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Global slump in agri commodities to persist: report

Posted on 02 July 2015 by VRS  |  Email |Print

A major factor driving lower food prices globally is lower oil prices that is pushing down energy and fertilizer costs, the report said, adding, this will remove incentives for production of bio-fuels. Better crop yields and a slower growth in global demand will lead to a gradual decline in real prices of major crops over the next decade, said the Agricultural Outlook 2015-2024 released on Wednesday.
However, crop prices are likely to remain at levels above those in the early 2000s, observed the report released by the Organisation for Economic Cooperation and Development (OECD) and UN’s Food and Agriculture Organization (FAO)………………………………………..Full Article: Source

Commodities Break Their Ties

Posted on 02 July 2015 by VRS  |  Email |Print

Tumbling oil prices and a historic rally in the U.S. dollar had commodity markets marching in lock step for months, but they broke ranks in the second quarter. Oil prices, which touched six-year lows in March, gained 24.9% in the second quarter on expectations of slowing supplies and higher demand.
Meanwhile, the dollar pulled back from 12-year highs as investors pushed back their forecasts for higher interest rates in the U.S. “This has helped commodities become independent and dispersed once again,” said Michael Haigh, global head of commodities research at Société Générale………………………………………..Full Article: Source

Greece is in crisis—why no love for gold?

Posted on 02 July 2015 by VRS  |  Email |Print

People tend to flock to gold as a safe-haven investment during a crisis. So, why not in the case of Greece? There is no reason for gold to get any love now because this is a political crisis, not a currency crisis. The primary reason you buy the “barbarous relic” that is gold is fear of a global currency crisis.
In Greece, citizens and investors are not concerned about having a currency to use; the only unknown is which currency they will adopt or create. Currently, the Greek citizens have a currency, the euro, but using it is next to impossible with the banks closed………………………………………..Full Article: Source

Greece default: Why isn’t gold budging?

Posted on 02 July 2015 by VRS  |  Email |Print

Gold’s stubborn non-reaction to Greece’s default on its crucial 1.5 billion euro repayment ($1.7 billion) to the International Monetary Fund (IMF) couldn’t be more disappointing to bullion bugs. The yellow metal reversed slight gains to trade around 0.3 percent lower at $1,169 on Wednesday, despite heightened uncertainty around the fate of the heavily-indebted nation.
So, why isn’t the yellow metal catching a safe-haven bid? Here’s what commodities analysts are chalking it up to, in their own words: First off, investors expect the Greek crisis will be contained. Victor Thianpiruiyam, commodity strategist at ANZ: “The market seems a little more confident with the situation now. There seem to be reassurances from euro zone officials that the contagion risk from Greece will be relatively small if any at all………………………………………..Full Article: Source

Why an Iran deal could mean lower oil prices

Posted on 01 July 2015 by VRS  |  Email |Print

A final accord to curtail Tehran’s nuclear ambitions could lead to a glut of Iranian oil hitting an already “oversupplied market,” which would serve to pressure prices, oil expert John Kilduff said Tuesday, as negotiators in Vienna face a deadline that’s expected to be extended.
Returning to the talks after consultations at home, Iran ’s chief diplomat insisted Tuesday he has a mandate to finalize a nuclear agreement, despite increased signs of backtracking. “Right now the happy talks is flowing … that things are looking good for a deal,” said Kilduff, founding partner of Again Capital, an alternative investment manager specializing energy and metals………………………………………..Full Article: Source

Silver About to Turn More Volatile

Posted on 01 July 2015 by VRS  |  Email |Print

Silver has moved sideways for about nine months, after it moved sideways from a slightly higher level for about 14 months. Boring! The big events in the past 5 years have been: August 2010: Silver began a huge move from under $18 to nearly $50. April 2011: Silver hit a 30 year high just under $50.00.
May 2011: Silver crashed to about $34. HFT left fingerprints at the scene. January 2013: Silver dropped below $30. April 2013: President Obama met with a group of influential bankers in the White House. The price of silver crashed the next day and by June silver had dropped to about $19. (If it happens in politics, it was planned…) November 2014 & March 2015: Silver made a double-bottom at about $15. Few noticed………………………………………..Full Article: Source

El Niño set to disrupt key commodities in 2015

Posted on 30 June 2015 by VRS  |  Email |Print

El Niño 2015 is underway and set to hit wheat, coffee and sugar cane production leading to volatile prices, warns a Rabobank report. With buffer stocks for these commodities at ‘comfortable levels’, some of the impact of a particularly strong El Niño would be buffered - but not completely shielded from fundamental and speculative influences. This also held for soy oil and palm oil, the report said.
While ‘meaningful’ climate disruptions had yet to be observed, Rabobank warned that key drivers of the phenomenon – such as a rise in sea surface temperatures – would intensify from September to November. The National Oceanic and Atmospheric Administration(NOAA) has predicted a strong event for 2015………………………………………..Full Article: Source

Water: The Next Tradable Commodity?

Posted on 30 June 2015 by VRS  |  Email |Print

Water will one day be soon traded as a commodity. Setup in 2003 as an unmanaged benchmark, the Palisades Water Index is tracked by many water indexes and ETFs. As the popular rhyme goes: “Water, water everywhere, but not a drop to drink” tweet.
Public perception has begun to change regarding water no longer being an infinite resource as we previously thought. Despite it covering 68% of the surface of the planet, the amount that actually serves a purpose for humans is only a mere 0.3%. With what some perceive as an “epidemic” expanding globally, experts predict that the only sustainable way in managing water is to trade it on a futures exchange, similar to other natural commodities such as oil and gold………………………………………..Full Article: Source

One of Indonesia’s Richest Men Is Bullish on Commodity Processing

Posted on 29 June 2015 by VRS  |  Email |Print

As the head of one of Indonesia’s largest investment companies, Peter Sondakh knows to follow market trends. It’s the reason he took up smoking cigars last year, he says, beneath the whir of air purifiers in his office. It’s also, he says, partly why he’s selling off stakes in his palm oil plantation – Indonesia’s third largest – in the hope of moving toward processing, refining and trading at a time when slumping commodity prices and weakened demand for raw materials from China have dented the economy.
“I pride myself in adding value,” said Mr. Sondakh, whose PT Rajawali Corp. is one of Indonesia’s biggest conglomerates with investments in mining, property, plantations and media. “Added value products will have more profit.”……………………………………….Full Article: Source

Commodities Drop With a Dull Thud

Posted on 26 June 2015 by VRS  |  Email |Print

July looms but the dog days for commodities markets have arrived already. Investors in the likes of copper, oil, and grains are used to having a little action in their lives: a war here, a hurricane there. But while the world remains a dangerous place, commodities markets aren’t really feeling it.
Of the major raw materials, only crude oil and gasoline have registered gains so far this year. Everything else is down, underperforming the S&P 500. Even oil’s rally has lost momentum since April and merely reflects a little recovery from last year’s washout: Look back over one year and, like all major commodities, it is in negative territory………………………………………..Full Article: Source

Boom in once-scarce ‘rare earth’ metals ends in US miner’s bust

Posted on 26 June 2015 by VRS  |  Email |Print

A slump in the prices of obscure metals used in advanced electronics claimed its highest-profile victim on Thursday when the biggest non-Chinese producer of rare earths sought bankruptcy protection. The petition by Molycorp, based in Colorado, marks a sharp turnround for a company whose shares reached a peak in 2011 of $79, giving it a market capitalisation of more than $6bn.
The company’s decline since then has tracked the plummeting value of metals such as Lanthanum, Praseodymium and Ytterbium as the Chinese government’s failed efforts to corner the market made the metals far easier to source than before………………………………………..Full Article: Source

South Africa’s Rhodium Mining Boom Sends Prices Tumbling 35%

Posted on 24 June 2015 by VRS  |  Email |Print

The end of labor strikes in South Africa’s mining industry is increasing rhodium production at the fastest pace in two decades and cutting prices. The metal, used to control toxic emissions from cars, dropped 35 percent since August to a 18-month low of $955 an ounce, according to data from Johnson Matthey Plc. South Africa may boost output by 25 percent this year after three years of declines, according to the London-based firm, which makes about a third of the world’s catalytic converters.
“Rhodium is looking very bearish,” David Jollie, head of research at Mitsui & Co. Precious Metals Inc., said by phone from London on Monday. “Buyers are taking the view that if they wait, prices will come to them.”……………………………………….Full Article: Source

Iran has better chance to be a global supplier of gas than oil: expert

Posted on 23 June 2015 by VRS  |  Email |Print

Sara Bazoobandi, a lecturer in international political economy at Regent’s University London, says Iran has a better chance to become a “global gas supplier than oil” by developing its infrastructure. “With developing the infrastructure the country will stand a much better chance to be a global supplier of gas than oil,” Bazoobandi said.
Bazoobandi also says as many other goods the price of oil is “determined by the supply and demand” and “as long as the global production remains unchanged at the current level, the prices will not have dramatic changes.”……………………………………….Full Article: Source

‘Umpteenth’ Greek Summit Sees Gold Prices Fall

Posted on 23 June 2015 by VRS  |  Email |Print

Gold Prices erased two-thirds of last week’s 1.5% jump against a rising US Dollar on Monday, dropping back from $1200 per ounce as Eurozone stock markets held strong gains amid hopes of a quick deal at the latest emergency summit on Greece’s debt crisis.
Five years after the first such summit, “We are approaching an absolutely decisive moment,” French radio was told by the European Union’s economic affairs commissioner Pierre Moscovici today. Greece’s proposals “go in the right direction [and make] a good basis for an agreement,” he said………………………………………..Full Article: Source

Rising U.S. Oil Demand in 2015 - and Beyond

Posted on 22 June 2015 by VRS  |  Email |Print

The constant writing on the oil market today largely focuses on mounting global supply. That’s perfectly understandable: shale oil productivity has increased 50% over the past five years, U.S. crude output is up 90% since 2008, and OPEC infighting on how to deal with the U.S. shale oil revolution is interesting discussion to say the least.
But, oil demand is now becoming more of a focus, as rising global use remains a steady drumbeat. For the U.S., the largest oil consumer in the world at nearly double 2nd place China, demand for the week of June 12 hit 20 million b/d, an 8% increase year-over-year. Overall, U.S. oil demand has seesawed between 18.5 and 20.5 million b/d for years………………………………………..Full Article: Source

Commodities delivering, more or less, as advertised

Posted on 19 June 2015 by VRS  |  Email |Print

The great commodities gold rush of the last decade may not have paid off exactly as investors hoped, but some evidence indicates the asset class is performing more or less as advertised. Commodities, commonly accessed by investing in exchange-traded commodities futures contracts, gained hugely in popularity in the first part of the last decade, as investors sought access to an asset class they thought would give them equity-like returns, diversification and a decent risk profile.
Many investors also bet that the rise in living standard in China and other rapidly developing countries would drive demand and help returns. But a disappointing run of results, especially during and after the financial crisis let some of the air out of the balloon………………………………………..Full Article: Source

How Big Oil Was Saved From the Oil Price Crash

Posted on 19 June 2015 by VRS  |  Email |Print

Low oil prices have been less of a drag on the big integrated oil companies than it has for smaller producers. Diversified portfolios have allowed the largest oil companies to weather the storm better than their smaller competitors.
To be sure, Big Oil has not gotten off lightly. In fact, some of the largest megaprojects that are only undertaken by the oil majors appear to be huge financial burdens. Having spent billions of dollars on extraordinarily large and complex projects — ultra-deepwater, LNG, large oil sands projects — the costs are a colossal weight around the necks of the oil majors. The oil industry has scrapped an estimated $200 billion in future offshore and LNG projects as the industry backs away from the massive costs………………………………………..Full Article: Source

Gold and Silver Price Forecast for the Second Half of 2015

Posted on 18 June 2015 by VRS  |  Email |Print

Investors considering gold or silver as an investment or hedge need a good handle on the factors driving their prices. That’s where supply, demand, trend, and sentiment data come in. With global economic and market factors painting no clear picture about the near-term prospects for many investments, many of you might be considering whether it makes sense to add gold or silver to your portfolios.
Jewelry was down slightly by 3% at 600.8 metric tons, but has remained above its five-year average of 570.3 metric tons. Chinese jewelry demand was down 23 metric tons, but India compensated by climbing 27 metric tons. In China’s case, it seems a combination of slower GDP growth and strong stock markets combined to dent demand. In the case of India, jewelry demand popped 22% year over year, due mainly to unusually weak buying in Q1 2014………………………………………..Full Article: Source

Speculating on commodities can add diversity to your portfolio

Posted on 17 June 2015 by VRS  |  Email |Print

Anyone with an equity fund that tracks the S&P 500 has something close to 10 per cent of their investment in commodities companies, such as oil and gas producers or the miners of metals and minerals. For anyone who owns the FTSE 100, the figure is more than 20 per cent, largely because BP and Shell dominate the UK stock market.
Yet an increasing number of financial advisers suggest that investors should also carve out an additional piece of their portfolio to invest directly in commodities………………………………………..Full Article: Source

China, India are ‘changing the nature’ of gold bullion markets

Posted on 17 June 2015 by VRS  |  Email |Print

There is a shake-up in the gold market—and emerging markets like China and India are to blame. Emerging-market demand is ‘changing the nature of the bullion market,” HSBC analysts, led by James Steel, said in a note on Tuesday. Investment demand was the primary driver of gold until recently, but “price-sensitive EM demand is an increasingly important driver of gold prices, they said.
EM buyers and sellers “largely define” the range for gold—with prices near $1,100 an ounce attracting buyers, but prices near $1,300 causing buyers to “shy away from purchases,” the HSBC analysts said. Gold futures GCQ5, -0.06% settled at $1,180.90 on Tuesday………………………………………..Full Article: Source

Saudi Arabia’s efforts toward diversification cushion oil price drop

Posted on 15 June 2015 by VRS  |  Email |Print

Although Saudi Arabia has substantial financial reserves to withstand low oil prices over the next few years, recent government spending has intensified the need for longer term fiscal, environmental and resource sustainability in the Kingdom, according to a new report commissioned by ICAEW titled “Economic Insight: Middle East Q2 2015” produced by Cebr, ICAEW’s partner and economic forecaster.
Lower oil prices will have a greater impact on Saudi Arabia’s economic growth over the medium rather than the short term. As a result of the government’s decision to allocate additional funding to social activities like education, the breakeven crude oil price has surged from just under $75 in 2009 to $90 in 2015………………………………………..Full Article: Source

Inflation fears drive commodities stakes

Posted on 11 June 2015 by VRS  |  Email |Print

Multi-managers are tip-toeing into commodities to protect their funds against an anticipated uptick in inflation. Expectations have increased in recent weeks that inflation could rise more quickly and higher than previously anticipated. Bank of England governor Mark Carney has predicted a 1 per cent rate by the end of the year.
The fears about rising prices come as the UK registered its first negative consumer prices index (CPI) reading since 1960 last month. While strategic bond managers have been buying up inflation-linked and shorter-dated bonds, multi-asset managers have favoured commodities………………………………………..Full Article: Source

Saudi Arabia, Iraq Push OPEC Over Its Ceiling

Posted on 11 June 2015 by VRS  |  Email |Print

OPEC is producing nearly a million more barrels of oil each day than the target the cartel set last week, and the bulk of the excess is coming from two countries: Saudi Arabia and Iraq. Iraq pumped about 3.8 million barrels a day in May, according to a monthly report by the Organization of the Petroleum Exporting Countries, a level that, if sustained, would set a national record.
Saudi Arabia said it put out 10.3 million barrels a day, a historically high figure up almost 600,000 barrels since its pivotal decision last year to abandon its usual strategy of defending oil prices by cutting production………………………………………..Full Article: Source

New EU rules may hasten commodity liquidity flight

Posted on 09 June 2015 by VRS  |  Email |Print

Planned EU regulations on position limits in commodities are fuelling intense debate about whether the move could prompt traders to flee to Asian markets, further hurting European liquidity and potentially hurting economic growth. Restrictions on banks and capital requirements has already subdued enthusiasm for commodity trading.
The new rules aimed at stopping abuses of pricing power on commodity markets will encompass position limits, or curbs on how much one trading house can hold of a specific commodity, possibly on thousands of futures contracts………………………………………..Full Article: Source

China Now World’s Largest Oil Importer; Effect on Global Market

Posted on 09 June 2015 by VRS  |  Email |Print

Although data opacity makes objective analysis difficult, market observers reported in April that China has surpassed the United States as the world’s largest oil importer. This statistical inflection point needs context to understand global consumption trends.
While oil bulls are anxious about China’s reduced crude growth appetite, fundamental shifts in Chinese currency and domestic consumption strategies point to long-term growth in Chinese hydrocarbon consumption generally………………………………………..Full Article: Source

OPEC adjusts to new oil market reality: Kemp

Posted on 09 June 2015 by VRS  |  Email |Print

OPEC has never really been a “cartel” in the conventional sense of an organisation that agrees to restrict output to maximise revenues. So its decision on Friday not to cut production was entirely predictable and the only practical option open to its members.
The strategy of maintaining production even as prices fall, led by the Saudis but now more or less embraced by most of the organisation’s membership, is really the only sensible course. Most traders sense this: the price of Brent for delivery in December 2015 has been virtually unchanged since February and barely moved on Friday………………………………………..Full Article: Source

OPEC agrees to keep pumping as oil glut fears persist

Posted on 08 June 2015 by VRS  |  Email |Print

The decision defers discussion of several tricky questions set to arise as members such as Iran and Libya prepare to reopen the taps after years of diminished production. Oil group OPEC agreed to stick by its policy of unconstrained output for another six months on Friday, setting aside warnings of a second lurch lower in prices as some members such as Iran look to ramp up exports.
Concluding a meeting with no apparent dissent, Saudi Arabian oil minister Ali al-Naimi said OPEC had rolled over its current output ceiling, renewing support for the shock market treatment it doled out late last year when the world’s top supplier said it would no longer cut output to keep prices high………………………………………..Full Article: Source

Oil: OPEC’s Lengthy Suicide Note

Posted on 08 June 2015 by VRS  |  Email |Print

A market flooding production strategy many saw as intending to kill the US-centric shale revolution, has, if anything, only made it stronger. In essence the OPEC cartel is signing its own death warrant.
As always the communique suggests harmony and continuity but behind the scenes this was apparently a more fraught OPEC meeting than most. The ‘swing producer’ Saudi Arabia managed to keep things going the way it wants, albeit by continuing to flood the market with oil below even its own cost of production………………………………………..Full Article: Source

Commodities’ glut to drag on, BHP chief warns

Posted on 04 June 2015 by VRS  |  Email |Print

Oversupply of many commodities is likely to be prolonged, the chief executive of the world’s most valuable mining company has warned in a stark assessment of the gloomy outlook for the industry.
BHP Billiton’s Andrew Mackenzie said miners were facing a “changed environment” because of slower economic growth in China, by far the largest user of most important commodities, and said falling prices were having a “major impact on all companies in our sector”………………………………………..Full Article: Source

U.S. shale and OPEC, the altered balance of power

Posted on 02 June 2015 by VRS  |  Email |Print

Two landmark events this month will underscore the extent to which the oil market’s balance of power has been transformed by the shale revolution. In Washington, Congress will begin considering legislation to permit the export of crude oil from the United States, reversing a four decade ban put in place after the first oil crisis in 1973/74.
In Vienna, the Organization of the Petroleum Exporting Countries (OPEC) is expected to roll over its crude production target of 30 million barrels per day (bpd) even though prices have fallen more than 40 percent over the last 12 months. Rather than reduce production to boost prices, Saudi Arabia and the other OPEC members are prepared to continue pumping to defend market share and maximise revenue………………………………..Full Article: Source

China gold demand holding up well – new record ahead?

Posted on 02 June 2015 by VRS  |  Email |Print

We keep seeing reports in the mainstream media suggesting that Chinese gold demand is slipping away, but continuing strong gold withdrawal figures from the Shanghai Gold Exchange (SGE) seem to contradict these reports. While, as we have reported before, there are many doubts expressed as to whether SGE withdrawals are actually equivalent to Chinese consumer demand, there is no doubt that they do represent the underlying consumption situation.
Hong Kong-based Philip Klapwijk, the former executive chairman of GFMS prior to its acquisition by Thomson Reuters, did explain some of the discrepancies between the mainstream analysts’ Chinese consumption figures and SGE withdrawals (which differed last year by around 1,000 tonnes) as unrecorded cross border gold movement from mainland China into Hong Kong (technically illegal) in a presentation to the Bloomberg Precious Metals Forum a week ago ……………………………….Full Article: Source

Chinese are going for gold — and so should our miners

Posted on 01 June 2015 by VRS  |  Email |Print

China is oversupplied with gold, according to one analysis — only the Chinese don’t seem to be in on this news. Otherwise why would they be in the process of setting up what will be the world’s largest fund in terms of physical gold held, eventually to grow to $US16 billion ($20.9bn) worth of the yellow metal? Or indeed why would they have entered big deals over the past week to get a foothold in Papua New Guinea and Siberian gold production?
And central banks are no longer so laid back about gold ­reserves. Who can forget the decision by the central banks of Britain, Australia, Switzerland (the Swiss off-loaded 1550 tonnes), The Netherlands, Portugal, Spain and France to sell from the late 1990s, and at the bottom of the market into the bargain?…………………………………Full Article: Source

Turn out the lights as commodity spending boom ends

Posted on 28 May 2015 by VRS  |  Email |Print

Australia, one of the engine rooms of the decade-long global commodity boom, is forecasting a staggering 90 per cent plunge in spending on projects, calling time on its biggest resources bonanza since the 1850s gold rush. After a collapse in prices from oil to iron ore, the value of the nation’s approved and financed mining and energy projects is forecast fall to about $15 billion in 2017, from $226 billion at the end of April.
Planned iron ore projects worth at least $10 billion have been canceled since October, according to the Department of Industry and Science. Billionaire Gina Rinehart’s Roy Hill — due to ship later this year — is Australia’s last remaining mining project being developed worth $5 billion or more…………………………………….Full Article: Source

Where next for the oil industry?

Posted on 28 May 2015 by VRS  |  Email |Print

Oil companies have had to make dramatic changes to their view of the future following the collapse in the oil price at the end of last year. The surge in US shale oil production and Saudi Arabia’s reluctance to step aside and make room for the extra oil have forced the industry to reassess the viability of their exploration and development efforts.
Cuts to capital expenditure have been made and then redoubled. Even so, profits have fallen sharply for the big oil companies in the first months of 2015, whilst some exploration and production companies have been forced to reclassify their higher cost reserves as uneconomic at current prices…………………………………….Full Article: Source

Opec backing Saudi Arabia’s plan to keep supplies elevated

Posted on 28 May 2015 by VRS  |  Email |Print

When Saudi Arabia argues next week that Organisation of Petroleum Exporting Countries (Opec) should keep up production to fight the rise in US shale oil levels, prices will be on its side.
Crude plunged for eight of nine weeks prior to group’s November gathering, when the kingdom faced down opposition from the majority of fellow members, who advocated output reductions to tackle a global glut. With oil companies around the world cutting investment, US output peaking and prices up, Saudi Arabia’s strategy will be extended at Opec’s semiannual meeting on June 5, say Societe Generale and Bank of America…………………………………….Full Article: Source

India’s proposed gold deposit scheme could be a game-changer worldwide

Posted on 26 May 2015 by VRS  |  Email |Print

If the much-vaunted gold deposit scheme that seeks to tap into the country’s idle stock of 20,000-22,000 tonnes of the yellow metal succeeds in unleashing a fraction of that trapped wealth into the market, a likely supply-demand imbalance will turn the bullion market into a topsy-turvy state, said analysts.
Two likely scenarios — a supply glut and consequent price crash — that may emerge if India succeeds with its landmark gold monetisation plan will have a game-changing impact on the global precious metal industry………………………………………..Full Article: Source

Commodities, precious metals funds outflows biggest since 2013 -Lipper

Posted on 22 May 2015 by VRS  |  Email |Print

Investors in U.S.-based funds pulled $597 million out of funds that specialize in commodities and precious metals in the week ended May 20, data from Thomson Reuters’ Lipper service showed on Thursday. The outflows were the biggest since December 2013. Stock funds posted $1.7 billion in outflows over the latest week after attracting $3.7 billion in inflows the prior week.
U.S.-based non-domestic-focused stock funds attracted $3.3 billion of inflows, their 15th straight week of net new cash. “I’m speculating here but possibly stronger economic news caused investors to pull money out of commodities and into stocks,” said Patrick Keon, research analyst at Lipper………………………………………..Full Article: Source

Kingdom built on oil foresees fossil fuel phase-out this century

Posted on 22 May 2015 by VRS  |  Email |Print

Saudi Arabia, the world’s largest crude exporter, could phase out the use of fossil fuels by the middle of this century, Ali al-Naimi, the kingdom’s oil minister, said on Thursday. The statement represents a stunning admission by a nation whose wealth, power and outsize influence in the world are predicated on its vast reserves of crude oil.
Naimi, whose comments on oil supply routinely move markets, told a conference in Paris on business and climate change: “In Saudi Arabia, we recognise that eventually, one of these days, we are not going to need fossil fuels. I don’t know when, in 2040, 2050 or thereafter.”……………………………………….Full Article: Source

Oil prices gain on ‘bullish’ US petroleum report

Posted on 21 May 2015 by VRS  |  Email |Print

Oil prices rose on Wednesday after data showed a drop in US petroleum supplies and production. US benchmark West Texas Intermediate for delivery in July rose 99 cents to finish at US$58.98 a barrel on the New York Mercantile Exchange.
European benchmark Brent oil for delivery in July gained US$1.01 at US$65.03 a barrel in London. Data from the US Department of Energy showed US crude supplies fell by 2.4 million barrels in the week ending May 15, with daily production of oil dropping 112,000 barrels a day to 9.26 million barrels a day………………………………………..Full Article: Source

Chinese Gold Standard Would Need a Rate 50 Times Bullion’s Price

Posted on 21 May 2015 by VRS  |  Email |Print

A move to a gold standard in China would require an exchange rate of as much as $64,000 an ounce, 50 times bullion’s price now, according to Bloomberg Intelligence. A traditional gold standard, in which the precious metal backs the currency, is basically impossible at current prices due to the amount of metal needed and there’s no evidence the sixth-biggest bullion holder will adopt one, Bloomberg Intelligence said in reports published Wednesday.
Any attempt probably would involve new technologies and depend on the ratio of what is backed, it said. Chinese policy makers are trying to establish the yuan as a reserve currency, and backing it with gold would help attract foreign capital inflows, the Bloomberg research unit wrote………………………………………..Full Article: Source

Commodities Rally Hit by Stronger Dollar

Posted on 20 May 2015 by VRS  |  Email |Print

Commodity prices tumbled on Tuesday, as a resurgent dollar and concerns about weakness in China’s economy pushed investors out of everything from crude oil to copper and corn. The S&P GSCI index, which tracks prices of 24 commodities, recorded its biggest one-day drop in more than a month and ended at its lowest since April 28.
Before that, commodities markets, led by a recent rebound in crude oil, staged a surprising two-month rally that had pushed the index to its highs for the year. Driving the gains was a faltering greenback, which many short-term investors took as a signal to scoop up raw materials………………………………………..Full Article: Source

This innovation will help U.S. win oil price war

Posted on 20 May 2015 by VRS  |  Email |Print

Although some US oil companies are struggling with low oil prices, a new wave of innovation is hitting the oil patch, allowing for a significant reduction in drilling costs. A variety of different improvements in production are starting to show up at all levels across the industry from small firms to oil majors. Statoil for example recently noted that it is experimenting with different types of sand and chemicals to improve production.
And a number of companies have noted that they are moving from drilling wells one at a time, on an ad hoc basis, to drilling multiple wells at once. GE Oil & Gas has produced variable-use pumps that can be turned on and off in order to save energy versus the previous 24-hour a day operation cycle………………………………………..Full Article: Source

Islamic commodity trading getting a boost

Posted on 20 May 2015 by VRS  |  Email |Print

Islamic commodity trading has become more popular in the financial world as of late because an accord seems to have been reached among scholars whether such commodity trading, which is conventionally done through futures contracts and not through the exchange of physical commodities, is permissible as per Islamic law.
So far, Islamic commodity trading has been done mostly by commodity murabaha whereby an institution agrees to purchase goods from a counterparty which promises to buy it back with an agreed mark-up at a later date………………………………………..Full Article: Source

Gold Trapped in Summer Doldrums Usually Means Volatile Wake Up

Posted on 19 May 2015 by VRS  |  Email |Print

For gold traders, summer has come early. Just don’t book your trip to the beach yet. Prices have seesawed for the past two months, leaving the metal trapped in the tightest trading range in two years, according to data compiled by Bloomberg through the end of last week. That’s historically a sign of more volatility to come.
When similar periods of calm blanketed the market, the metal swung 3.3 percent on average in the five days after breaking out of the band, almost twice the usual weekly change. Gold moved around $1,200 an ounce as bullish catalysts, such as signs of faster inflation, were offset by speculation the Federal Reserve will soon raise interest rates. While the weaker dollar usually draws buyers to gold, there’s also less demand for haven assets with equities near all-time highs………………………………………..Full Article: Source

Are precious metals breaking out?

Posted on 19 May 2015 by VRS  |  Email |Print

There is some talk among traders about precious metals breaking out. Silver broke a trendline dating back to summer 2011 and will make its highest weekly close in more than three months. Gold will make its highest weekly close in three months and gold miners had a very strong week. However, do these moves really register as breakouts? Not quite yet, say the charts.
First let’s start with the miners. The weekly candle charts for GDX and GDXJ are shown below along with their 80-week moving averages (in blue) and lateral resistance (in red). For GDX and other indices, the 80-week moving average has perfectly defined bull and bear markets going back five years………………………………………..Full Article: Source

Global outlook increasingly uncertain

Posted on 18 May 2015 by VRS  |  Email |Print

An increasing number of clouds are rolling in from Greece to Britain to the US, which may give investors a reason to pause their bullish bets on equities. Increasingly erratic and extreme shifts in asset pricing are unnerving investors everywhere.
On one level the backup in global bond yields makes sense. The deep-seated deflation that was built into bonds after last year’s oil price collapse now has to be rethought and repriced. But the speed and shock of the bond backlash has exposed illiquidity and overcooked, over-correlated investment positions………………………………………..Full Article: Source

Germans pile into gold amid Greek eurozone default fears

Posted on 15 May 2015 by VRS  |  Email |Print

Economic uncertainty in Europe and fear of a Greek default are turning people to buy gold bars and coins . German investors have piled into gold bars and coins in the first quarter of the year as a hedge against European Central Bank policy and the threat of a Greek default bringing down the eurozone.
Latest figures from the World Gold Council show that Germans increased their buying of gold coins and bars of bullion by 20pc to 32.2 tonnes in the last quarter, the highest rate of purchases seen in a year. ………………………………….Full Article: Source

IEA: OPEC Battle for Oil Market Share Just Beginning

Posted on 14 May 2015 by VRS  |  Email |Print

A global battle for market share between OPEC and non-OPEC producers that has rocked oil markets and fed into the biggest price slump since the financial crisis is just getting started, the International Energy Agency said Wednesday.
Oil prices have plunged since June amid a glut in oil production driven by booming U.S. output and sluggish demand, a combination that threatened the market position of some of the world’s largest oil producers…………………………………….Full Article: Source

Why are commodity prices seeing divergent movements?

Posted on 13 May 2015 by VRS  |  Email |Print

Global commodity markets are currently witnessing divergent price behaviour. In recent weeks, crude oil and many base metals have seen sharp price spikes. On the other hand, there are commodities that have not seen any significant price movement during the same period. Debate among market participants is around factors that have driven prices of some commodities up notwithstanding the fact that fundamentals in some cases are weak.
Among base metals, copper and zinc prices gained about 8 per cent and nickel 11 per cent. Aluminium and lead moved up by 3-4 per cent. The most interesting aspect of the recent price behaviour is that exchange-traded commodities have rallied as headwinds have lost some velocity………………………………………..Full Article: Source

Opec revises up oil demand and cuts US supply forecast

Posted on 13 May 2015 by VRS  |  Email |Print

Oil cartel has upgraded its demand forecast on stronger European growth as US drillers struggle. The Organisation of the Petroleum Exporting Countries (Opec) has revised up its forecast for world oil demand this year on higher consumption in Europe’s biggest economies and cut its estimate for the growth in US supply.
The group of 12 major oil producers now expects demand for crude to increase by 1.18m barrels per day (bpd) of crude to 92.5m bpd in 2015. Opec’s latest closely watched market report said: “The upward movement of European oil demand during the second half of 2014 has continued and been enhanced during the first three months of 2015………………………………………..Full Article: Source

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