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Commodities Extend Decline to Lowest Since July 2009

Posted on 16 September 2014 by VRS  |  Email |Print

Commodities rose after touching the lowest level in more than five years on signs demand growth is weakening in China, the biggest consumer of energy and metals, and on speculation U.S. borrowing costs may rise next year.
The Bloomberg Commodity Index of 22 futures dropped as much as 0.4 percent to 120.7641, the lowest level since July 2009, before trading at 121.3571 at 3:41 p.m. in New York. The gauge has lost 3.5 percent in 2014 and is set for a fourth year of decline. Brent crude fell to the lowest in more than two years as corn and soybeans traded near 2010 lows………………………………………..Full Article: Source

Commodities Fall to 5-Year Low With Plenty of Supplies

Posted on 12 September 2014 by VRS  |  Email |Print

Commodities fell to a five-year low on speculation abundant supplies and slowing economic growth outside of the U.S. will curb demand for raw materials. The Bloomberg Commodity Index declined to the lowest since July 2009. Brent oil traded at the cheapest since 2012, wheat, corn and soybeans retreated to four-year lows, and gold slumped to a seven-month low.
Weak economic growth in Europe and Japan is leading to lower energy prices and interest rates in the U.S. at a time when the U.S. corn crop is a record high and U.S. oil production is poised to be the most in 45 years………………………………………..Full Article: Source

Commodity prices slip on waning global appetite

Posted on 12 September 2014 by VRS  |  Email |Print

Commodity prices are falling, the second time around in 2014. In the current quarter, till date, the Thomson Reuters CRB Commodity Index, a broad indicator, has declined by 7.7%. A similar indicator, the S&P GSCI Index, has fallen by 10.4%. What has contributed to this fall? Food prices are a reason. On Thursday, the UN’s Food and Agriculture Organization said its food price index fell to 196.6 points in August, a level last seen in September 2010.
The index fell by 3.6% over July. Surplus conditions in commodities such as cereals (except rice), dairy products, sugar and oils have contributed to this decline. Crude prices have seen a sharp decline in recent months, with Brent crude prices down by 12.7% in a three-month period. The Dow Jones Commodity Index–Energy has declined by 12.3% in this period. Coal prices also continue to decline, though the degree is lower as they have been falling for a much longer period………………………………………..Full Article: Source

Global Food prices continue to delcine on good weather, harvests

Posted on 12 September 2014 by VRS  |  Email |Print

FAO’s monthly food price index registered another drop in August, continuing a 5-month downward run and reaching its lowest level since September 2010. The index’s August average of 196.6 points represents a decrease of 7.3 points (3.6 percent) from July. With the exception of meat, prices for all of the commodities measured by the index dipped markedly.
Dairy led the pack, with FAO’s sub-index for dairy products averaging 200.8 points in August, down 25.3 points (11.2 percent) versus July and 46.8 points (18.9 percent) compared to a year ago — the result of abundant supplies for export coupled with reduced import demand………………………………………..Full Article: Source

Commodities send worrying signal

Posted on 11 September 2014 by VRS  |  Email |Print

Bulls of growth-focused assets may care to consider some signals from the commodity sector. Early on Wednesday, Brent crude dropped below $99 a barrel for the first time since May 2013; Tokyo-traded rubber prices hit a five-year trough; China-based steel rebar futures for January delivery hit a contract low; and, before recovering into the close, the Dalian Commodity Exchange’s January iron ore price also fell to a record low.
These are products with a high sensitivity to perceived industrial and construction activity in China, source of a high proportion of expected global growth………………………………………..Full Article: Source

Commodities suffer as dollar accelerates

Posted on 08 September 2014 by VRS  |  Email |Print

Weakness across the commodity space resumed this week with the broad-based Bloomberg Commodity index falling by more than 1 percent. Multiple factors drove the weakness, not least the continued surge in the dollar, which gathered additional momentum following the intervention on rates and bonds from the European Central Bank on Thursday.
The announcement by Mario Draghi that the ECB had cut rates to a record low, while pledging to buy hundreds of billions of bonds to support the Eurozone, triggered a major move in the dollar, with the euro falling to a near 14-month low against the greenback. Given the dollar’s adverse relation to dollar-denominated commodities, the impact was felt across all sectors……………………………………….Full Article: Source

OPEC Exports Drop on U.S. Shale

Posted on 08 September 2014 by VRS  |  Email |Print

“I know Putin is a hot topic right now, but oil exports from Russia have no effect on us. What about the big players like Saudi Arabia?” writes Sheldon, a concerned Energy and Capital reader. He emailed his query after reading this week’s columns from both me and Jeff Siegel on Russia, the civil war in Ukraine, and their bearing on the Chinese and European energy sectors.
And while Putin is attempting to harness control over two continents, Sheldon’s email got me thinking more broadly about U.S. oil and our evolving relationship with the Organization of Petroleum Exporting Countries (OPEC)………………………………………..Full Article: Source

Outlook turns bleak for gold

Posted on 08 September 2014 by VRS  |  Email |Print

The easing of tension in Ukraine, the stimulus announced by the European Central Bank (ECB) and the subsequent strength in dollar have worked to the disadvantage of gold. The yellow metal cut its key support at $1,260/ounce and fell to a low of $1,257 last week.
But as the US jobs data released on Friday was not as strong as expected, the metal recovered slightly and closed at $1,268.8/ounce, down 1.4 per cent for the week. The US non-farm payroll report showed that 1,42,000 jobs were added, lower than the street’s expectations of 2,25,000 jobs………………………………………..Full Article: Source

Can Gold And Silver Ever Make A Full Recovery?

Posted on 08 September 2014 by VRS  |  Email |Print

The bear market in gold, silver and mining shares continues as we start the month of September. We have recent calls from investment banks for ever lower prices, perhaps more a symbol of how out of favor this sector is, than any accurate comment on future values. We also have news this week pointing towards more monetary easing in Europe at the same that (supposedly) central bankers in the US are going to be able to begin tightening.
Other apparently bullish news for the US economy and its currency comes from those calling for an age of American energy independence. While the greenback has hardly exhibited the kind of bullish moves higher one would expect during a secular bull market in stocks (the dollar is basically stuck in the same range as that of the last 6 years), hope springs eternal for those bulls who want to make the case that a new era of a strong dollar is going to be the final nail in the coffin for the precious metals………………………………………..Full Article: Source

Obama’s Oil Boom – Global Warming Be Damned

Posted on 05 September 2014 by VRS  |  Email |Print

Considering all the talk about global warming, peak oil, carbon divestment, and renewable energy, you’d think that oil consumption in the United States would be on a downward path. By now, we should certainly be witnessing real progress toward a post-petroleum economy. As it happens, the opposite is occurring. U.S. oil consumption is on an upward trajectory, climbing by 400,000 barrels per day in 2013 alone — and, if current trends persist, it should rise again both this year and next.
In other words, oil is back. Big time. Signs of its resurgence abound. Despite what you may think, Americans, on average, are driving more miles every day, not fewer, filling ever more fuel tanks with ever more gasoline, and evidently feeling ever less bad about it………………………………………..Full Article: Source

Century-old London gold price benchmark starts makeover

Posted on 05 September 2014 by VRS  |  Email |Print

The operator of the London gold price benchmark said on Thursday it formally started the process to find a new administrator for the century-old mechanism that will halt the telephone call that four institutions enter twice a day in favour of an electronic solution.
The London Gold Market Fixing Ltd (LGMFL), along with the London Bullion Market Association (LBMA), said in a statement that the choice will be announced in October, and implementation will be complete by the end of 2014………………………………………..Full Article: Source

As US dollar soars, commodities get crushed

Posted on 04 September 2014 by VRS  |  Email |Print

The hottest trade of the past two months has been a surprising one: Going long the U.S. dollar against other currencies. And the recent dollar strength appears to have had a profoundly negative impact on commodity prices.
Since the end of June, the U.S. Dollar Index (which compares the dollar to a basket of other currencies) has risen 3.5 percent, bringing the index to a 52-week high. And while the weakness in the widely watched euro has certainly contributed to the move, the dollar has also shown considerable strength against currencies like the British pound, the Canadian dollar and the Japanese yen………………………………………..Full Article: Source

Risks associated with investing in commodities right now ‘have diminished’

Posted on 04 September 2014 by VRS  |  Email |Print

The risks associated with investing in commodities have ‘diminished’ in recent months, according to Evy Hambro, manager of the £900 million BlackRock World Mining investment trust. Hambro commented, ‘The mining sector has significantly lagged the general equity market in recent years. However, a number of the downside risks for this sector have reduced, albeit not disappeared.
‘The industry has made good progress in refocusing its strategy: operating costs have been aggressively targeted and investment in projects reassessed. Many commodities are trading close to or below their marginal cost of production, implying that price downside should be limited, in the absence of a collapse in demand.’……………………………………….Full Article: Source

Africa likely to experience oil and gas boom

Posted on 04 September 2014 by VRS  |  Email |Print

Africa’s energy industry could see a major boost in the coming years, a fresh study by PriceWaterhouseCoopers has suggested. Mozambique and Tanzania were highlighted as the countries with the most potential.
A study released by PriceWaterhouseCoopers (PwC) on Wednesday concluded that Africa had the potential to experience a major mid-term energy boom. The survey forecast demand for oil on the continent would “rise significantly” over the next two decades, driven by larger populations, urbanization and the emergence of a wealthier middle class………………………………………..Full Article: Source

How OPEC missed the North American shale revolution

Posted on 03 September 2014 by VRS  |  Email |Print

As an oil cartel, the Organization of Petroleum Exporting Countries is a fixture of the world’s energy system – not particularly liked, but begrudgingly accepted. The national oil companies within the sphere of OPEC, with their opaque accounting practices and byzantine corporate structures, monopolize vast reserves of easy oil and repatriate to their home treasuries gargantuan stores of western currency.
In an increasingly global, transparent and unconventional energy age, OPEC goes against the grain. The untold mineral riches of its member nations, most of which are Middle Eastern, has given them a sense of confidence – some might say arrogance – that lets them, by and large, ignore energy developments elsewhere in the world and continue on with business as usual………………………………………..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

How the US found an extraordinary solution to oil supply risk

Posted on 01 September 2014 by VRS  |  Email |Print

A new report from the US Energy Information Administration highlights the extraordinary rise in US liquid fuel production over the past few years and how it has helped off-set unplanned supply disruptions which are running at the highest level since the Iraq-Kuwait war some 24 years ago.
The report has done a very good job in clearly describing what we already knew, namely that oil markets since 2011 have become less price sensitive to actual and potential supply disruptions. Especially to those numerous geopolitical events that has taken place since the Arab spring and the overthrow of Libya’s Muammar Gaddaffi in 2011………………………………………..Full Article: Source

Falling Oil Prices Could Force Venezuela to Veer off the Chávez Formula

Posted on 29 August 2014 by VRS  |  Email |Print

Venezuela’s embattled Nicolás Maduro has spent most of his 19-month presidency fighting to avoid changing any of the economic policies he inherited from his predecessor, the late Hugo Chávez. Maduro has repeatedly told his countrymen that Chávez’s socialist blueprint is working in spite of mounting shortages, soaring inflation, and two maxi-devaluations in the past two years. Now falling oil prices may force his hand.
The price of Venezuela’s benchmark basket of crude and petroleum products fell on Aug. 22 to $90.89, a two-year low. Since the end of last month, the price has fallen 10 percent, tracking a surprising drop in international prices in spite of Mideast tensions………………………………………..Full Article: Source

Global green energy growth threatened by policy uncertainty, IEA warns

Posted on 29 August 2014 by VRS  |  Email |Print

Global green energy expansion may stall unless governments can put in place more stable and long-term policies, the International Energy Agency (IEA) warned.
Its third annual Medium-Term Renewable Energy Market Report outlines how renewable sources of energy such as wind, solar and hydropower have made strong progress worldwide to make up around 22 per cent of global power generation, roughly on a par with electricity from gas………………………………………..Full Article: Source

Silver Pricing Change Takes Effect; Other Metals to Follow

Posted on 29 August 2014 by VRS  |  Email |Print

With the launch in mid-August of a new system to arrive at the price for silver, precious metals investors are dealing with the first in a series of changes in how the market prices of silver, gold, platinum and palladium are reached.
More change is coming, since the other three metals have yet to go through the process, but what’s happened so far is this: Concerns about price fixing after everything from LIBOR to currency were found to have been manipulated led to accusations about the gold and silver markets, and in January of this year Germany’s financial regulator Bafin said that the manipulation of precious metals prices was worse than that occurring with LIBOR………………………………………..Full Article: Source

Commodities Volatility Shakes Up Hedge Funds

Posted on 22 August 2014 by VRS  |  Email |Print

Jumpy commodities markets are taking hedge funds for a wild ride. A spate of unpredictable U.S. weather, a surprise record harvest and even a pig virus are giving commodities traders exactly what they craved: volatility. But a few big names are on the wrong side of this summer’s topsy-turvy moves.
Unlike in years past, when star managers scored megapaydays in high-profile markets such as oil and gold, some of the biggest winners in recent months are in commodities like corn, soybeans, natural gas and electricity………………………………………..Full Article: Source

Three reasons why gold is set to rally for the rest of 2014

Posted on 22 August 2014 by VRS  |  Email |Print

Scott Winship, portfolio manager of the Investec Global Gold fund, explains why gold is set to build on a strong first half of the year. In recent months there has been renewed investor interest in gold, with the first half of 2014 seeing the gold price rise by 10 per cent.
Investors have also tempered their gold ETF selling year on year. Last year saw global gold ETF holdings decline by 33 per cent as investors priced in tapering of QE and higher interest rates, but this year has seen a change in sentiment as year-to-date ETF holdings have only declined by 1.8 per cent………………………………………..Full Article: Source

Commodities: You don’t need to know them to trade them

Posted on 21 August 2014 by VRS  |  Email |Print

While there are more opportunities to trade commodities these days, investors remain reluctant to jump on board, citing a lack of understanding about what they are as a key reason. Commodities include products such as gold, silver, oil, wheat, sugar, cattle and pork bellies. OANDA senior technical analyst Stuart McPhee says he finds retail investors aren’t generally interested in trading commodities.
“Anecdotally, when you talk about trading something like sugar or wheat, people say they don’t understand it and wouldn’t know how to trade it. Our trading activity reflects this.” This is despite there being more ways to trade them, he says………………………………………..Full Article: Source

Peak Gold? Russia To Surpass Australia As World No 2 Gold Producer

Posted on 21 August 2014 by VRS  |  Email |Print

Another important player in the gold market at the moment is Russia. Their intentions are more realistic and not as ambitious of those of China. However, Russia sees gold as a valuable monetary asset that will protect the ruble in the continuing currency wars.
This is why, Russia has been one of the largest buyers of gold in recent months (see chart) - largest sovereign buyer and one of the largest buyers in general. Although we do not know how much gold the People’s Bank of China is quietly accumulating. Russia now looks set to become the world’s second largest producer of gold, after China and surpassing current world number two gold producer Australia………………………………………..Full Article: Source

Should Investors Fear Global Tensions?

Posted on 20 August 2014 by VRS  |  Email |Print

Over the past few months, geopolitical crises seem to have proliferated. First, in March, long-simmering tension between Russia and the Ukraine metastasized to a full-blown crisis after the government of Ukraine was toppled by a popular revolt.
That then led to the Russian annexation of Crimea, which was followed by sanctions imposed by the Western states, armed conflict between Russian separatists and the Ukrainian government in eastern Ukraine, and even more sanctions. Then, in June, we witnessed the sudden eruption of another brief, intense war between Israel and Hamas-controlled Gaza, which saw daily scenes of bombs and missiles and reports of death and mayhem………………………………………..Full Article: Source

Fracking – another commodity bubble of our times

Posted on 18 August 2014 by VRS  |  Email |Print

Here’s a Dutch phrase for you, Gouden Eeuw. No, nothing to do with the currently controversial topic of cheese, it rather means Golden Age. Nowadays, the Netherlands is best known for “whacky-baccy” and a liberal take on life – it is a significant trading economy but hardly a global leader. However, in the 17th century it was the USA of its day, the foremost economic and maritime power in the world in a time when size did not matter.
Holland did this by being the first European power to gain a foothold in Asia, including a monopoly on trade with Japan through the Dutch East India Company and dominating inter-European trade, fuelled by cheap energy from Windmills. Then everybody went nuts, completely insane actually or “krankzinnig” as they would say themselves………………………………………..Full Article: Source

Gold falls globally on declining investor demand

Posted on 18 August 2014 by VRS  |  Email |Print

Gold fell the most this month on signs of waning investor demand from the US to China. The metal pared losses amid rising tensions in Ukraine. Violent conflicts in the Middle East and Eastern Europe helped boost prices 8.6 per cent this year.
Investors haven’t been enticed by the gains, sending open interest in New York futures and options to the lowest since 2009 and money managers have trimmed their bullish wagers. Demand for the precious metal fell 16 per cent in the second quarter, led by declines in India and China, the World Gold Council said this week………………………………………..Full Article: Source

World Awash in Oil Shields Markets From 2008 Price Shock

Posted on 14 August 2014 by VRS  |  Email |Print

Fighting across Iraq, Libya, Ukraine and Gaza, and an accelerating economy, should mean higher oil prices. Yet crude is falling. Six years ago, oil soared to a record $147 a barrel as tension mounted over Iran’s nuclear program and the world economy had just seen the strongest period of sustained growth since the 1970s.
Now, West Texas Intermediate, the U.S. benchmark price, has traded below $100 for 10 days and Brent, the European equivalent, tumbled to a 13-month low………………………………………..Full Article: Source

Miners Have Already Rallied: Will Metals Follow?

Posted on 14 August 2014 by VRS  |  Email |Print

When one looks at gold and silver prices and their moves yesterday, it might seem that nothing happened in the precious metals market. That’s far from the truth because the real action took place in mining stocks. Several weeks ago, it was miners’ strength that heralded the rally in the whole sector. Will we see one also this time?
Miners moved higher and the volume that accompanied this move was rather average. It was not high enough to confirm the direction of the move by itself, but it was not low enough for us to say that the move was fake………………………………………..Full Article: Source

Calling all nervous investors! The case for commodities

Posted on 13 August 2014 by VRS  |  Email |Print

As geopolitical risk and fears of stock market falls continue to loom large, some investors believe now may be the time to back commodities – despite the woeful returns from the asset class over recent years. Commodities have performed poorly since 2010, with the Bloomberg/UBS Commodity index falling 30% over that period. And while the index rose 7.1% in the first half of 2014, its best start to a year since 2008, a difficult July saw many of those gains evaporate.
But as fears of a market correction gain ground, with some seeing the FTSE 100’s weakness over the last fortnight as a prelude to a further falls, some are taking a shine to commodities, which traditionally have shown a low correlation to broader markets. Their resilience in times of geopolitical stress is adding to their appeal, as tensions persist between Russia and the West and the US conducts air strikes in Iraq………………………………..Full Article: Source

Metals advance: Is China healthy?

Posted on 13 August 2014 by VRS  |  Email |Print

Zinc and nickel paced gains by industrial metals in London amid signs demand is improving in China, the biggest consumer. Aluminum rose to the highest since February 2013. Industrial production in China maintained its pace of growth last month, economists surveyed by Bloomberg said before data due tomorrow.
Zinc trading volumes in Shanghai were more than triple the average today, data compiled by Bloomberg show. Money managers’ long position in zinc came to 28% of the open interest as of Aug. 8, the most among six main metals traded on the London Metal Exchange, data from the bourse showed. Still, that’s down from 30% a week ago………………………………..Full Article: Source

Commodities: Has Their Time Come Again?

Posted on 12 August 2014 by VRS  |  Email |Print

Ever since the Great Recession, it’s been a mixed bag for investors in natural resources. Though driven by the expanding emerging world, prices for commodities — with the exception of energy — haven’t really approached their pre-recession highs. From lower growth in key markets like China to oversupplies of several metals and minerals, commodities as a whole have been a terrible place to park your money over the last three or four years.
That could make them an ideal bargain play. Aside from their diversification benefits, the overall stronger global economy has some of the supply-demand dynamics finally working in investors favor. And after the recent slide in risk assets, the time to buy could be now……………………………………Full Article: Source

Escalating geopolitical discord lifts commodities

Posted on 12 August 2014 by VRS  |  Email |Print

After hitting a sixth month low at the end of July, the broad based Bloomberg Commodity Index (formerly known as DJ-UBS) managed a small comeback this week. Multiple geopolitical worries halted the slide in crude oil and gave precious metals a lift while industrial metals took stock following disappointing economic data from China and Europe.
The agriculture sector was higher as the grain sector returned from the abyss, thereby helping to offset losses in soft commodities, not least coffee and sugar, while livestock fell for a third week……………………………………Full Article: Source

Australia: Economy surviving commodity peak

Posted on 08 August 2014 by VRS  |  Email |Print

The Australian economy typically underperforms in the aftermath of commodity price peaks, but that’s not the reason for the latest rise in unemployment. The tough times typically arrive after the price peaks, when prices are still relatively high.
There have been four major rises in Australia’s export prices in the past 50 years (using the price measure for goods exports from the national accounts, converted into foreign currency values using the RBA’s trade-weighted index of the Australian dollar)………………………………………..Full Article: Source

Africa: Commodities: The Trade Challenge

Posted on 06 August 2014 by VRS  |  Email |Print

With new rules and new markets, African companies are fighting for a bigger stake in the continent’s resource bonanza. At the same time, multinational traders like Glencore are targeting Africa as they seek to control commodity value chains.
For a couple of days in mid-June, as the rest of the world settled down to watch the World Cup, Chad made a rare foray into the global news headlines. Idris Déby Itno, its dapper deal-making president who had paid a call a month earlier at the Elysée Palace to see France’s President François Hollande, announced that Chad’s capital, N’Djamena, was going to be headquarters for the regional campaign against jihadists in Nigeria, Mali and beyond………………………………………..Full Article: Source

Silver to Gain Ground in August on These Factors

Posted on 05 August 2014 by VRS  |  Email |Print

Silver prices may have had an unremarkable July, trading down 3%, but if recent history is any indication, August could help steer prices in the right direction and draw in the bulls. One reason for a rosy silver price forecast for August is that the white metal has finished up every year in this month for the last five years, averaging a return of 10.4%.
In the last 10 years, silver has finished up seven times and averaged a 3.6% month-long return. The last two years have been even better - silver tallied double-digit gains in August, with an astounding 19.3% surge in 2013………………………………………..Full Article: Source

Geopolitical risk fatigue grips commodities market

Posted on 04 August 2014 by VRS  |  Email |Print

Iraqi insurgencies, repeated clashes between Western powers and Russia first over Crimea, then Ukraine, while another bloody conflict raged in Gaza. The cocktail of high explosives for commodities is there, but 2014 has never the less been rather uneventful from a market perspective (so far at least).
Like the Forex market, commodities are struggling to make meaningful moves. Now, as August begins, we’re looking at severely low commodity volatility the like of which has not been seen this side of the millennium. Using the S&P GSCI index to gauge the commodity spectrum, we find that annual volatility is currently running below 10 per cent at 9.3 per cent, less than half the annual average since 2000 at around 22 per cent – even 2013 was more volatile………………………………………..Full Article: Source

China oil demand rises 2.7% vs year ago

Posted on 30 July 2014 by VRS  |  Email |Print

China’s apparent oil demand* in June turned directions from May and climbed 2.7% versus the same month a year ago to 41.94 million metric tons (mt) or an average 10.25 million barrels per day (b/d), according to a just-released Platts analysis of Chinese government data. On a month-over-month basis, apparent oil demand was up 8.6% from May.
“Analysts attributed the June increase to stronger fuel demand by the farming and agricultural sectors for the summer planting season,” said Song Yen Ling, Platts senior writer for China. “It’s also interesting to note that June marked the second month that China’s apparent oil demand crossed the 10 million b/d this year, following February’s 10.62 million b/d.”……………………………………….Full Article: Source

Commodities Trading At Banks: Going, Going, Gone?

Posted on 29 July 2014 by VRS  |  Email |Print

While on a visit to the commodities unit of a major investment bank in New York roughly seven years ago, one was enveloped by a sense of exuberance on the trading floor. No less than three executives claimed their institution was among the “few banks” with separate units dealing in paper crude oil barrels, as well as loading and dispatching the physical stuff on to tankers somewhere off a foreign shipping terminal.
Given that the global financial crisis hadn’t taken hold and the year was 2007, such a claim could well be classified as the market overstatement of the decade then. In actual fact, most major banks were trading derivatives, futures, options and physical commodities at the time. Fast forward to the second half of 2014, and it is a different scenario altogether………………………………………..Full Article: Source

Is gold approaching a tipping point?

Posted on 28 July 2014 by VRS  |  Email |Print

It is a property of physics that action is met by reaction, as a matter of real science. In the world of financial markets, however, that principle may only doubtfully apply, just as in economics cause and effect are very often difficult to disentangle.
That said, there is a fairly clear counterpart to the supposed likelihood of the US dollar rising with the expected onset of rising interest rates, as related last week. That is the impact on gold, responding both to the same underlying force and to the currency’s behaviour itself………………………………………..Full Article: Source

Smart phones, tablets, electric vehicles help Lithium demand soar

Posted on 28 July 2014 by VRS  |  Email |Print

Demand is soaring for lithium, which is used in rechargeable batteries for smartphones, iPads and electric vehicles. Weeks ago I wrote in this article that “Despite the lithium sector being in a correction for six weeks, attention should be paid to this dynamic sector which may be just on the verge of breaking out higher.” The lithium ETF was trading below $13 when that article was written testing the 200 day moving average.
Now the lithium ETF is poised to make a powerful breakout at new 52 week highs at $14. A game changing event occurred last week when Albemarle paid over $6.2 billion to buy the world’s largest publicly traded lithium producer Rockwood Holdings………………………………………..Full Article: Source

IMF cuts global growth outlook, warns of stagnation risk in rich nations

Posted on 25 July 2014 by VRS  |  Email |Print

The International Monetary Fund on Thursday chopped its 2014 forecast for global economic growth to take into account weakness early in the year in the United States and China, the world’s two biggest economies. The IMF warned that only some of the factors leading to the reduction were temporary, and richer nations in particular faced the risk of economic stagnation unless they took steps to foster sustainable growth.
In an update to its World Economic Outlook report, the IMF said the global economy should expand 3.4 percent this year, 0.3 percentage points below what it predicted in April. Growth should still speed up to 4 percent next year, it said, unchanged from what it predicted earlier this year………………………………………..Full Article: Source

Can OPEC Control World Oil Prices

Posted on 25 July 2014 by VRS  |  Email |Print

It is the world’s most famous cartel OPEC that currently controls almost three quarters of the world’s crude oil, a commodity that, as of right now, industrialized nations cannot do without. OPEC is currently an organization comprised of 11 member countries: Algeria, Indonesia, Iran, Iraq, Kuwait, Libya, Nigeria, Qatar, Saudi Arabia, United Arab Emirates, and Venezuela.
Formed in 1960 by 5 countries, OPEC clearly dominates world oil as its member countries produce 41% of the world’s oil, and comprise 55% percent of the world’s traded oil. Perhaps the most important statistic is the amount of the world’s oil reserves that OPEC member countries control; they control over 78% of all crude oil reserves………………………………………..Full Article: Source

The Shale Boom is Big and Good (Bad) for the Economy

Posted on 25 July 2014 by VRS  |  Email |Print

Hydraulic fracturing (“fracking”) has flipped the global energy discussion on its head. Over the past five years, the world has watched the U.S. shift its focus from fears of peak oil and its level of oil imports to a new reality where domestic oil and gas production are up and imports are down. And, while global greenhouse gas emissions have continued to increase, U.S. emissions have now decreased down to 1994 levels.
As shown in the graphic below from International Energy Agency’s Unconventional Gas Production Forum, shale gas production has dramatically increased in the United States over the past decade – in particular since 2009………………………………………..Full Article: Source

China gold demand falls by a fifth, but output rises

Posted on 25 July 2014 by VRS  |  Email |Print

China’s gold demand fell by nearly a fifth in the first half of 2014 from a year ago as consumer interest in bullion bars and coins waned.
Soaring purchases by retail customers in 2013 helped China overtake India as the world largest gold consumer for the first time. That buying “frenzy”, as the metals consultancy Thomson Reuters GFMS described it, was largely driven by the 28 per cent fall in the gold price last year………………………………………..Full Article: Source

Oil prices near lows, Russia sanctions, Iraq tensions support: PIRA Energy

Posted on 24 July 2014 by VRS  |  Email |Print

NYC-based PIRA Energy Group believes that with both the physical market and financial length bottoming, oil prices are at or near their lows. In the U.S., sharp crude stock reduction is offset by a product build. In Japan, crude stocks posted a large draw. Specifically, PIRA’s analysis of the oil market fundamentals has revealed the following:
Sharp U.S. Crude stock reduction offset by product build: Crude stocks fell for the week ending July 11, 2014 while product inventories built, causing an overall inventory build. This inventory pattern fits with record crude runs. Last year for the same week, inventories were down slightly so the year-on-year inventory excess widened. Crude oil and other products are up on last year while the four major product inventories are down………………………………………..Full Article: Source

Bank Exodus From Commodities Could Hurt Liquidity Short Term

Posted on 23 July 2014 by VRS  |  Email |Print

The trend of major banks leaving the commodities business could hurt liquidity in the short term, but eventually other trading firms will fill the void, say veterans of the commodities business. Most do not look for a major impact on the price trend of commodities in general; after all, speculators can establish either long or short positions. Nevertheless, some pointed out that past moves by banks to exit happened to coincide with a bottoming in commodities prices.
Credit Suisse said Tuesday it plans to wind down its commodities trading to focus on other areas of its business. Previously, Deutsche Bank, JPMorgan and Barclays also said they are either scaling back or exiting the commodities arena………………………………………..Full Article: Source

World events prompt buying in commodities markets

Posted on 21 July 2014 by VRS  |  Email |Print

Midday Thursday, a Malaysia Airlines flight crashed in Eastern Ukraine, killing all 298 people aboard. Initial fears that the plane had been shot down were supported by intelligence agencies, sparking concerns that the crash could signal a deepening of the conflict between Ukraine and pro-Russian separatists. As global investors processed the news, they sold off stocks and bought commodities that could be in short supply if sanctions or increased military conflict followed the plane crash.
The primary issue on commodities traders’ watch list is whether pro-Russian forces will be implicated in the plane crash, which could lead to a fresh round of Western sanctions against Russia. If trade between Russia and the West suffers, one of the worst-hit markets could be palladium, since Russia mines nearly 40 percent of the world’s supply………………………………………..Full Article: Source

The Effect of Geopolitical Events on Commodities (Video)

Posted on 21 July 2014 by VRS  |  Email |Print

Bloomberg’s Isaac Arnsdorf discusses the effect of events in Ukraine and Russia on commodity prices with Alix Steel on “Street Smart.”.………………………………………Full Article: Source

Amid Global Turmoil, Oil Prices Surprisingly Stable

Posted on 21 July 2014 by VRS  |  Email |Print

The world has entered a zone of maximum upheaval. From the Atlas Mountains of North Africa to the Hindu Kush, in Afghanistan, the Middle East is in flames. The destruction of a Malaysian airline over Ukraine, almost certainly shot down by Russian-backed separatist rebels, threatens war in the Black Sea region.
Libya is being torn apart by competing militias, while parts of Iraq are under assault by the murderous Islamist force known as ISIS. Syria remains a bloody horror show, and Israeli troops have launched a ground invasion of Gaza. At no time since the terror attacks of 2001 has the world seen such conflict and instability………………………………………..Full Article: Source

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