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The Global Economy Is Slow… But Steadier Than Ever

Posted on 22 July 2016 by VRS  |  Email |Print

It’s not difficult to come to the conclusion that, economically speaking, we are living in very turbulent times. China’s great slowdown. Europe’s persistent woes. Brexit. Yet on a bigger scale, all that’s just noise blocking the signal that the global economy is less volatile than any period in the modern era. This is the conclusion of new research led by David Hensley, director of global economics at JPMorgan Chase & Co. in New York.
Hensley’s work measures standard deviations of quarterly, annualized gross domestic product growth for major developed and emerging markets, plus a selection of regions. The sample compares the middle of the business cycle leading up to the Great Recession with the middle of the next cycle, i.e 2013 to 2016………………………………………..Full Article: Source

EIU Global Forecasts Report 2016: Commodities forecasts

Posted on 21 July 2016 by VRS  |  Email |Print

The Economist Intelligence Unit have produced their first global forecast since the Brexit vote. Please find below, their forecasts for commodities until 2020. EIU Report: As in the case of oil, we expect the price of industrial and agricultural commodities to stage only a partial recovery in 2016-20.
After years of oversupply and falling prices, markets are finally moving back towards balance, with our aggregate commodity price index registering its first quarter-on-quarter rise in two years in April-June. Despite this upward trend, however, prices of most commodities remain well below year-earlier levels. Furthermore, rebalancing is taking place at varying speed………………………………………..Full Article: Source

Oil prices set to peak sooner than expected on supply shortage, Barclays says

Posted on 21 July 2016 by VRS  |  Email |Print

Barclays is the latest bank to raise its forecast for medium-term oil prices, saying it now expects them to peak sooner than expected as a supply shortage develops.
The bank said Tuesday it now sees oil prices averaging $85 a barrel by 2019, slightly higher than its prior view and one year ahead of its last assessment in October. Barclays previously saw Brent at $83 a barrel in 2019 and $85 a barrel in 2020. It now expects the oil price to peak in 2019 before declining to $78 in 2021………………………………………..Full Article: Source

IMF cuts UK and global growth forecasts following Brexit vote - as it happened

Posted on 20 July 2016 by VRS  |  Email |Print

And here’s another view on the IMF’s latest pronouncements, from Capital Economics. The research company’s Michael Pearce said: After spending the run-up to the UK’s EU referendum warning that Brexit would cause “severe regional and global damage”, the IMF all but admitted on Tuesday that it had been bluffing, forecasting that the impact would be largely benign after all.
The IMF downgraded its forecasts for global growth this year and next by just 0.1 percentage point, to 3.1% and 3.4% respectively. The biggest downward revision was of course to the UK, which the Fund now expects to grow by just 1.3% in 2017, almost a percentage point slower than its previous forecast………………………………………..Full Article: Source

Oil prices won’t suffer a 2015-style price collapse, says Citi’s Morse

Posted on 20 July 2016 by VRS  |  Email |Print

Oil prices are following a familiar — and potentially troubling — trend that took hold last year, but investors shouldn’t fear a 2015-style, second-half price collapse, Citigroup’s global head of commodities research said Tuesday.
Commodities were the top performing asset class in the first half of 2016, roughly tracing last year’s rally through June. And just like last year, crude oil futures are plateauing at the half point. That pause was followed by a plunge to 12-year lows last winter, but Citi’s Ed Morse said things will be different this year………………………………………..Full Article: Source

IMF Global Growth Downgrade Not Impact Gold Prices

Posted on 20 July 2016 by VRS  |  Email |Print

Gold prices are not seeing much of a boost following the International Monetary Fund’s (IMF) downgrading its global growth forecasts for 2016. In its latest report, the IMF said it expects worldwide growth to expand 3.1% this year and 3.4% in 2017; both estimates were cut 0.1% from the previous outlook.
The biggest influence on the fund’s downgrade was the approval of the Brexit vote last month. IMF chief economist Maurice Obstfeld said in the report that “Brexit has thrown a spanner in the works,” Obstfeld said”……………………………………….Full Article: Source

Bullish Q3 for base metals

Posted on 20 July 2016 by VRS  |  Email |Print

Sucden Financial said Tuesday it expected rising demand from China and global economic uncertainty as key drivers for the continued rally in the base metals complex. “EU uncertainties, UK uncertainties and Japanese yen strength are all contributing to a mixed macro outlook, but sentiment is improving and metals prices are stabilizing having built bases,” Sucden said in a quarterly report.
The base metals complex has suffered large sell-offs in recent years, along with large overcapacity and limited demand. Prolonged periods of low pricing are now beginning to bite into the market, in the form of cuts in mining, production cuts and a heavily destocked market, fueling recent rallies seen across the complex………………………………………..Full Article: Source

ABN, RBC up their gold price calls

Posted on 19 July 2016 by VRS  |  Email |Print

Bears of the precious metal are getting very rare as global uncertainties combine to lift forecasts. Just under a year ago Dutch bank ABN AMRO was even more bearish of gold than Goldman Sachs. Back then Goldman was expecting a price of $1,000 per ounce, but ABN was looking for $800 by the end of this year.
Today the metal is firmly above $1,300 – almost 70% higher than ABN’s old target price. Admittedly, the bank fairly quickly reversed its course just a few months after it made that fateful forecast. But its new target price of $1,200 was all-but immediately hit in the tumultuous early weeks of 2016………………………………………..Full Article: Source

Why a 500% Jump in Gold Prices Isn’t Far-Fetched

Posted on 19 July 2016 by VRS  |  Email |Print

One doesn’t have to be gold bug, think that a financial apocalypse is around the corner or know that predicting anything will increase 500% in value sounds a little crazy to think that history suggests that the precious metal’s price could soar.
The decade that brought us disco music, velour jumpsuits and Pong also saw a 2,300% jump in gold prices. Gold traded at $35 an ounce in 1971, but by the beginning of 1980, it had reached $850 an ounce. Meanwhile, stock markets were volatile but with ultimately flat returns, it was a lost decade………………………………………..Full Article: Source

Some countries losing up to 67% of commodity exports to misinvoicing

Posted on 18 July 2016 by VRS  |  Email |Print

Some commodity dependent developing countries are losing as much as 67% of their exports worth billions of dollars to trade misinvoicing, according to a fresh study by UNCTAD, which for the first time analyses this issue for specific commodities and countries.
Trade misinvoicing is thought to be one of the largest drivers of illicit financial flows from developing countries, so that the countries lose precious foreign exchange earnings, tax, and income that might otherwise be spent on development………………………………………..Full Article: Source

Oil market seesaws as gains capped by glut worries

Posted on 18 July 2016 by VRS  |  Email |Print

The world oil market see-sawed this week as traders tracked growing investor risk appetite, fluctuations in the US dollar and stubborn supply glut worries. “Oil prices are continuing their rollercoaster ride,” Commerzbank analysts wrote in a research note.
Crude futures began on the back foot on Monday, sliding as an increase in US drilling activity and a strong dollar reversed gains from last week’s better-than-forecast US jobs report. A strong greenback makes dollar-priced commodities like oil more expensive for those using other currencies. That tends to weigh on demand and price levels………………………………………..Full Article: Source

Analyst Boosts Price Target for Gold by 75%

Posted on 18 July 2016 by VRS  |  Email |Print

Less than one year ago, Dutch bank ABN AMRO has put itself on the map by being more bearish on gold than Goldman Sachs. Whereas the latter was expecting to see a gold price of $1000/oz, the head analyst responsible for precious metals at ABN AMRO said she was expecting a gold price of $800 per ounce by the end of this year.
Gold is trading firmly above the $1300/oz, and almost 70% higher than ABN’s target price. But of course, just like any other ‘analyst’, the bank quickly reversed its course just a few months later when the market started to turn around………………………………………..Full Article: Source

Silver Institute: Silver Investment Sharply Higher In 2016

Posted on 15 July 2016 by VRS  |  Email |Print

Silver investment has soared in 2016 as investors sought the metal as a safe haven and leveraged exposure to the sharp rally in gold, says the Silver Institute. “Investors actively accumulated silver in the first six months of the year, including both the physical and paper markets,” the organization says.
Exchange-traded-product holdings rose by 44.3 million ounces, or 7.2%, to a record high of 662.2 million.
Investors have also raised their net-long positioning in Comex silver futures and options to a record high of 80,522 contracts as of July 5th, after this was 6,282 contracts at the end of 2015, the Silver Institute says. ……………………………………….Full Article: Source

IEA, WoodMac raise worries about global oil market recovery

Posted on 14 July 2016 by VRS  |  Email |Print

Two influential think tanks on Wednesday raised worries about the pace of recovery in the world oil market. The International Energy Agency, the oil-consuming countries’ main energy watchdog, warned in its monthly oil market report on Wednesday that despite continued signs that the market is more balanced, the huge supply overhang built up over recent years still weighs on oil prices.
“Although market balance is upon us, the existence of very high oil stocks is a threat to the recent stability of oil prices,” the IEA report said. “There are signs that [demand] momentum is easing,” especially in the US and China, while Europe’s surprisingly robust demand “is unlikely to last”, it said………………………………………..Full Article: Source

IEA warns that oil demand is ebbing while supply remains at ‘elevated levels’

Posted on 14 July 2016 by VRS  |  Email |Print

There are warning signs that global oil demand is ebbing while oil stocks remain at “elevated levels,” threatening a rebalancing act in oil markets, the International Energy Agency (IEA) warned on Wednesday.
With oil prices rising since the lows seen at the start of the year, hopes have risen that a “balancing act” between supply and demand in oil markets was finally taking place after two years of declining prices due to a supply glut………………………………………..Full Article: Source

The Difference Between Contango and Backwardation

Posted on 14 July 2016 by VRS  |  Email |Print

For equity investors, these terms may sound made up, but they’re required knowledge for commodity investors. Futures trade on curves, so knowing the direction and slope of a curve is a must in order to invest in commodities and be successful.
They are used to track individual commodities, such as oil or gold, and can be plotted on a chart to show the shape of the curve. A standard futures curve will slope up showing the rising price in the commodity over time, while an inverted curve will show the opposite effect………………………………………..Full Article: Source

Global research houses revise commodity price outlook upward

Posted on 13 July 2016 by VRS  |  Email |Print

Global investment banks have started revising upward their price outlook for base metals, coal & oil, and precious metals. They see demand starting to outweigh supplies that were cut over the past few quarters.
Crude oil and precious metals have already seen a sharp up-move from low levels. Crude oil was quoted around $25-26 per barrel, gold below $1,100 six months ago. Recovery in metals was slower and they are facing resistance at higher levels, except zinc which is up about 20 per cent………………………………………..Full Article: Source

Commodities see gains in second quarter

Posted on 13 July 2016 by VRS  |  Email |Print

For the third consecutive year, the second quarter has seen noteworthy gains in commodities, with the Bloomberg Commodity Index climbing away from the 17-year lows seen in January 2016.
Saxo Group head of commodity strategy Ole Hansen noted that “strong comebacks” from oil and natural gas helped push a rally in commodities, something further supported by continuing demand for precious metals………………………………………..Full Article: Source

Brexit May Have Impact on Global Commodity Market Regulations - OPEC

Posted on 13 July 2016 by VRS  |  Email |Print

According to the Organization of the Petroleum Exporting Countries, United Kingdom’s exit from the European Union may have a number of implications for commodity market regulation, given London’s key role in global markets and its contribution to setting EU rules.
The United Kingdom’s exit from the European Union may have a number of implications for commodity market regulation, given London’s key role in global markets and its contribution to setting EU rules, the Organization of the Petroleum Exporting Countries (OPEC) said………………………………………..Full Article: Source

EIA ups oil price forecasts for this year and next

Posted on 13 July 2016 by VRS  |  Email |Print

The U.S. Energy Information Administration on Tuesday raised its 2016 and 2017 forecasts for West Texas Intermediate and Brent crude prices. In its monthly energy outlook report, the government agency forecast an average price of $43.57 a barrel for WTI this year, up from a previous estimate of $42.83.
Brent crude is seen averaging $43.73 this year, up from the $43.03 June forecast. For 2017, the EIA sees an average of $52.15 for both WTI and Brent. The EIA left its U.S. oil production estimates for 2016 and 2017 at 8.6 million barrels a day and 8.19 million barrels a day, respectively. August WTI crude traded at $46.59 a barrel, up $1.83, or 4.1%………………………………………..Full Article: Source

TDS: $1,500 Gold Possible If Fed Downgrades Rate Forecast

Posted on 13 July 2016 by VRS  |  Email |Print

TD Securities sees $1,400 gold and says $1,500 may even be possible if the Federal Reserve further cools market expectations for interest rates. The metal has benefited from the “disarray” caused by the U.K. after its vote to leave the European Union, as well as global disinflation and low interest rates.
“Given that there are likely to be significant flows into gold and other precious metals seeking protection from the current turmoil, the record amount of net-long exposure should not impede the yellow metal from trending toward $1,400/oz,” TDS says. “If we see the Fed downgrade its rate forecast in the not-too-distant future, a move toward $1,500/oz is also very possible, particularly if the negative yield narrative grows even louder.”……………………………………….Full Article: Source

Citigroup Backs Commodities for ‘17 in ‘Especially Bullish’ Call

Posted on 12 July 2016 by VRS  |  Email |Print

Forget Brexit, go for raw materials. Citigroup Inc. says that it’s bullish on commodities including oil in 2017 as the impact of the U.K.’s vote to quit the European Union fades away, global growth chugs along and with markets rebalancing investors plow more cash into funds.
“Citi is especially bullish commodities for 2017,” analysts led by Ed Morse wrote in an note received on Monday, two months after the New York-based bank said that raw materials’ markets had turned the corner. “The oil market is treading water for now, but the oil price overshot to the downside earlier this year and this is clearly setting the stage for a bullish end to the decade.”……………………………………….Full Article: Source

Commodity rally will continue into second half of the year: Citi

Posted on 12 July 2016 by VRS  |  Email |Print

Commodity prices will buck the trend of the past two years and continue their rally into the second half of 2016, says Citigroup. The new report from Citi says that fund flows should continue to move into commodity-focused assets this year, including physically-backed exchange traded funds and long-only investment funds.
“This is in stark contrast to the last two years, during which time commodities sold off during 2H leading the asset group to be the worst performing as compared with equities and debt securities,” said analysts led by Edward Morse in a note to clients………………………………………..Full Article: Source

UBS upgrades oil price forecast

Posted on 08 July 2016 by VRS  |  Email |Print

Strong demand and supply interruptions have encouraged UBS to increase its oil price forecasts, with the bank now expecting Brent to average more than $50 per barrel in the second half of the year.
The bank increased second-half forecasts for Brent crude and West Texas Intermediate to $51 and $48 a barrel respectively (from $46.50 and $43.50 previously), with a further increase to $60 and $57 a barrel in 2017 (from $55 and $52)………………………………………..Full Article: Source

These 4 Banks Are Bumping Their Gold Forecasts

Posted on 08 July 2016 by VRS  |  Email |Print

UBS has increased its short-term target to $1,400 an ounce. For this year, the Swiss bank has increased its yearly average to $1,280 an ounce, up from $1,225; for the second half of the year, gold analyst Joni Teves said in her note that she expects prices to average $1,340 an ounce.
Commodity analysts at Commerzbank do not see gold’s safe-haven appeal coming to end anytime soon as they increase their year-end forecast by $100 to $1,350 an ounce. The bank also sees more potential for gold as analysts expect the Federal Reserve will not be in a hurry to raise interest rates in these current market conditions………………………………………..Full Article: Source

What Countries Have a Commodity-Based Currency

Posted on 07 July 2016 by VRS  |  Email |Print

Commodities are a bit of an oddity in that they generally have low correlation to stocks, bonds, and currencies. The latter — currencies — has arguably the strongest relationship with commodities. Over the past couple of years, commodities have been the worst-performing asset class, while the U.S. dollar has been hitting all-time highs.
But that’s not the only relationship they share. Countries that rely heavily on commodity-based exports such as oil or precious metals have a currency that is tied to the price of the underlying commodity………………………………………..Full Article: Source

Commodities Second Quarter Overview And Outlook For Q3 2016

Posted on 06 July 2016 by VRS  |  Email |Print

The raw material markets had a great second quarter in 2016. The overall commodity sector consisting of 29 of the primary commodities that trade on the U.S. and U.K. exchanges rallied by 10.75% for the three months that ended on June 30 and is 12.67% higher over the first half of this year. The overall winner for the quarter was natural gas, posting a gain of over 49%.
Two commodities not included in the composite, iron ore and lumber, moved up 12.7% and down 2.19%, respectively. If I add these commodities and the Baltic Dry Index, which gained 59.42% into my calculations, the sector rose by 12.94% in Q2 and 15.25% so far in 2016………………………………………..Full Article: Source

Headwinds ahead for commodities as economic growth stalls

Posted on 05 July 2016 by VRS  |  Email |Print

While commodities such as base metals and oil have rallied in the wake of the June 23 Brexit vote, analysts at banks including Barclays, Citi, Bank of America, JP Morgan and Bank of China International have warned that the referendum result could lead to weaker global growth that will threaten underlying raw materials demand.
The commodities markets have so far proven resilient since the landmark referendum, particularly in China, where “there is not a single major commodities futures market where prices are trading lower than they were prior to the Brexit vote”, as Barclays analysts pointed out on Monday July 4………………………………………..Full Article: Source

Commodities: Q2 gains strongest since 2010, driven by oil, gold

Posted on 01 July 2016 by VRS  |  Email |Print

Commodity prices surged this quarter by the most in over five years, driven by rallies in oil, sugar and gold, as supplies become tighter in many sectors and investors warm to an asset class shunned for years.
The strong gains have occurred despite the uncertainty surrounding last week’s vote by the UK to exit the European Union. “We do not anticipate that Brexit itself will derail the structural supply/demand-led rebound in commodity prices heading into 2017,” analyst Aakash Doshi at Citi said in a note this week………………………………………..Full Article: Source

Commodities are crushing it in 2016: Here’s why

Posted on 01 July 2016 by VRS  |  Email |Print

Halfway through the year, commodities are enjoying a broad advance and are on track to break a five-year streak of annual losses. Analysts said the climb is likely to continue through the end of the year, but some don’t expect the second-half rally to be quite as impressive as the gains seen over the last six months.
Upside moves this year have been led by sugar SBV6, -3.14% and lean hogs with futures prices for crude and gold also rebounding sharply after big declines over the past two years or more. Cattle and coal meanwhile, are among the biggest decliners………………………………………..Full Article: Source

What The ‘Brexit’ Means For Gold And Other Commodities

Posted on 30 June 2016 by VRS  |  Email |Print

The news out of the United Kingdom rocked global markets. In an historic referendum vote, citizens of the U.K. narrowly voted for a “Brexit” — a British exit from the European Union. Since joining the European Union in 1973, a fair number of Britons have been skeptical of the governing body.
British attitudes toward European unity have been… complicated, to say the least. Winston Churchill advocated for “a kind of United States of Europe” during a speech in Zurich in 1946, while simultaneously setting the precedent for an arm’s length relationship with the continent throughout his career. Now that the votes are cast, questions remain about what this will mean for trade, immigration, travel and a host of other issues……………………………………….Full Article: Source

The Oil Price Rebound Will Be Brief - Goldman Sachs

Posted on 30 June 2016 by VRS  |  Email |Print

Goldman Sachs has rejected analysts’ opinions that the global oil market is recovering, noting that while it expects a “modest” deficit in the coming months based on the slight rebound in oil prices, the market will again be in a state of surplus by early next year.
It may seem as if oil is recovering on the back of supply disruptions that have helped to chip away at the global glut and push prices close to $50, but Goldman says that in the best-case scenario this isn’t a rebound—it’s just the first signs of one……………………………………….Full Article: Source

Understanding the Difference Between Hard and Soft Commodities

Posted on 30 June 2016 by VRS  |  Email |Print

There are two main types of commodities: hard and soft. Hard commodities consist of natural resources, such as oil or gold. While soft commodities are agricultural goods or livestock that must be grown and cared for in order to be produced. Both markets trade on supply and demand, and are heavily influenced by macroeconomic events.
Hard commodities are usually the ones that make headlines, or are referred to as a basis for economic health. Because the production and supply of these assets can be predicted fairly accurately, they are used to gauge global-economic health. Copper and oil, in particular, are often looked at to determine where the economy is headed by observing total-worldwide demand for these products……………………………………….Full Article: Source

Japan’s Komatsu Warns Brexit Vote Could Delay Commodity Rebound

Posted on 28 June 2016 by VRS  |  Email |Print

The U.K.’s vote to leave the European Union could delay a recovery in commodity prices, while the yen’s response to the Brexit decision, soaring to within sight of 99 to the dollar, was an overreaction, according to Komatsu Ltd.’s chief financial officer.
The Tokyo-based maker of construction equipment, the world’s largest after Caterpillar Inc. of the U.S., is particularly sensitive to commodity prices and the Japanese currency as more than three-quarters of its sales are made overseas, including the equipment used to dig up and transport metals, coal and other minerals………………………………………..Full Article: Source

Big Banks on Oil: Keep Bullish Despite Brexit

Posted on 28 June 2016 by VRS  |  Email |Print

Goldman Sachs Group, Morgan Stanley, and Citigroup joined Deutsche Bank in saying the worst may be nearly over for oil. Brexit has raised risks but ultimately does little to dent the trends of rising demand and falling supply that have been pushing oil on its strongest rally in years, the banks said.
Even if spillover effects from the vote slowed major economies around the world, it would likely reduce oil demand by just 130,000 barrels, or 0.1% of global demand, Goldman analysts said. Deutsche Bank had estimated an even smaller impact, just 100,000 fewer barrels, compared with outages in Nigeria that are taking 400,000 barrels a day off the market………………………………………..Full Article: Source

Gold’s upside from here is limited, says Goldman’s Currie

Posted on 28 June 2016 by VRS  |  Email |Print

Investors are flocking to gold as a safe haven trade after the U.K.’s vote to leave the European Union, but the upside from here is rather limited, the global head of commodities research at Goldman Sachs said. “One of the key reasons for that is the market is incredibly long. We’ve also seen a sharp decline in interest rates, particularly U.S. Treasurys, which suggests that we probably are topping out here,” Jeffrey Currie said.
Goldman Sachs upped its gold price forecast to $1,300 on Friday after Thursday’s Brexit vote sent the price soaring. The precious metal was trading around $1,330 in afternoon trading Monday………………………………………..Full Article: Source

10 reasons why gold price will go up in the future

Posted on 28 June 2016 by VRS  |  Email |Print

The price of gold in India has seen a highest single day jump in the last five years, with the previous one being in August 2011. Globally, too, following the UK votes favouring exit from EU, which is an unprecedented event, has seen nearly $100 per ounce jump in gold prices, which was not a usual phenomenon.
After closing at $1313 on Friday, today it is trading 1% higher in early trade around $1325 per ounce. There are several factors that suggest gold will be a preferred asset for all kind of investors — retail, institutional or even central banks………………………………………..Full Article: Source

Water: The World’s Ultimate Commodity

Posted on 28 June 2016 by VRS  |  Email |Print

Water is one resource that is absolutely necessary for life. Humans can’t survive more than a few days without it, and without water, crops wither and die. You would think we’d consider it a precious commodity. But in the United States, especially on the East Coast, we don’t tend to think of water as the valuable commodity it really is.
Usually the worst drought we have on the East Coast is one that causes us to water our roses less, and make our lawns brown instead of green. At this point, the drought that is hitting its fifth year in California has become old news. We know that the state is suffering from a bad drought… but did you know that it’s the worst drought in 1,200 years?……………………………………….Full Article: Source

Gold wins from Brexit. But other commodities lose

Posted on 27 June 2016 by VRS  |  Email |Print

Gold prices soar, but many commodities will suffer from the ripple effects of the referendum. Goldbugs are natural Brexiteers; intensely suspicious of large bureaucracies like the European Union and avid conspiracy theorists when it comes to the power of global “elites”. They had double reason to celebrate on June 24th, when Britain’s decision to leave the EU sent gold prices soaring.
But the rise of the yellow metal is also a symptom of the fear that Brexit is unleashing on the global economy. Hence other commodities that are more dependent upon global demand, such as oil, fell sharply. After a huge rally since their trough earlier this year, the commodities markets were vulnerable to a shock. Hedge funds and other money managers had built up big bets on rising prices………………………………………..Full Article: Source

Brexit threatens London’s status as a markets hub

Posted on 27 June 2016 by VRS  |  Email |Print

London is the world centre of the complex plumbing of markets, but leaving the EU complicates that. The UK’s decision to leave the EU has already prompted dire warnings over the implications for the City of London’s position as one of the world’s biggest financial trading hubs.
François Villeroy de Galhau, Bank of France governor and ECB governing council member, said: “If tomorrow Britain is not part of the single market, the City cannot keep this European passport, and clearing houses cannot be located in London either,” he told French radio………………………………………..Full Article: Source

‘Brexit’ Unlikely to Have Big Impact on U.K. Oil and Gas Market, Consultant Says

Posted on 27 June 2016 by VRS  |  Email |Print

The U.K. is too large a market for European oil and gas sellers to be marginalized too much by its exit from the European Union, said Simon Flowers, chairman and energy chief analyst at global oil consultancy Wood Mackenzie.
In an interview with The Wall Street Journal, Mr. Flowers said the U.K. could be subject to some tariffs on oil and gas from the EU as part of any new trade deal. However, global markets for both resources are oversupplied and there is enough competition for the U.K. to ensure it still gets a good deal, he added………………………………………..Full Article: Source

The End of Economic Forecasting

Posted on 24 June 2016 by VRS  |  Email |Print

The dominance of finance has made economic volatility the new normal. Why have economic forecasters recently been so wrong? Just two years ago, for example, the common perception was that the big emerging markets would drive global growth. That oil prices would remain above $100 per barrel.
That interest rates would move higher. All of these predictions have been wildly wrong. Yet these variances are neither a coincidence nor a temporary phenomenon. We have entered an age in which economic and financial forecasting is much harder and less reliable………………………………………..Full Article: Source

Here’s how ‘Brexit’ will impact commodities

Posted on 23 June 2016 by VRS  |  Email |Print

Britons will vote on Thursday (Today) on whether to remain in the European Union. Market volatility is expected to be particularly severe if the result is an unprecedented ‘Brexit’. Two opinion polls released on Monday suggested support for Britain staying in the 28-nation bloc had recovered some ground following the murder of a pro-EU lawmaker last week, although a third survey found backers for Brexit ahead by a whisker.
Betfair betting odds have also shown Britain’s ‘remain’ option gaining traction, with the implied probability of such an outcome at 78 per centon Monday, up from 60-67 per centon Friday. Here is a look at what analysts at several banks feel a Brexit vote could do to the broad commodities sphere………………………………………..Full Article: Source

Wells Fargo Thinks Commodities are Still a Good Catch

Posted on 23 June 2016 by VRS  |  Email |Print

The big run by commodities is lifting prices for major benchmarks to new highs in 2016. But advisors who are wary at this point of putting new clients’ money into funds – either broad-based or more focused on futures like gold and oil – might find reason for relief by taking a longer-term view of such historically volatile markets.
“Advisors who are working with clients on a more strategic basis should be able to allocate to commodities with more confidence now,” says John LaForge, head of real asset strategy at Wells Fargo’s Investment Institute………………………………………..Full Article: Source

Era of Cheap Oil Coming to an End - IEA

Posted on 22 June 2016 by VRS  |  Email |Print

The era of cheap oil may soon come to an end, if the prediction of the International Energy Agency, IEA, is anything to go by. The IEA said that there will be rise in oil price due mainly to unplanned outages and disruptions in places like Canada, Nigeria, and Libya.
According to the Agency, it is expected that the oil market will be balanced for the rest of the year, meaning the world will pump roughly as much oil as it consumes. That should nudge prices higher. Oil is currently trading around $50 a barrel, double the nadir reached earlier this year………………………………………..Full Article: Source

Soft Commodities: The Quiet Bull Market

Posted on 21 June 2016 by VRS  |  Email |Print

Sugar is sweet. Coffee is percolating. Orange juice explodes. Cocoa is a long-term bull. Cotton is cheap. Gold and oil get lots of headlines. Recently, we have heard a lot about rallies in soybeans and corn and other commodities. However, rarely do the soft, or luxury goods, get much press, but they have been active over recent months.
In fact, way back in August of 2015, one sweet staple was the first commodity to move higher from multi-year lows. Few took note of the rally, but that agricultural product has almost doubled since then, and it is a staple that most of us consume each day………………………………………..Full Article: Source

Moody’s ups oil price forecast to $40 for 2016

Posted on 20 June 2016 by VRS  |  Email |Print

Moody’s Investors Service today revised upwards its price forecast for oil this year on the back of recent uptick in rates. “Moody’s assumes a medium-term oil price band of $40 to $60 per barrel for both WTI and Brent crude and upwardly revised its shorter-term oil price estimates for these crudes to $40 in 2016, $45 in 2017 and $50 per barrel in 2018,” the rating agency said today.
In March, Moody’s estimated oil prices to be around $33 per barrel in 2016, which will rise to $38 next year and to $43 in 2018. In a release titled ‘Moody’s: Challenging conditions for oil-related entities remain unchanged despite near-term price rebound’, the rating agency said its medium-term outlook for the sector remains unchanged………………………………………..Full Article: Source

Opec revenue seen down for 3rd straight year

Posted on 17 June 2016 by VRS  |  Email |Print

The Organization of the Petroleum Exporting Countries (Opec’s) full-year 2016 oil export revenues will probably fall 15 per cent, down for the third straight year and possibly the lowest in more than a decade before rising in 2017, the US Energy Information Administration (EIA) said.
Members of Opec, including Iran, will likely earn about $341 billion in 2016, about 15 per cent below 2015 levels, based on projections of global oil prices and the group’s production levels, the US government’s EIA said in a report. The last time Opec’s export revenues fell for three years straight was 1983-86………………………………………..Full Article: Source

Global Oil Markets Approach Balance, IEA Says

Posted on 15 June 2016 by VRS  |  Email |Print

Global oil markets are moving close to balance in the second half of this year on stronger-than-expected demand and on supply disruptions, the International Energy Agency said. Summer Said reports the oversupply in the first half of this year is likely to stand around 800,000 barrels a day, down from the 1.5 million barrels initially anticipated.
Global oil demand in the first quarter of this year was revised up to 1.6 million barrels a day. Unplanned shut-ins in Canada and Nigeria as well as the expected drop of 900,000 barrels a day in production from producers outside the Organization of the Petroleum Exporting Countries, or OPEC, will help the markets to rebalance, the oil watchdog said………………………………………..Full Article: Source

Non-Opec oil supply to grow again next year – IEA

Posted on 15 June 2016 by VRS  |  Email |Print

Strong demand growth and production disruptions are easing the oil glut quicker than anticipated, but supply rises outside of the Opec group will return next year, according to the world’s leading energy body.
“Less oil has been stock-piled than we originally expected,” said the International Energy Agency in its closely watched monthly oil market report. The agency initially estimated the surplus of supply over demand in the first half of 2016 would be 1.5m barrels a day, but this has fallen to 800,000 b/d. It expects the oil market to reach a balance by the end of the year………………………………………..Full Article: Source

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