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China’s falling currency could spark global tensions

Posted on 27 February 2014 by VRS  |  Email |Print

Whenever a major global economy reverses policy, global markets pay attention. That’s exactly what’s happening in response to the sharp, quick decline in China’s currency.
The Chinese yuan has fallen more than 1% against the U.S. dollar in the past week, after appreciating almost 40% in the past few years. Citing “people familiar with the central bank’s thinking,” The Wall Street Journal reports “China’s central bank engineered” the drop in order to reduce speculation in the currency………………………………………..Full Article: Source

Why commodity trading is the comeback kid

Posted on 26 February 2014 by VRS  |  Email |Print

Hedge funds continue to rush into commodities according to the Commitment of Traders report covering the week of February 18. The bullish bets on 24 US traded commodities jumped by 15 percent to 1,659,000 contracts of futures and options.
This the seventh weekly increase in a row has driven the exposure to the highest since April 2011 and an unprecedented 23 out of 24 commodities tracked in this were bought………………………………………..Full Article: Source

Gold is up 12pct: Has a new bull market begun?

Posted on 26 February 2014 by VRS  |  Email |Print

Is it premature to declare that gold’s bear market is finally over? It certainly looks that way to some chartists, who are making a big deal of gold’s double-bottom at the end of last year just below $1,200. Since then, bullion has risen by $140 an ounce, or more than 10%.
Even if gold’s bear market has ended, it was no slouch: From a September 2011 high of $1,925 an ounce the decline lasted for 27 months and took 38% off of bullion’s price. Gold-mining stocks had a particularly rough time: The NYSE Arca Gold Miners Index fell 70% from September 2011 to its December 2013 low………………………………………..Full Article: Source

Competing supply/demand fundamentals make commodities sector to watch in 2014

Posted on 25 February 2014 by VRS  |  Email |Print

Commodities are off to a wild start this year with extreme weather around the world playing a big part. Natural gas is leading the pack, up 30% off its January lows on a long stretch of extremely cold temperatures across the Midwest and East Coast.
Drought conditions in Brazil and California have sent coffee, sugar and cattle prices racing higher. Coffee is up 62%, its highest level since October 2012. Over the past three weeks, sugar is up 13%. Cattle is trading at record highs, up 7.5% over the past three and a half months………………………………………..Full Article: Source

Silver poised for bigger moves

Posted on 24 February 2014 by VRS  |  Email |Print

The Silver market has been running red hot recently, as traders have looked to push up the value of Silver on speculation that the US economy is weakening, and as risk appetite for precious metals comes back into vogue for traders and hedge funds.
Market momentum in the Silver market has been exciting, and liquidity and volatility are certainly very high, leading to opportunities for Silver. With its bullish trend line dominating the charts combined with positive market sentiment, it looks likely that further highs are on the horizon. ……………………………………….Full Article: Source

G-20 finance chiefs vow to boost world economy by $2 trillion over next 5 years

Posted on 24 February 2014 by VRS  |  Email |Print

Finance chiefs from the 20 largest economies agreed Sunday to implement policies that will boost world GDP by more than $2 trillion over the coming five years. Australian Treasurer Joe Hockey, who hosted the Group of 20 meeting in Sydney, said the commitment from the G-20 finance ministers and central bankers was “unprecedented.”
The world economy has sputtered since the 2008 financial crisis and global recession that followed. Progress in returning economic growth to pre-crisis levels has been hampered by austerity policies in Europe, high unemployment in the U.S. and a cooling of China’s torrid expansion………………………………………..Full Article: Source

NZ: Commodity export boom forecast

Posted on 20 February 2014 by VRS  |  Email |Print

Strong demand for New Zealand’s main commodity exports - particularly from China - has prompted the Ministry for Primary Industry to revise up its revenue forecast for the sector by $4.9 billion to $36.5 billion for 2013/14.
The ministry, in an update of last year’s Situation Outlook for Primary Industries, said the net effect of higher demand for dairy was a $2.7 billion increase in forecast dairy revenues over last year’s forecast for the 2013/14 year to June………………………………………..Full Article: Source

Commodities: Coiled and ready?

Posted on 20 February 2014 by VRS  |  Email |Print

While most traders white-knuckled the sharp equity drop last month, a much bigger (and more important) trend emerged… In case the market has distracted you, here’s what you’ve missed: Gold is up nearly 10% on the year…Silver is up 13%…
After a sharp drop in January, crude oil has risen more than 4.5% since Jan. 1…Thanks in part to a harsh winter, natural gas has spiked a whopping 31%… Due to drought concerns, soybeans are up more than 5.5%, while coffee has blasted higher by 38%………………………………………….Full Article: Source

China overtakes India in gold demand in 2013: WGC

Posted on 19 February 2014 by VRS  |  Email |Print

For the first time India lost its tag of the world’s largest gold consumer to China, which lapped up 1,065.8 tonnes of the precious metal in 2013, says a World Gold Council report. India’s demand came down to 974.8 tonnes following wide- scale curbs imposed by the government to tame hunger for the precious metal, according to WGC’s ‘Gold Demand Trend 2013′.
Despite the massive increase in customs duty and many restrictions that the Centre put on jewellery imports, India consumed more gold than 2012, when it stood at 864 tonnes. In China, the total demand stood at 806.8 tonnes in 2012. “While China has put in infrastructure that was in favour of gold, India has turned away from it………………………………………..Full Article: Source

Gold price endures rollercoaster ride

Posted on 19 February 2014 by VRS  |  Email |Print

The World Gold Council’s (WGC) annual report on demand trends for the precious metal reveals the inner workings of the market last year. While gold’s price endured something of a roller coaster ride, the fundamentals underpinning its value seemed to have been remarkably resilient.
Last year saw the largest volume increase in jewellery demand for 16 years as consumers across the globe reacted to lower gold prices, the WGC revealed. Full year demand was 2,209.5 tonnes, 17% above the 2012 figure and the highest level since the onset of the 2008 financial crisis………………………………………..Full Article: Source

Are commodities safe yet?

Posted on 17 February 2014 by VRS  |  Email |Print

After watching commodities take a beating over the past three years, investors may want to consider carefully treading back into the sector, financial advisers say. The average U.S. commodity-focused mutual fund and exchange-traded fund has gained 2.2% in 2014 through Thursday, according to Chicago-based investment-research firm Morningstar. Meanwhile, blue-chip stocks, as represented by shares of the SPDR S&P 500 ETF Trust, are down 0.91% over that period.
“Commodities still need to be approached with caution,” says Stephen Jury, global head of currencies and commodities at J.P. Morgan Private Bank in New York, which oversees $977 billion. “They’re not ready for another bull run.”……………………………………….Full Article: Source

China’s oil addiction growing

Posted on 17 February 2014 by VRS  |  Email |Print

Unless the Chinese government takes steps to cut oil consumption, China’s oil consumption may increase by 60% by 2030. Even worse, over 75% of its oil consumption will have to come from imports.
That comes from a new study out by China’s Development Research Center, which highlights China’s alarming trajectory – oil demand will continue to rise and meeting that demand will have to come increasingly from foreign sources. Li Wei, the Director of the Development Research Center, said that China must transform itself to avoid the security and environmental challenges this would bring………………………………………..Full Article: Source

China’s Commodity tapering and what it means for Brazil and South Africa

Posted on 14 February 2014 by VRS  |  Email |Print

When the Quantitative Easing began with the advent of the financial crisis of 2008, little did someone think that it would have in store yet another round of financial issues. Yes, coupled with easing which saw a deluge of Dollars hitting the markets, the banks in US and Europe brought down the interest rates to the position that it was in effect made to be practically irrelevant. The term, ‘near-zero interest rates’ represented the situation with absolute authenticity.
But after six years of a roller coaster ride, US began to see the return of growth. Easing was tapered and it currently stands at a monthly purchasing of $65 billion in bonds and mortgage backed securities by Fed………………………………………..Full Article: Source

Why are commodities rallying despite China fears?

Posted on 14 February 2014 by VRS  |  Email |Print

Societe Generale’s Cross Asset Research published their monthly Commodity Compass on Tuesday of this week. SG analyst Mark Keenan and Head of Commodity Research Michael Haigh suggest that the current turmoil in emerging markets is not likely to influence commodities price unduly.
They argue that commodity prices are in general tracking economic growth, and as long as China’s economy stays on track, commodity prices should be stable with an upward bias in 2014………………………………………..Full Article: Source

Betting on the next oil boom? You’re grasping at straws

Posted on 14 February 2014 by VRS  |  Email |Print

Unplanned interruptions in the global oil supply chain last year were about 30 percent higher than in 2013, the U.S. Energy Department said. Much of the problem was blamed on Libya, though sputtering from Kazakhstan’s giant Kashagan field played a factor as well. This year could be North America’s to lead in terms of secure production, but the story for 2014 is as certain as market predictions themselves.
The U.S. Energy Information Administration said crude oil supply disruptions from OPEC averaged 1.8 million barrels per day, but actually hit the 2.6 million bpd by the end of the year because of on-again off-again supplies from Libya………………………………………..Full Article: Source

Commodities rise to 2014 high as Goldman maintains bearish view

Posted on 13 February 2014 by VRS  |  Email |Print

Commodities climbed to the highest since December as extreme weather fueled supply concerns for crops and energy at a time of rising imports by China. Goldman Sachs Group Inc. says this year’s gains will be short-lived.
The Standard & Poor’s GSCI Spot Index of 24 commodities gained 0.2 percent to settle at 636.22 yesterday, after touching 639.93, the highest since Dec. 30. Coffee led gains, and cocoa reached the highest since 2011. Gold capped the longest rally since June 2012………………………………………..Full Article: Source

Commodities back in favour, says ETF Securities

Posted on 13 February 2014 by VRS  |  Email |Print

Cyclical commodities, especially industrial metals were favoured by investors. Platinum, copper and silver were the top three individual picks with platinum coming out well on top with 31% choosing it as their favourite, followed by copper at 26%. Silver followed suit with an average of 15% choosing it as a top performer in 2014. Gold also saw strong interest (with 13%) concluding the metal is still seen as a hedge against potential growth and financial risks in 2014.
The results confirm earlier predictions that if global economic growth remains on track, commodity performance will follow. Platinum and silver exchange-traded products (ETPs) received the largest inflows in 2013 with $1.3 billion and $841 million respectively as investors shifted away from gold towards commodities more positively correlated with the global industrial cycle………………………………………..Full Article: Source

Wall Street’s grandfathers of commodities to survive Fed revamp better than others

Posted on 13 February 2014 by VRS  |  Email |Print

As the U.S. Federal Reserve considers new ways of reining in banks’ trading in what it sees as risky physical commodity markets, Wall Street’s two oldest and biggest players may ultimately gain in stature.
Thanks to a longstanding legal exemption that Fed officials say limits their regulatory capacity, Morgan Stanley and Goldman Sachs may yet emerge from the regulatory upheaval that is upending banks’ commodities trading better-off than their peers, who face potentially tougher new rules………………………………………..Full Article: Source

OPEC joins U.S. in predicting stronger 2014 oil demand

Posted on 13 February 2014 by VRS  |  Email |Print

World oil demand will rise slightly more than expected in 2014, OPEC said on Wednesday, becoming the second major forecaster this week to predict higher fuel use as economic growth picks up in Europe and the United States.
The Organization of the Petroleum Exporting Countries, in a monthly report, said global demand will rise by 1.09 million barrels per day (bpd) this year, up about 40,000 bpd from its previous forecast. The group, which pumps a third of the world’s oil, also sees potential for further rises………………………………………..Full Article: Source

India’s import duties do the trick; 77pct drop in gold & silver

Posted on 13 February 2014 by VRS  |  Email |Print

Gold and Silver imports in India is reported to have suffered a 77% fall in January, plunging to 1.72 billion. Reflections of stringent import regulations along with the RBI imposed 80:20 norms are noted as the main factors for the remarkable fall.
With the intention of curbing the current account deficit (CAD) of the country, the Government of India had implemented several regulations to control the inbound shipment of gold and silver over a year. The import customs duty on gold which stood at 2% was hiked thrice in 2013 to reach 10% now………………………………………..Full Article: Source

Advisers see opportunities in select commodities

Posted on 12 February 2014 by VRS  |  Email |Print

To many investors, 2008’s global financial crisis marked an end to the so-called commodity supercycle of double-digit annual growth since the late 1990s. More than five years later, investors still remain cautious about commodity funds, which have lagged behind the broader market.
But many financial advisers say they aren’t ready to give up on the asset class, noting some select segments offer growth opportunities as the global economy improves………………………………………..Full Article: Source

Is India going back to bullion?

Posted on 12 February 2014 by VRS  |  Email |Print

India’s trade deficit narrowed in January, thanks to the country’s strict import controls on gold imports. But analysts are warning that even though the figures are less alarming, now is not the time to let bullion back in.
The Reserve Bank of India (RBI) imposed tough rules on gold imports last year in an attempt to tackle the country’s crippling current account deficit. India was among many of the emerging markets that saw their currencies get battered when the U.S. Federal Reserve first floated the idea of tapering its quantitative easing program last summer………………………………………..Full Article: Source

Commodities could see 2014 revival

Posted on 11 February 2014 by VRS  |  Email |Print

New performance data shows a possible resurgence could happen this year. Commodities could be set to bounce back from a lacklustre 2013 after new fund flow and performance data hinted at a resurgence.
Brent crude oil, gold, copper and corn were among many areas of commodities that suffered double-digit losses in 2013 but a series of data and fund management commentary appears to be showing renewed support given the bombed out levels………………………………………..Full Article: Source

Commodity groups launch next attack on U.S. position limits rule

Posted on 11 February 2014 by VRS  |  Email |Print

A group of commodity firms came out against a new U.S. rule to curb market speculation in a letter on Monday, after banks successfully shot down an earlier version of the position limits rule in court.
The new rule by the Commodity Futures Trading Commission attracted well over 100 comment letters by industry participants after the agency - which regulates swaps and futures - launched it in November. “The Commission would inevitably hurt the efficient operations of U.S. derivatives markets,” if no changes were made, the Commodity Markets Council said, adding that the rule also exceeded the Congressional mandate………………………………………..Full Article: Source

Commodities make a strong beginning in Feb, Gold waits for trigger

Posted on 10 February 2014 by VRS  |  Email |Print

Commodities witnessed a strong beginning in February with the agri-commodities and metals providing optimism while gold stock markets stabilised after a weak beginning, according to Ole S Hansen, Head of Commodity Strategy at Saxo Bank.
Copper received its first weekly gain on recovery trends in US economy while Shanghai copper rose ater markets returned after a week long Lunar New Year holiday. London Metal Exchange ware houses witnessed shrinking of inventory - with copper falling to 308,000 tons, the lowest in 13 months and less than half of he June 2013 peak of 678,000 tons…………………………….Full Article: Source

Commodity prices suggest the global economy is still in good shape

Posted on 07 February 2014 by VRS  |  Email |Print

So far so good: Commodity prices suggest that the global economy is holding up well despite the latest emerging markets crisis. This confirms that the crisis remains contained mostly to the “Fragile Five” and isn’t morphing into a contagion–so far, knock on wood.
I construct a YRI Global Growth Barometer by simply averaging the price of a barrel of Brent crude oil with the CRB raw industrials spot price index………………………………………..Full Article: Source

Top ideas playing out in commodity arena

Posted on 07 February 2014 by VRS  |  Email |Print

We have obviously been early in buying this dip, but truth be told we would rather be early in buying a correction during a bull market than early buying in a downturn during a bear market.
The fact that we have spread out our purchases is also of comfort, but the point that we want readers to take away from all of this is that we continue to average down in our recent purchases as we are using cash and not margin in those accounts buying this high quality commodity names………………………………………..Full Article: Source

Cold weather makes natural gas a hot commodity

Posted on 06 February 2014 by VRS  |  Email |Print

Natural gas prices, long depressed by industry oversupply, are on an upward tear as strong demand brought on by cold weather pushes storage levels to 10-year lows.
The market was especially volatile Wednesday, with some traders paying as much as $38 a gigajoule at the AECO storage hub, the benchmark for gas pricing in southeastern Alberta. Huge spikes such as this are short-lived, but demonstrate how rocky the market has become………………………………………..Full Article: Source

Commodities: Iron ore, coal slump on emerging market fears

Posted on 05 February 2014 by VRS  |  Email |Print

Turmoil in emerging markets and nervousness about the Chinese economy rocked global bulk commodity prices last month, economists say. Iron ore and coal were the hardest hit. Thermal coal prices out of Newcastle fell 8.4 per cent last month, and premium hard coking coal from Queensland dropped 5 per cent, data from Platts showed. Iron ore fell 8.4 per cent.
In comparison, the IMF primary commodity price index fell 1.9 per cent. Copper and aluminum eased modestly, while lead, nickel and zinc rose, HSBC data showed………………………………………..Full Article: Source

Downtrend in metals unlikely to ease

Posted on 05 February 2014 by VRS  |  Email |Print

Some of the most successful trend-following technical analysts focus purely on commodities, for several reasons. One, commodity futures are liquid, highly traded and driven by global considerations. So, price discovery is, by and large, good. Two, when commodities go into trends, those can last for months or even years. Three, these contracts are margin-traded and it is as easy to go short as to go long.
Price trends in non-precious metals are driven largely by global supply and demand. Last year was bad for metals. Downbeat economic conditions meant iron ore declined a little over 15 per cent in price, globally. Copper prices on the London Metal Exchange dropped nine to 10 per cent. Aluminium hit a five-year low………………………………………..Full Article: Source

Commodities: Winter is coming

Posted on 04 February 2014 by VRS  |  Email |Print

A month into 2014, the winning position in the commodities market is to be frozen with fear—literally. Last year was, on average, another one to forget for investors in raw materials: The Dow Jones-Commodity index fell 10% against a 24% increase in the MSCI World Index of stocks. But those trends reversed in January. The MSCI index finished the month down 3.7%, while the DJ-UBS index eked out a slight gain.
But as rallies go, this one is at best a two-horse race. It is fortunate for investors in the DJ-UBS that its biggest component, weighing in at nearly 14.5%, is U.S. natural gas. Near-term gas futures returned about 18% in January amid America’s big freeze………………………………………..Full Article: Source

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UK to miss out on shale gas revolution says IEA economist

Posted on 03 February 2014 by VRS  |  Email |Print

Shale gas will not herald an energy revolution in the UK in the same way it has in the US, according to chief economist and director of global energy economics at the International Energy Agency (IEA).
In remarks that may temper the enthusiasm of shale gas supporters, Fatih Birol told the Daily Telegraph: “The UK has significant shale gas resources but people shouldn’t expect a US scale energy revolution in the UK. The economics are not as favourable as in the US.”……………………………………….Full Article: Source

Gold price going up or mines will close within 6 months

Posted on 03 February 2014 by VRS  |  Email |Print

“After three painful years in gold prices and related stocks, have we hit the bottom? Will they head higher?” Steve Todoruk began a recent letter to his clients at Sprott Global Resource Investments Ltd. with these pressing questions.
His take is that either the metals will start going up in the next six months, or the big mining companies will have to close down a lot of their operations. That, in turn, could squeeze supply, initiating another long-term up move, but at a high cost to the producers. So, where are we headed next for precious metals and mining companies?……………………………………….Full Article: Source

Doubts cast on Treasury’s commodity forecasts

Posted on 03 February 2014 by VRS  |  Email |Print

Commodity prices will eventually shed all their gains from the China boom as new supplies and new technologies bring supply and demand back into balance. This finding, contained in academic research presented at the recent American Economics Association conference, is much more pessimistic than implied by the new forecasting methods adopted by Treasury, which assume that Australia’s terms of trade (export prices compared with import prices) will settle at a level 40 per cent higher than their long-term average and remain there at least until 2030.
Estimating the probable path of export prices has been the most vexed forecasting problem for Treasury over the past decade………………………………………..Full Article: Source

Commodity producers face second year of falling prices

Posted on 31 January 2014 by VRS  |  Email |Print

Prices of the main commodities – energy, metals, agriculture and fertilisers – are expected to decline for the second successive year in 2014, the World Bank said on Thursday.
In its quarterly commodities outlook, the bank painted a gloomy picture for commodity producers, though consumers have reason for cheer. Energy prices are expected to fall the least of all the main commodity classes, dropping 0.1 per cent this year, the same amount as in 2013………………………………………..Full Article: Source

Goldman sees more pain ahead for commodities

Posted on 31 January 2014 by VRS  |  Email |Print

Banks led by Goldman Sachs Group Inc. and Citigroup Inc. say commodities are heading for losses in 2014 as rising supplies and slowing demand compound slumps that led to bear markets last year in gold, copper and corn.
Open interest measuring holdings across the 24 commodities tracked by the Standard & Poor’s GSCI Spot Index fell for three straight quarters through December, the longest slump since the global recession in 2008. The super cycle that led commodities to almost quadruple since 2001 is reversing, with prices set to drop 3 percent in 12 months, Goldman said. The asset class will be a “wallflower” compared with equities, Citigroup said………………………………………..Full Article: Source

Renewable energy: Little wonders

Posted on 31 January 2014 by VRS  |  Email |Print

In Germany local people hold stakes in about 40% of renewable generation. In Britain almost all of it is owned by big businesses. In 2010 the coalition government—then touting plans for a “big society” of active communities—promised support for groups that build their own low-carbon generators. On January 27th it tried to deliver the goods.
Community groups hope that having their own wind, solar and hydro projects will help cut carbon emissions and bring in cash for neighbourhood causes or for more green schemes. The government sees a chance to further national goals. A green-minded electorate is less likely to oppose big renewable developments and more likely to tolerate the impact of environmental policies, such as rising bills………………………………………..Full Article: Source

Coal will ‘dominate global power sector for decades’

Posted on 30 January 2014 by VRS  |  Email |Print

Coal will dominate the power sector globally for decades to come, according to a paper that miners say undermines campaigns by green activists to “demonise” coal.
The paper - written by an International Energy Agency consultant and to be sent to Industry Minister Ian Macfarlane - says coal will remain the dominant power-sector fuel for at least the next quarter of a century despite efforts to diversify power sources and concerns about slower economic growth………………………………………..Full Article: Source

Commodities expected to rebound: Scotiabank

Posted on 29 January 2014 by VRS  |  Email |Print

Gold prices are set to rebound in 2014 as commodity markets in general get a boost from the U.S. economic recovery and a more stable Chinese economy, says Patricia Mohr, commodities specialist at Scotiabank Capital Inc.
“While gold is vulnerable to further rounds of Fed tapering through 2014 (that is, reduced ‘liquidity’), chances are good that gold has bottomed,” Ms. Mohr said in her latest report to clients. “Gold is currently trading at US$1,261 (bid as a ‘safe-haven’ amid fresh emerging-market concerns) and should rally to US$1,375 in 2015, on prospects for higher inflation in the second half of the decade.”……………………………………….Full Article: Source

10 things to watch for in the commodities space

Posted on 29 January 2014 by VRS  |  Email |Print

Citi commodity research has come out with a report highlighting 10 areas that should be watched as they will have an impact on the world’s largest commodity consumer with 40 per cent market share. These factors could shape commodity prices and demand outlook in the coming months and years.
Environmental initiatives: Environmental pressures are in the spotlight as never before, particularly for coal and steel, where the strictest measures yet were implemented in 2013. There remains a lack of top-level direction, but mid-level officials have begun to push………………………………………..Full Article: Source

Iraq and Iran plot oil revolution in challenge to Saudi Arabia

Posted on 29 January 2014 by VRS  |  Email |Print

Iraq’s goal of pumping 9m barrels a day of crude could be a game changer for oil prices and British companies. Iraq is poised to flood the oil market by tripling its capacity to pump crude by 2020 and is collaborating with Iran on strategy in a move that will challenge Saudi Arabia’s grip on the Organisation of Petroleum Exporting Countries.
“We feel the world needs to be assured of fuel for economic growth,” Hussain al-Shahristani, Deputy Prime Minister for Energy in Iraq told oil industry delegates attending a Chatham House Middle East energy conference………………………………………..Full Article: Source

Gold and silver will shine again in 2014

Posted on 29 January 2014 by VRS  |  Email |Print

The commodities supercycle of 2000-2008, which produced roughly 20 per cent compound annual returns, was driven by scarcity of supply to meet the demands of emerging nations - notably China. Investment in the mining and extraction industries has now caught up with demand, ironically at a time when the latter is levelling out.
Western markets such as the US and UK are recovering, but they are less commodity-intensive than emerging markets, where the construction of infrastructure has been fast and furious. As a result, prices of base metals such as copper and aluminium have moved sharply lower this year since China’s growth stumbled, and only oil, which is primarily influenced by the geopolitical backdrop, has risen………………………………………..Full Article: Source

The problem with commodities

Posted on 28 January 2014 by VRS  |  Email |Print

The rise of shale gas and fracking has fuelled debate on one area of commodities, but is the commodity sector starting to see the benefit? The recent news that French firm Total will be the first oil major to explore the UK for shale gas caused a debate on the rights and wrongs of fracking, but the long lead times on developing and eventually exploring this type of fuel mean it is not a short-term commodity play.
Not just energy, but the whole of the commodity sector has suffered in the past year, with both oil and gold prices struggling, in spite of the former being expected to benefit from disruptions in the Middle East. The price of Brent Crude oil slipped from its high of $119 a barrel in February 2013 to roughly $107 in January 2014 via a dip as low as $96 in April last year………………………………………..Full Article: Source

Commodity-driven economies are tanking

Posted on 28 January 2014 by VRS  |  Email |Print

Argentina, a commodity-driven economy that is facing all the negatives of weak commodity prices and poor economic policies, devalued its currency on the 23 January. The peso lost 15% against the dollar and Argentina’s central bank had to step in to stem the fall by selling from its depleted currency reserves. Argentina’s currency reserves have more than halved over the last one year.
Commodity-driven economies are under pressure, as they have not diversified to other streams to lower dependence on commodity exports for revenues. Economies from Brazil to Russia are really under pressure as their economic growth has fallen sharply on the back of lower commodity prices and on the back of China, the world’s largest consumer of commodities, seeing its economic growth come off from double-digit levels to 7.7% for 2013………………………………………..Full Article: Source

IEA: Global demand for fourth quarter 2013 revised upward

Posted on 28 January 2014 by VRS  |  Email |Print

Global oil consumption during fourth-quarter 2013 was adjusted to 92.1 million b/d, according to the International Energy Agency’s most recent Oil Market Report. The total, which marks a 135,000-b/d upward revision from last month’s OMR report, was adjusted because of exceptionally strong US demand since October, partly offset by reduced Chinese fourth-quarter 2013 demand.
Global demand for 2014 is expected to rise by 1.3 million b/d to 92.5 million b/d from the 1.2 million b/d rise now envisaged for 2013, to 91.2 million b/d, “an acceleration supported by the likelihood of stronger macroeconomic momentum as the year progresses, IEA said………………………………………..Full Article: Source

China growth concerns dent commodity prices

Posted on 27 January 2014 by VRS  |  Email |Print

Oil prices endured a roller-coaster week, with an upbeat economic growth forecast for the world economy giving way to concerns over Chinese output. Commodity markets traders balanced the IMF’s global growth forecast upgrades against news that manufacturing activity in key commodity consumer China shrank in January for the first time in six months.
“Business surveys … suggest that the eurozone recovery gained momentum in January, while China’s manufacturing slowdown has continued,” noted analysts at consultancy Capital Economics………………………………………..Full Article: Source

Commodities without banks: More expensive, less reliable

Posted on 24 January 2014 by VRS  |  Email |Print

With its recent announcement that it is to quit almost all commodities trading, Deutsche Bank became just the latest bank to exit the sector. Both Morgan Stanley and JP Morgan are divesting assets, Deutsche has gone, and it remains to be seen who will remain.
The primary driving force of this rush for the exit is regulation. The days of banks being able to over-leverage their capital across numerous geographies and businesses are over. They might have ended naturally anyway – the strategy of maximising your leverage ratio did not work out too well – but regulators are pushing the pace………………………………………..Full Article: Source

Are commodity stocks poised for a rebound?

Posted on 24 January 2014 by VRS  |  Email |Print

Like a lot of investors, Ben Willis spent much of the last two years closely watching the dramatic drop in commodity prices. Since April 2011 the MSCI Commodity Producers Index, which tracks a number of global commodity companies, fell 22 percent, while metals such as copper, aluminum and nickel plummeted by more than 30 percent.
While many people have dumped their materials stocks during the free fall, this Bristol-based investment manager was waiting for the right moment to jump in. “I had to see a catalyst that would turn these stocks around,” said Willis, head of research at Whitechurch Securities Ltd………………………………………..Full Article: Source

The commodities comeback

Posted on 24 January 2014 by VRS  |  Email |Print

The annual moment of truth has arrived. Companies are publishing their numbers for the full year of 2013 and it is time for us all to “brace for a moment of particularly inconvenient truth”, says John Authers in the Financial Times.
Profits aren’t rising fast enough to justify stock-market valuations. The market soared last year – forward earnings multiples are about 16 times at the moment. That’s “well above the historical average” of more like 13 times………………………………………..Full Article: Source

Gold will continue to face pressure

Posted on 24 January 2014 by VRS  |  Email |Print

The platinum group of metals holds promise this year for investors compared to gold or silver, according to the London Bullion Merchants Association’s (LBMA) annual forecast. Over 25 analysts, taking part in a poll for the forecast, have said gold and silver will continue to face pressure, while platinum and palladium will average higher than last year.
Gold, which dropped 25 per cent last year, is seen heading lower mainly on the US Federal Reserve tapering its stimulus programme. The Fed, which has already cut the programme to boost US economy to $75 billion a month, is likely to review the stimulus at the open market committee meeting during January 28-29………………………………………..Full Article: Source

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