toward surplus supplies next year. The EIA cut its 2014 global demand forecast to 91.47 million barrels a day, compared with 91.55 million bpd expected last month, according to a monthly report from the agency on Tuesday.
As a result, it now expects consumption to rise by 1.24 million bpd, down 100,000 bpd from the previous month’s report but still higher than the 1 mln bpd increase estimated for 2014. On the backdrop of weakening demand, the agency curbed its forecasts for OPEC oil and other liquid fuels production to 35.51 million barrels a day in 2015, down 350,000 bpd from last month’s forecast………………………………………..Full Article: Source

Oil Plunge Magnifies Russia’s Sanctions Pain: Chart of the Day

Posted on 08 October 2014 by VRS  |  Email |Print

Oil prices that have plunged to a 27-month low are inflicting damage on a Russian economy already contending with escalating sanctions from the U.S. and European Union over its role in Ukraine. The CHART OF THE DAY shows how an average oil price of $90 a barrel, close to where prices are now, would give Russia a budget deficit of 1.2 percent of gross domestic product next year, according to Sberbank CIB, the investment bank of Russia’s biggest lender.
The right axis shows the budget balance as a percentage of GDP under different oil-price scenarios. The left axis measures spending and revenues in trillions of rubles………………………………………..Full Article: Source

Soft Commodities - Third-Quarter Review And Outlook For The Rest Of 2014

Posted on 07 October 2014 by VRS  |  Email |Print

The composite of five soft commodities - sugar, coffee, cocoa, cotton and frozen concentrated orange juice futures - fell by 3% during Q3. The sector is up 13.83% for the first nine months of 2014. While commodity prices in general fell, there were some bright spots for bulls in this sector of “luxury” commodities.
Let us look at the action in the softs and the outlook for the balance of 2014. The price of sugar moved 14.41% lower in Q4, but is up 2.3% through the first nine months of 2014. Sugar traded in a range of 13.32 cents to 19.83 cents per pound thus far in 2014………………………………………..Full Article: Source

Sterne Agee Sees Gold at $1,400 in 2015

Posted on 07 October 2014 by VRS  |  Email |Print

It’s only natural that last week’s drop in gold prices would have investors wondering where the precious metal will trade a year from now. According to Sterne Agee analysts Michael Dudas and Satyadeep Jain, gold and silver prices will trend higher as “global demand remains firm, liquidity remains ample and the dollar appears overbought.”
How high? Dudas and Jain forecast gold prices averaging $1,400 in 2015 and $1,450 in 2016. As for silver prices, the pair see an average price of 19 next year and $21 in 2016. For investors, the pair recommend gold midnight stocks, rating Newmont Mining (NEM), Agnico-Eagle Mines (AEM), Coeur Mining (CDE) and Gold Resources (GORO) as Buys………………………………………..Full Article: Source

Investors rush to sell commodities ETFs in September, says Markit

Posted on 03 October 2014 by VRS  |  Email |Print

Investors rushed to sell holdings in commodity exchange traded funds (ETFs) in September, data from Markit showed on Thursday, as prices slumped for the month. Physical gold ETF holdings saw a monthly outflow of $1.67 billion, the biggest drop this year, while sugar saw a fall of $315 million the largest outflow for any month for the past five years, the data showed.
Gold futures fell 6.1 per cent in September, the biggest such slide since June 2013, while sugar prices fell to the lowest level in more than four years last month with the slide driven by abundant supply. There were outflows of $221 million from crude oil for the month, the biggest such movement since May. The price of Brent crude fell 8.3 per cent, its biggest drop since May 2012………………………………………..Full Article: Source

IMF calls for more global growth

Posted on 03 October 2014 by VRS  |  Email |Print

The head of the International Monetary Fund (IMF) has urged new momentum to fuel global economic growth that has recovered slower than expected. Christine Lagarde, the IMF managing director, said on Thursday that the main job now is to help the global economy shift gears and overcome what has been so far a disappointing recovery - one that is brittle, uneven and beset by risks.
“Yes there is a recovery but as we all know, and can all feel it, the level of growth and jobs is simply not good enough. The world needs to aim higher and try harder, to do it together and be country-specific,” Lagarde told an audience of mostly students and faculty at Georgetown University in Washington………………………………………..Full Article: Source

Global Oil market balances to deteriorate in 2015: PIRA Energy

Posted on 02 October 2014 by VRS  |  Email |Print

NYC-based PIRA Energy Group reports that PIRA is cautiously optimistic the global economy will withstand the Fed’s policy shift. In the U.S., stock build slows. In Japan, crude runs perk up, crude stocks draw. Specifically, PIRA’s analysis of the oil market fundamentals has revealed the following:
World Oil market forecast, September 2014: PIRA is cautiously optimistic the global economy will withstand the Fed’s policy shift and lift into next year with growth above trend. Despite this, and a rebound in oil demand growth, oil market balances are forecast to deteriorate in 2015. Low first half 2014 stocks hid blemishes but now that inventories have rebuilt………………………………………..Full Article: Source

Energy Economist: The shifting fundamentals of commodity demand

Posted on 24 September 2014 by VRS  |  Email |Print

Economic growth in emerging markets has driven energy commodity demand over the last decade, but that growth is now slowing. According to the IMF, GDP growth in emerging markets fell from 7% a year on average in 2003-2008 to 6% in 2010-13.
The Fund forecasts that emerging market growth will dip further to 5% from 2014-2018. The medium-term outlook is no better. The IMF writes: “In the past, we expected growth to bounce back (and it did). This time seems different.” One of the expected spillover effects is lower commodity prices. Despite ongoing conflicts in the Middle East and North Africa, the supply/demand balance in the oil market continues to look increasingly bearish………………………………………..Full Article: Source

Great American Group Analysts See Prices Rise for Many Base Metals

Posted on 24 September 2014 by VRS  |  Email |Print

Analysts with GA Advisory and Valuation Services, LLC, a division of Great American Group, Inc. report that pricing has increased for a number of non-ferrous metals in recent months amid tight physical supplies, despite lackluster demand in certain segments. In particular, pricing for aluminum, zinc, and lead climbed higher than expected.
“Stockpiles are dwindling and supply deficits are expected for these metals,” noted Michael Petruski, Executive Vice President of Great American Group’s Advisory and Valuation Services division. “Zinc prices have jumped nearly 25% over the year, as zinc production is slated to fall short of demand for the first time in seven years.” (Press Release)

Moody’s cuts price assumptions for natural gas, oil through 2015

Posted on 23 September 2014 by VRS  |  Email |Print

Moody’s Investors Service last week reduced its assumptions for average spot prices for North American natural gas after a mild summer cut demand for gas-powered electricity. Moody’s also cut its assumption for the spot prices for the two benchmark barrels of crude, European Brent and West Texas Intermediate (WTI). Oil prices dropped this past summer due in part to slower economic growth in some of the world’s major economies, a strengthened U.S. dollar, and growing non-OPEC supply, Moody’s said.
The rating agency lowered its price assumption for North American benchmark Henry Hub natural gas to $3.75 per million British thermal units (MMBtu) through 2015, a 50-cent decrease from its earlier assumption of $4.25/MMBtu set in June. However, its assumptions for 2016 and beyond are unchanged at $4/MMBtu………………………………………..Full Article: Source

Gold-silver price ratio may fall as gold cools faster

Posted on 23 September 2014 by VRS  |  Email |Print

The price of gold might fall more than that of silver this year, taking the price ratio between the two precious metals back towards its five-year average. Gold has been on a downtrend as pickup in global economies has reduced demand for this safe asset. This may offer music to the ears of Indian consumers, as they begin to purchase jewellery for the festival and marriage seasons.
ET data show the gold-silver ratio averaged 55.71 in the five years through end-2013. This means 55.71 kg of silver is needed to purchase a kilogram of gold. But, year-to-date, this ratio has climbed to 65.26, as silver has become more undervalued. The ratio was calculated based on average annual prices of front month gold and silver contracts on Multi Commodity Exchange………………………………………..Full Article: Source

The U.S. Oil And Gas Industry By The Numbers

Posted on 18 September 2014 by VRS  |  Email |Print

Have you ever wondered about the impressive numbers behind the U.S. oil and gas industry? The following infographic has all the answers. Even though oil production reached nearly 9,000,000 barrels per day in 2012, most people in the US are talking about “fracking”, slang for hydraulic fracturing, the controversial method for extracting shale gas.
There were about 45,000 fracking wells in the US in 2012 and the production of shale gas is skyrocketing as a result. Back in 2004, US shale gas production amounted to 0.6 trillion cubic feet and nearly 10 years on, that number has soared to 8.6 trillion…………………………………….Full Article: Source

Commodity price slump is a matter of perspective

Posted on 12 September 2014 by VRS  |  Email |Print

Commodity prices may have come under pressure this year, but they are still 115 per cent above their 1990s average, with iron ore and oil up over 500 per cent, according to a long-term analysis of commodity prices by HSBC.
But taking an even long-term view back to the 19th century, commodity prices are actually about normal, HSBC found. In the future, sugar and meat prices will increase sharply, oil will go up further, and metal prices will remain strong, the bank’s economists predict………………………………………..Full Article: Source

IEA Cuts 2015 Oil Demand Forecasts

Posted on 12 September 2014 by VRS  |  Email |Print

The International Energy Agency Thursday trimmed its forecast for the rise in oil demand this year for the third month in a row, calling the recent slowdown in demand “nothing short of remarkable.” In its closely watched monthly oil market report, the Paris-based energy watchdog said it expects global oil demand to grow by 0.9 million barrels a day in 2014, a decrease of 65,000 barrels a day compared with last month’s forecast and down by 300,000 barrels a day since July.
According to the IEA, oil demand growth in the second quarter was at its lowest in 2½ years, dented by economic weakness in Europe and China, a trend the agency expects will continue to weigh on demand………………………………………..Full Article: Source

IEA Cuts Demand Estimate as Saudi Exports Drop to 2011 Low

Posted on 12 September 2014 by VRS  |  Email |Print

The International Energy Agency cut its global oil demand forecasts for 2015 and said Saudi Arabia exported the least in almost three years as purchases slowed from China and Europe.
Global demand will increase by 1.2 million barrels a day, or 1.3 percent, to 93.8 million barrels a day next year, the Paris-based adviser to 29 nations said in a report today. The expansion is 165,000 barrels a day less than it predicted a month ago. Second-quarter growth in consumption slid to a 2 1/2-year low, spurring Saudi Arabia’s shipments to the lowest since September 2011………………………………………..Full Article: Source

August Sees Further Consolidation in Commodity Markets

Posted on 11 September 2014 by VRS  |  Email |Print

August was a mixed period for commodities as the market saw further consolidation, according to Credit Suisse Asset Management. The Bloomberg Commodity Index Total Return performance was negative for the month, with 13 out of 22 Index constituents trading lower. Credit Suisse Asset Management observed the following: Livestock was the worst performing sector, down 4.18%, led by Lean Hogs. A decrease in demand expectations due to Russia’s ban on US pork, coupled with reduced cases of PED Virus continued to add to downward pricing pressure.
Agriculture decreased 2.25%, led lower by Soybean Oil. Wheat was the only grain to end the month in positive territory amid concerns that supplies from the Black Sea region might be disrupted due to escalating tensions between Russia and Ukraine. Precious Metals declined 1.00%, led lower by Silver. While Gold was supported by geopolitical uncertainty, the strengthening US Dollar and slowing physical demand weighed on Silver. (Press Release)

HSBC Global Research Commodity prices snapshot

Posted on 03 September 2014 by VRS  |  Email |Print

Global commodity prices fell in August, with declines across a broad range of commodity types. Our indicator suggests the IMF commodity price index is likely to have fallen by -4.0% in August, to be -4.2% lower than a year earlier. For the second month in a row, oil prices fell noticeably despite on-going geopolitical tensions.
Meanwhile, the prospect of a good harvest in the northern hemisphere continued to weigh on a broad range of agricultural commodity prices, particularly grains and vegetable oils. Metals prices were more mixed, with aluminium continuing its recent price gains, while copper and nickel prices fell. (Press Release)

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

IEA predicts slowdown in global renewable energy expansion through 2020

Posted on 02 September 2014 by VRS  |  Email |Print

A new report from International Energy Agency (IEA) has revealed that the annual growth in new renewable power will slow and stabilize after 2014 due to policy uncertainty and the absence of grid integration measures. The agency warns that it may fall short of delivering the generation required to meet global climate change objectives.
Wind, solar and hydro and other renewables will account for approximately 26% of global electricity generation by the end of 2020 from about 22% in 2013. The report said the expansion will slow in the next five years unless policy uncertainty is diminished………………………………………..Full Article: Source

Global recovery continues at varying speeds, equity the best bet: Bank J Safra Sarasin

Posted on 01 September 2014 by VRS  |  Email |Print

As the global economic recovery is continuing at varying speeds equities remain the most attractive asset class mid-term, a report by Bank J. Safra Sarasin said. The US leads the global cycle with growth significantly higher than in Euroland.
Euroland is hampered by high debt levels, ongoing economic imbalances, adverse geopolitical headwinds like the crisis in Ukraine and the urgent need for structural reforms, the report said.Inflation remains low globally, preventing a premature increase of policy rates and a bond market crash. The spectre of deflation is particularly strong in Euroland and needs to be addressed by demand and supply side policies………………………………………..Full Article: Source

Global oil and gas transaction activity by sector

Posted on 20 August 2014 by VRS  |  Email |Print

In 2013, the total disclosed oil and gas transaction value was US$ 337 billion. This total was significantly lower (down 21%) than the record high of US$ 423 billion posted in 2012. EY notes that in 2013, there was a reduced willingness to commit to larger transactions. In 2012, 98 oil and gas transactions exceeded US$ 1 billion, compared with just 70 in 2013. In 2012, there were four ‘mega-deals’, with reported values over US$ 10 billion, but in 2013 there were only three.
Transaction activity in the oilfield services (OFC) sector declined in 2013, with 185 deals announced compared with 243 in 2012 and 201 in 2011. According to EY, the average disclosed deal value fell from US$ 244 million to US$ 179 million, marking a continuous decline from the 2011 peak of US$ 416 million………………………………………..Full Article: Source

U.S. Cuts 2014 Oil Price Forecast as Production Surges

Posted on 13 August 2014 by VRS  |  Email |Print

The Energy Information Administration decreased its 2014 price forecast for West Texas Intermediate crudes after the U.S. reached its highest monthly production in 27 years.
WTI will average $100.45 a barrel this year versus the July projection of $100.98, the EIA, the Energy Department’s statistical unit, said today in its monthly Short-Term Energy Outlook. Brent will average $108.11, down from $109.55. Oil output was 8.5 million barrels a day in July, the most since April 1987, the EIA said………………………………..Full Article: Source

IEA raises call on OPEC crude oil for rest of 2014, 2015

Posted on 13 August 2014 by VRS  |  Email |Print

The International Energy Agency said Tuesday it sees a need for more OPEC crude on the global market for the remainder of 2014 and in 2015 than it previously forecast despite global demand growth being curtailed.
In its latest monthly oil report, the IEA raised the “call” on OPEC by a combined 400,000 b/d for the third and fourth quarters to 30.8 million b/d. This compares to previous forecasts of 30.7 and 30.5 million b/d, respectively. For 2015, the call has been raised by 100,000 b/d to 29.9 million b/d………………………………..Full Article: Source

Geopolitical tensions to affect Agri, Energy; Gold to lose resilience: Deutsche Bank

Posted on 12 August 2014 by VRS  |  Email |Print

The current quarter witnessed the worst performance from agriculture and energy and a bright spot in industrial metals. The decline in long time yields shown by precious metals is unlikely to sustain over the medium term, indicating that Gold’s resilience is likely to fade, according to a Deutsche Bank report.
The Russian ban on European and US food is only likely to have a limited impact globally as its direct result will be domestic inflation. The real issue for agriculture will be the excessive rains in France, Germany and Ukraine and their impact on this year’s harvest. The rains have already affected Wheat prices……………………………………Full Article: Source

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