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World’s commodity trading houses have their sights set on Iran thaw

Posted on 23 April 2015 by VRS  |  Email |Print

The world’s largest commodity trading houses are first in line to profit from the much expected return of Iran to global markets as Tehran and Washington enter into the final three months of nuclear talks. While the global oil industry has been seen as the biggest beneficiary of a thaw, commodities’ traders including Cargill, Glencore, Vitol, Trafigura and Louis Dreyfus Commodities have a long history in Iran, helping to export its oil and import daily basics like gasoline, wheat and rice.
The US and European sanctions, designed to stop oil and gas trading, are also limiting the traders’ ability to sell food commodities, because of banking and shipping restrictions. With a population of almost 80 million and the prospect of strong economic growth once sanctions are lifted, Iran offers one of the world’s biggest trading opportunities……………………………………Full Article: Source

Wall Street Bets on Oil Price Rally

Posted on 23 April 2015 by VRS  |  Email |Print

If the whims of speculators are anything to go by, then oil markets are poised for a rebound. Data from the Commodity Futures Trading Commission show that bullish positions on WTI have reached their highest levels in eight months. Speculators make bets on the price of crude — long or short — depending on where they think prices are heading. Not since the end of the summer in 2014 have so many investors put money on the line, betting on a price rise.
Obviously, elite investors are not always right. Few saw the bust coming. But the mounting belief that the worst is over for oil provides a bit of evidence that prices could be on the mend……………………………………Full Article: Source

The gold rush in Dubai

Posted on 23 April 2015 by VRS  |  Email |Print

Stability in gold prices combined with festivals have led to brisk gold and diamond buying across the country. Retailers said the number of customers who buy gold and diamond jewellery has increased in the recent years. “We witness a surge in sale especially during occasions such as Akshaya Tritiya and Dhantheras. Diamond jewellery, especially rings and pendants have also become increasingly popular nowadays,” said a representative of Malabar Gold.
“The sale of gold bars and coins across our outlets in the UAE have also risen considerably because people are now more aware of the benefits of gold investment. They know that in the long term they will benefit from the soaring prices,” he said……………………………………Full Article: Source

BlackRock says more commodities pain on the way for Australia

Posted on 22 April 2015 by VRS  |  Email |Print

The steep slide in commodity prices has yet to take its full toll on the Australian economy, BlackRock Australia head of fixed interest Stephen Miller says. “I am a bit more negative on the economy than most,” Miller told The Australian Financial Review.
“The reason is that the expectations of capital expenditure numbers that were released in late February were very worrying. As expected, mining investment fell off a cliff. But there was very little evidence that investment in other parts of the economy was occurring to take its place. “I think that the decline in commodity prices has yet to flow through to the economy. Just as higher commodity prices provided a massive income boost in the period up to 2013, they’re now providing a massive income contraction.”………………………………….Full Article: Source

Sluggish Oil Demand Emerges As A Potent Factor In The Peak Oil Debate

Posted on 21 April 2015 by VRS  |  Email |Print

Peak oil isn’t what it used to be. That’s not simply because the theory of global oil supply peaking has been postponed courtesy of the U.S. production rebound, it is also because a second meaning to the expression is making a return, and that’s peak demand. A fresh glimpse of demand for oil peaking came last week in the release of the April edition of Oil Market Report by the International Energy Agency.
While most interest was in oil supply, a natural focus given the glut which has depressed the price of oil, there was a more important factor in the report and that was the modest demand growth forecast from the agency…………………………………..Full Article: Source

Where will be Gold heading in the next 18 months?

Posted on 21 April 2015 by VRS  |  Email |Print

We see $1,200/ounce ($1,200/oz) gold and $17/oz silver over the next 18 months. That’s what we use to value companies. The downturn in commodity prices has led to a decline in exploration and development spending as companies have reduced spending both as a result of lower commodity prices and the reduced availability of capital.
Spending has been declining since 2012, after the gold price peaked in 2011. This is similar to what happened in 1997 through 2001; however, in 2002 global production started to decline, which coincided with a rise in the gold price starting in 2001. About the same length of time has expired since gold peaked in 2011 and exploration spending in 2012. With global mine production likely to decline in 2016 or 2017, a rally in the gold price could be on the horizon; however, the timing is uncertain…………………………………..Full Article: Source

Developing nations’ commodity dependence rising

Posted on 20 April 2015 by VRS  |  Email |Print

The exact magnitude of dependence that many developing countries have on commodities export is not well understood, but the latest edition of UNCTAD’s ‘State of commodity dependence 2014’ aims to fill this gap.
A country is considered ‘commodity dependent developing country’ (CDDC) when its commodity export revenues contribute to more than 60 per cent of its total good export earnings, according to the report. In the case of Pakistan, the report said commodity exports as a percentage of GDP remained at 2.8 per cent as compared to 2.9pc in the past……………………………………Full Article: Source

China economic stimulus may do little for commodities: Russell

Posted on 16 April 2015 by VRS  |  Email |Print

It used to be a fairly safe bet that weak Chinese growth numbers would spark government stimulus measures, thereby boosting commodity import demand and prices. While the soft first quarter gross domestic product (GDP) numbers may well result in a relaxation of monetary policy and measures to boost infrastructure spending, it’s also likely that commodity volumes and prices won’t respond much.
GDP rose 7 percent year-on-year in the first quarter, in line with forecasts but still the slowest rate in six years. But in many ways China doesn’t really look like an economy growing at 7 percent, with exports plunging in March, power generation dropping 3.7 percent, the biggest fall since 2008, and a host of other indicators pointing to sluggish growth………………………………………..Full Article: Source

What will happen to gold price after Greek exit

Posted on 16 April 2015 by VRS  |  Email |Print

New study shows Greek bond yields as proxy for euro-zone break-up risk is more reliable than the strength of the US dollar in predicting the gold price. The real possibility of a Grexit is back on the cards. And with it a resurgent gold price.
New York gold futures moved back above the $1,200 an ounce level on Wednesday on news that Greece is preparing to declare a debt default by the end of April amid stalled negotiations with its international creditors………………………………………..Full Article: Source

Are Low-Risk High-Yield Investments Real?

Posted on 16 April 2015 by VRS  |  Email |Print

The low-risk, high-yield investment—it’s the Holy Grail of finance, or perhaps more aptly, the perpetual motion machine. One that rewards its holder out of proportion to the danger of holding it. But is there indeed such a thing as a vehicle that can combine the returns of a Lotto ticket with the safety of a Series I savings bond?
As a rule, the correlation between risk and reward in the market is almost perfectly positive. Common sense or a few seconds’ rumination should show you why that’s the case, but here’s an explanation anyway. The more people desire an investment because of its expected returns, the greater the demand, and thus the higher its price goes………………………………………..Full Article: Source

Next commodity boom a generation away, says Deltec

Posted on 15 April 2015 by VRS  |  Email |Print

The next commodities boom is “a generation away” for some key raw materials, and it is the commodity economies – such as Australia – that will provide the more compelling tactical opportunities to go short as the bubble deflates.
That is the view of Atul Lele, chief investment officer at Deltec, the private bank and wealth manager, who takes a negative view toward iron ore and the industrial metals but remains favourable on agricultural commodities. Even taking a long-term view, “all commodities are expensive”, he says. Iron ore had no credible prospect of a rebound in either the short or medium term, a blow for Australia’s materials sector, he said………………………………………..Full Article: Source

World Bank says sharp slowdown in China would hurt NZ, Australia

Posted on 14 April 2015 by VRS  |  Email |Print

A sharp slowdown in China would hurt commodity exporting countries like New Zealand and Australia and spill over into Pacific Island countries, the World Bank says in its latest East Asia Pacific Update. The global institution yesterday lowered its 2015 growth forecast for China, Asia’s largest economy, to 7.1 percent from a previous estimate of 7.2 percent, and its 2016 estimate to 7 percent from 7.1 percent.
China will release its first quarter gross domestic product data tomorrow, which is expected to show the economy expanded 7 percent from a year earlier, according to a Bloomberg survey of economists. That would be the slowest pace since the first quarter of 2009………………………………………..Full Article: Source

Canada’s economy is a disaster from low oil prices

Posted on 14 April 2015 by VRS  |  Email |Print

Low oil prices are threatening the health of Canada’s oil and gas sector, which in turn, is causing turmoil in Canada’s economy as a whole. The fall in oil prices is forcing billions of dollars in spending reductions for Canada’s oil and gas industry.
In February, Royal Dutch Shell (RDSA) shelved plans for a tar sands project in Alberta that would have produced 200,000 barrels per day. Last year, Petronas put off plans to build a massive LNG export terminal on Canada’s west coast………………………………………..Full Article: Source

Who’s winning the oil battle: OPEC or the United States?

Posted on 14 April 2015 by VRS  |  Email |Print

It’s been more than four months since the Organization of Petroleum Exporting Countries put global oil prices into a virtual free-fall when it decided at its semi-annual meeting in Vienna to not cut production. That has put a tremendous amount of pressure on what’s been called the shale oil revolution in North America and in the United States in particular.
Who’s winning so far? Well, that seems like trying to read tea leaves in a barrel of crude. “I think it’s two freight trains running at each other,” said Chris Faulkner, CEO at Dallas-based Brietling Energy………………………………………..Full Article: Source

Citigroup: ‘2016 to 2020 Period Could Be Supportive for Gold’

Posted on 14 April 2015 by VRS  |  Email |Print

This year hasn’t been a banner one for gold, with the precious metal advancing just 1 percent so far, but the precious metal might fare better next year, says Citigroup analyst Jon Bergtheil. A strong dollar, low inflation and expectations of a Federal Reserve interest-rate increase later this year have put a lid on gold in 2015.
The precious metal has been trading around $1,200. “Gold is still extremely vulnerable during 2015, but the 2016 to 2020 period could be supportive for gold,” Bergtheil writes in a report obtained by MarketWatch………………………………………..Full Article: Source

Hedge funds double bullish gold price bets

Posted on 14 April 2015 by VRS  |  Email |Print

Large scale speculators in gold futures continue to add to bets on a rising price even as the metal struggles to hold onto the $1,200 an ounce level. On Monday gold for delivery in June – the most active futures contract – drifted lower from Friday’s closing price hitting a low of $1,196.35 during late morning trade in New York.
Gold has recovered 4% from its 2015 low of $1,148.20 an ounce hit mid-March but has not been able to break through $1,220 an ounce resistance, stymied by a strong dollar………………………………………..Full Article: Source

With the end of commodities prices ’super-cycle’, UN panel lowers Latin American growth forecast to 1%

Posted on 10 April 2015 by VRS  |  Email |Print

The Economic Commission for Latin America and the Caribbean (ECLAC) has revised downward its economic growth projection for the region in 2015, forecasting a 1.0% increase in the regional Gross Domestic Product (GDP), the United Nations organization said today in a press release.
This revision reflects a global environment characterized by less economic dynamism than what was expected at the end of 2014. With the exception of the United States, industrialized countries have revised their growth estimates downward, and emerging economies continue to decelerate. The region is expected to keep economic growth at around the same level as in 2014 (1.1% according to the ECLAC’s annual report Preliminary Overview of the Economies of Latin America and the Caribbean 2014)……………………………………….Full Article: Source

Where Are Gold And Silver Heading Next?

Posted on 10 April 2015 by VRS  |  Email |Print

Gold and silver rebounded off their lows in the past few weeks thanks to the U.S. dollar’s pullback, dovish sentiment regarding Fed policy, oil’s bounce, and geopolitical turmoil. In the past week, however, precious metals have softened as the dollar bounced. Where are they headed next? Let’s take a look at some charts.
Gold bounced off of its $1,140 to $1,150 support zone after the March FOMC meeting that sent dollar reeling, but has since struggled at its key psychological level at $1,200. If gold’s bounce continues, $1,300 (the January high) is the next resistance level to watch. A decisive break below the $1,140 to $1,150 support zone or above the $1,300 resistance level is necessary to confirm gold’s next major directional move………………………………………..Full Article: Source

If History Is Any Guide, Big Deals Signal the Oil Market Is Bottoming

Posted on 09 April 2015 by VRS  |  Email |Print

Oil companies have a knack for picking the bottom in crude prices, and history may be about to repeat itself. Traders and analysts are speculating that Royal Dutch Shell Plc’s takeover of BG Group Plc for $70 billion announced Wednesday may be the first in a wave of acquisitions as Big Oil seeks to drive out costs following the rout in oil.
That happening would resemble the massive deals of the late 1990s that restructured the industry. As oil slid then, BP Plc bought Amoco Corp. for $56 billion in August 1998 and Exxon took over Mobil Corp. for $80 billion in December………………………………………..Full Article: Source

Many are still betting on oil comeback in 2015

Posted on 09 April 2015 by VRS  |  Email |Print

Surprisingly, the flow of crude oil is still accelerating, much like the money going into crude oil funds. Three of the largest crude oil funds include USO, OIL, and UCO. UCO is unique due to the fact that it’s an exchange-traded fund that uses leverage, mostly in the form of derivatives, to correspond to twice (200%) the daily performance of its underlying benchmark, the Bloomberg WTI Crude Oil Sub-index.
Since the fund corresponds to 2X the daily performance rather than total performance of its underlying index, mainly day traders, hedge funds, and speculators predicting an oil rebound would invest in such a risky investment………………………………………..Full Article: Source

US tightening proves problematic for commodities

Posted on 08 April 2015 by VRS  |  Email |Print

A misguided tightening of fiscal policy in the US could see commodities and commodity funds losing some of their steam, multi-asset fund specialists have warned. Schroders multi-asset investment fund managers Alastair Baker and Patrick Brenne said there was likely to be a continued strengthening of the dollar, which could bode ill for commodity investments if it were not handled properly by policy makers.
In an analyst note from the managers, they said: “If [tightening] is associated with continued positive economic growth then both the US dollar and commodities can go up………………………………………..Full Article: Source

Decline in US sheet steel prices slowing, turnaround still unclear

Posted on 08 April 2015 by VRS  |  Email |Print

Although US flat-rolled steel price erosion is creeping to a halt, a definitive turnaround point has yet to be established, sources said Tuesday. A service center executive pegged the bulk of the hot-rolled coil market within Platts’ specifications of $450-$460/st, down slightly from last week’s range.
Buyers and mills alike are sensing the bottom is near, he said, but no one wants to be the first to commit to a large order or institute a price increase. “When we believe we’re at the bottom, we’ll go in and get some extra tons,” he said. “But we haven’t seen it yet. We need the mills to draw a line in the sand. So we’re just buying what we have to buy and nothing more.” A source with a top-tier mill agreed that mills are hesitant to raise prices until the overall market environment improves………………………………………..Full Article: Source

Oil Surges on Signs of Growing Demand

Posted on 07 April 2015 by VRS  |  Email |Print

Oil prices surged to their biggest gains in two months on signs of rising demand in both the U.S. and Asia. Light, sweet crude for May delivery rose $3, or 6.1%, to $52.14 a barrel on the New York Mercantile Exchange. It was the U.S. benchmark’s biggest day of gains since Feb. 3 and its highest settlement since Feb. 17.
Data provider Genscape Inc. reported that supplies in Cushing, Okla., a key storage hub and the delivery point for the benchmark U.S. futures contract, fell by nearly 300,000 barrels between March 31 and April 3, according to a broker………………………………………..Full Article: Source

Once Over $12 Trillion, the World’s Currency Reserves Are Now Shrinking

Posted on 07 April 2015 by VRS  |  Email |Print

The decade-long surge in foreign-currency reserves held by the world’s central banks is coming to an end. Global reserves declined to $11.6 trillion in March from a record $12.03 trillion in August 2014, halting a five-fold increase that began in 2004, according to data compiled by Bloomberg.
While the drop may be overstated because the strengthening dollar reduced the value of other reserve currencies such as the euro, it still underlines a shift after central banks — with most of them located in developing nations like China and Russia — added an average $824 billion to reserves each year over the past decade. Beyond being emblematic of the dollar’s return to its role as the world’s undisputed dominant currency, the drop in reserves has several potential implications for global markets………………………………………..Full Article: Source

China Will Keep a Lid on Most Commodities

Posted on 02 April 2015 by VRS  |  Email |Print

Looser credit conditions or fiscal stimulus may temporarily boost China’s demand for coal, copper and iron ore, but the bounce would be fleeting. Mined commodity prices are unlikely to recover from recent lows, as China’s structural economic transition diminishes the main source of global demand growth.
Falling input costs and global overcapacity have reshaped the global steel industry: Prices will be lower for longer Weak crop prices and low farmer incomes are a significant headwind for fertiliser and seed companies, but we don’t expect the breeze will be too strong……………………………………….Full Article: Source

Goldman Sachs warns that peak gold may happen in 2015

Posted on 02 April 2015 by VRS  |  Email |Print

Goldman warns that peak gold may happen in 2015. New report says there are only “20 years of known mineable reserves of gold”. Discoveries of new sources of gold production peaked in 1995 despite major bull market .
Production lags new finds in 20 year cycle – Indicates 2015 may be year of peak gold production. Production in major gold mining countries has dropped in recent years. This will provide support and should lead to higher prices in long term. For many years, we have written about ‘peak gold’ and the ramifications of the underappreciated peak gold phenomenon for the gold market………………………………………..Full Article: Source

Copper supply constraints likely to support price in 2015: Barclays

Posted on 02 April 2015 by VRS  |  Email |Print

The copper price is likely to rebound in 2015 as “critical” producers struggle to ramp up production, Barclays said in a weekly note to clients late Tuesday. The bank says it believes copper prices will increase to a $6,313/mt average for the year.
Three-month copper closed the Tuesday London Metal Exchange kerb session at $6,040/mt. There has been much talk in the market of the copper price heading toward $5,000/mt in 2015………………………………………..Full Article: Source

Basic Materials: China Will Keep a Lid on Most Commodities

Posted on 01 April 2015 by VRS  |  Email |Print

Looser credit conditions or fiscal stimulus may temporarily boost China’s demand for coal, copper, and iron ore, but the bounce would be fleeting. Mined commodity prices are unlikely to recover from recent lows, as China’s structural economic transition diminishes the main source of global demand growth.
Falling input costs and global overcapacity have reshaped the global steel industry: Prices will be lower for longer. Weak crop prices and low farmer incomes are a significant headwind for fertilizer and seed companies, but we don’t expect the breeze will be too strong………………………………………..Full Article: Source

Investors exit commodities at record rate

Posted on 01 April 2015 by VRS  |  Email |Print

Investors are bailing out of commodity funds at the fastest pace on record, and the exodus shows no signs of ending. US exchange-traded funds linked to broad baskets of raw materials saw a net outflow of $1.23bn over the first three months of the year, the most of any quarter since the securities were created in 2006, data compiled by Bloomberg show. Bank of America says ample supplies have unleashed price wars, and Goldman Sachs predicts a 20% drop for commodities already near a 13-year low.
Morgan Stanley and Société Générale also have cut forecasts for a whole range of items. Rising supplies created bear markets over the past year as drillers unlocked more oil and natural gas, copper mines expanded and farmers harvested record maize and soya bean crops. The strongest dollar in at least a decade encouraged countries with weaker currencies to export more………………………………………..Full Article: Source

What will the oil price do next?

Posted on 01 April 2015 by VRS  |  Email |Print

Air strikes in Yemen and nuclear talks with Iran are pulling the price of crude in different directions. Betting on oil is perhaps more akin to blackjack than to roulette -some skill is involved but it’s still gambling. There are simply too many unpredictable variables for the market itself to be predictable.
Nonetheless, broad political and economic developments usually mean it’s possible to make an educated guess. It’s particularly tricky to guess the price right now, however, because there are good reasons to think it could surge or tank, depending on how two political situations in the Middle East develop………………………………………..Full Article: Source

What Happens to Global Commodities Once China is No Longer the World’s Factory?

Posted on 31 March 2015 by VRS  |  Email |Print

For many decades, China was the world’s default factory. It sucked up commodities from all four corners of the globe to power its factories. These factories then go on to crank out products that developed economies far and wide loved to consume. That was the old arrangement, and that’s why China’s annual GDP growth rate was nothing short of phenomenal.
Now, the official growth rate of China has come down to earth. Of course, it hasn’t crashed or led to a shrinkage of the Chinese economy. Instead, China is now growing at a normal rate. It’s still quite impressive and definitely enviable but considering the fact that China is still a relatively less developed country compared to the United States or the United Kingdom, it’s understandable why China’s growth rate is impressive compared to these more mature economies. Expect that to continue for quite sometime………………………………………..Full Article: Source

Iran nuclear crisis: Six key points

Posted on 31 March 2015 by VRS  |  Email |Print

Over a decade of negotiations over Iran’s nuclear programme come to a head on Tuesday, the deadline for a deal. Here are some of the key points to understanding what the nuclear crisis is all about.
What happens next could have major consequences for the international community and Iran. A long-running dispute over Iran’s nuclear programme has heightened tensions between Tehran and the West, but a deal on Tuesday could bring down diplomatic barriers. Failure, though, could see the crisis turn much worse………………………………………..Full Article: Source

Fed hike, Indian demand will be key for Gold: Barclays

Posted on 24 March 2015 by VRS  |  Email |Print

A likely Fed hike and seasonal physical demand will determine the intensity for risks in store for Gold, a report by Barclays said. In Q315 gold will likely be caught between scope for disinvestment as markets look for a rate hike and seasonal physical demand materializing from India.
“Our economists now see a much lower likelihood that the committee raises rates in June given the downward revision to NAIRU which means that the Fed’s estimate of labour market slack has risen. In turn, the Fed now looks for the first rate hike to occur in September and for the target range for the federal funds rate to reach 50-75bp in December, the report said………………………………………..Full Article: Source

Next Five Years Will Bring Huge Changes To China’s Commodity Demand

Posted on 23 March 2015 by VRS  |  Email |Print

Remember the commodity super-cycle? It was pedaled by the Chinese. It made smart investors like Jim Rogers filthy rich. That story is over, as everyone now knows. And the next five years are going to bring huge changes to the country’s demand for raw materials, especially coal and oil.
China’s commodity demand is in transition, says Barclays Capital’s commodity research team led by Kevin Norrish in London. What’s taking place of China’s raw materials appetite is “a less investment driven, more consumer-led economy that is not as competitive in global manufacturing, but less polluting.”……………………………………….Full Article: Source

Oil Price Drop Hurts Spending on Business Investments

Posted on 23 March 2015 by VRS  |  Email |Print

Prospects for an uptick in business investment this year are facing a major drag: The collapse in oil prices is spurring significant cutbacks by the energy-production industry, which had been a standout in an otherwise lackluster U.S. economic expansion.
Business capital spending rose 6% last year due to gains from a broad base of U.S. industries. The drag from energy this year could cut that growth rate in half in 2015, according to economists at Goldman Sachs………………………………………..Full Article: Source

ANZ forecasts surge in gold demand and price

Posted on 23 March 2015 by VRS  |  Email |Print

More gold-related investment offerings could be on the cards for local investors given estimates that demand for the precious metal is set to double in the region over the next 15 years. ANZ commodity strategist Victor Thianpiriya told The Sunday Times: “The country is already quite advanced when it comes to such options”, but there is still “room for more”.
He added that the booming demand in Asia could see prices surge to over US$2,400 an ounce by 2030, up from its level of US$1,170 now. An ANZ report on Wednesday said that the price rise will be fuelled by long-term growth in the key consumer markets of China and India, which are already the world’s largest consumers of gold……………………………………….Full Article: Source

Is the tide turning for Precious Metals?

Posted on 23 March 2015 by VRS  |  Email |Print

Has the tide begun to turn for the precious metals, notably silver and gold? In our view the turn began last year and if pressed to pinpoint one event, it would be following the failure of the Swiss referendum when the SNB de-pegged the franc from the euro. The Swiss National Bank was frustrated with the continued depreciation of the Euro. This had as much to do with sentiment as it did with the SNB clearing seeing the Euro might be going the way of the Rentenmark.
Around this timeframe, investors received a flurry of news regarding worldwide demand for both silver and gold. This news continues to pore in, that multiple factions that are unsure of the longevity of the U.S. dollar continue to buy precious metals. For example, net silver imports into India in November, set an all-time monthly record. This would be followed by a record setting year of net silver imports, amounting to 7,063 tons………………………………………..Full Article: Source

Kuwait Says OPEC Has No Choice But to Keep Oil Production Target

Posted on 20 March 2015 by VRS  |  Email |Print

OPEC has no plans for an extraordinary meeting to discuss ways to shore up oil prices and doesn’t have a choice but to keep its crude production unchanged to maintain market share, Kuwait Oil Minister Ali Al-Omair said.
If other producers want to cut supply, “we will be very happy,” al-Omair said in Kuwait City. No “serious” requests have come from OPEC members to hold early talks so “accordingly the next meeting will be in June,” he said………………………………………..Full Article: Source

Will The Oil Markets (And Shale Producers) Capitulate Before Demand Recovers?

Posted on 19 March 2015 by VRS  |  Email |Print

Is the U.S. shale industry at a tipping point? Oil prices fell to a six-week low on Friday after the International Energy Agency warned that the U.S. may soon run out of room to store all the oil being pumped out of shale plays across the country.
As oil starts to back up, the worry is that prices could fall like a rock. But despite this grave warning, bullish oil traders are keeping their cool. They believe that the low prices will ultimately decimate the U.S. shale industry, removing a large chunk of supply from the market indefinitely, similar to what happened during the last major oil price crash 30 years ago………………………………………..Full Article: Source

Is gold finally ready to rebound?

Posted on 19 March 2015 by VRS  |  Email |Print

Analyst Jim Bianco argues that gold may have already reached its bottom. There are few more polarizing topics in the world of investing than gold. The shiny metal, which for centuries was the basis of the global monetary system, is beloved particularly by investors whose political beliefs tilt libertarian.
These are the sort of people who are convinced of the incompetence of political leaders and central banks that now run a monetary system based on floating exchange rates rather than the value of hard metals. Gold enthusiasts had their moment in the sun during the 2000s, when the combination of rising deficits and a sharply falling dollar helped give the precious metal its best stretch since the inflation-racked 1970s and 1980s………………………………………..Full Article: Source

Iran’s Nuclear Deal Could Open Oil Flood

Posted on 18 March 2015 by VRS  |  Email |Print

Iran, the U.S. and its allies are pushing ahead with talks over a nuclear deal that would change many things—perhaps none faster than the price of oil. Iranian exports in recent years have been essentially capped by Western sanctions aimed at pressuring Tehran over its nuclear ambitions.
A deal easing those sanctions could eventually translate into half a million barrels or more a day in Iranian crude heading into a currently glutted global market, analysts estimate. With global crude prices already under pressure, a deal could quickly knock them lower. U.S. oil prices slumped to a six-year low Monday on fresh signs that supplies are swamping the market………………………………………..Full Article: Source

US shale boom may be over by end of 2015 – OPEC

Posted on 18 March 2015 by VRS  |  Email |Print

OPEC is forecasting a possible decrease in US shale oil production by the end of 2015. The number of operating drilling rigs working shale deposits is likely to fall since the price of oil has more than halved since June 2014. The cartel questions the ability of US producers to withstand the dramatic collapse in oil prices and predicts that global oil supply will equal demand, it said in its monthly report published Monday.
“Tight crude producers are aware that typical oil wells in shale plays decline 60 percent annually, and that losses can only be recouped by drilling new wells,” says the report. “As drilling subsides due to high costs and a potentially sustained low oil price, a drop in production [in the US – Ed.] can be expected to follow, possibly by late 2015.”……………………………………….Full Article: Source

Oil plunges to a 6-year low. Is $30 a barrel next?

Posted on 17 March 2015 by VRS  |  Email |Print

Extremely cheap oil is back, and it may get even cheaper. Crude plunged 4% to as low as $42.85 a barrel on Monday. That’s the lowest price since March 2009 and marks the fifth consecutive day of losses. This should bring smiles to the faces of the millions of American drivers who have watched gasoline prices creep higher in recent weeks.
A month ago, people were talking about an “oil comeback.” Now that looks like just a mirage. More and more analysts predict prices of $40 or lower, at least in the near term. “I think the market almost has to have a $30-handle on it before it gets this out of its system,” said Tom Kloza, chief oil analyst at the Oil Price Information Service………………………………………..Full Article: Source

Non-Opec oil production growth to weaken in 2015

Posted on 17 March 2015 by VRS  |  Email |Print

Slower growth in non-Opec oil production is expected in 2015, but it will take some time yet to assess the full impact of lower prices on North American output, Opec said on Monday. Oil prices have halved since levels reached in mid June last year, triggering a pullback in the number of rigs drilling for oil and a slew of announcements by energy companies about spending cuts.
But the full impact on “US tight [or shale] oil and Canadian oil sands output, will become more evident in the coming months,” the oil producers’ group said in its monthly report………………………………………..Full Article: Source

Africa sets its sights beyond commodities

Posted on 16 March 2015 by VRS  |  Email |Print

The collapse of commodity prices has hit resource-dependent African countries hard, but it is forcing them towards economic diversification, presenting fresh opportunities for outside investors. The big bang in demand for raw materials, driven mostly by China, has been good for African mineral producers. Too good perhaps, as little effort was made during the boom years to lock in gains by diversifying.
Of Africa’s 54 countries, 24 rely on a select few mineral products to generate more than 75 per cent of their export earnings, according to a study by the African Development Bank (ADB). A further 20 countries that do not have much in the way of resources still managed to grow by more than 4 per cent, as regional benefits spilt across national boundaries………………………………………..Full Article: Source

OPEC Yet To ‘Taste’ Bottom Of The Barrel

Posted on 16 March 2015 by VRS  |  Email |Print

Saudi Arabia will not cut its oil production to satisfy others. The lesson is learned and others must act accordingly. Finally, Saudi Arabia has reached its conclusion and it will keep on producing more oil as long as its customers demand for oil. This time, the biggest oil exporter is determined to push for more crude oil production and lower prices until other non-OPEC producers reduce their oil production.
Last November, a meeting in Vienna witnessed total shift in Saudi oil policy in terms of giving up its traditional ‘swing’ role producer to become an integral part of the global oil policy. Countries like Russia, Brazil and other higher cost oil producers were asked to participate and reduce their production until such time that the global market can take all available crude oil or to share the burden equally………………………………………..Full Article: Source

Why Analysts Expect Oil Price To Plummet Further

Posted on 13 March 2015 by VRS  |  Email |Print

The Energy Information Administration (EIA) of the US reported oil inventory data of the country on Wednesday. EIA report showed an increase of 4.5 million barrels in crude oil supplies during the last week, taking the inventory to 448.9 million barrels.
According to the EIA, this is the ninth weekly gain and represents an 80-year high level. Compared to this time last year, crude inventories are approximately 20% higher. West Texas Intermediate (WTI) futures are the benchmark of crude oil price in the US. The physical point of its delivery is in Cushing, Oklahoma, where crude oil supply has increased by 2.3 million barrels to reach 51.5 million barrels………………………………………..Full Article: Source

China, India drive global energy needs: Ex-OPEC official

Posted on 13 March 2015 by VRS  |  Email |Print

The global energy industry has seen huge demand from two fast-growing major economies - China and India - even as consumption dropped in Europe. “These two countries have launched themselves to a high growth zone,” said Abdullah bin Hamad al-Attiyah President of the Administrative Control and Transparency Authority ( ACTA).
“Take the case of India, from a very classical agrarian-based economy with just textile exports, India has become a giant in industry, IT and many sectors,” Abdullah was quoted as saying by the Gulf Times. China and India would need huge amounts of energy to achieve their growth targets………………………………………..Full Article: Source

Did lower oil prices help the economy at all?

Posted on 12 March 2015 by VRS  |  Email |Print

The oil price plunge has been touted as a global growth elixir, but so far the impact on the economy has been subtle and it’s unclear when that will change.
“Local fuel prices have almost fully adjusted to lower crude oil prices,” Goldman Sachs said in a note last week after tracking data from 24 countries. But it expects the stimulus impact on the economy won’t be straightforward, depending on whether low prices are perceived as likely to persist and government policy responses………………………………………..Full Article: Source

How to read the changing signals from China’s metals trade: Andy Home

Posted on 12 March 2015 by VRS  |  Email |Print

China will be the key determinant of industrial metal prices this year. Nothing new there then. The country has played the starring role in the sector for many years, thanks to its stellar contribution to global demand growth for everything from aluminium to zinc.
What has changed over the last couple of years, though, is the country’s own surging output of refined metals following years of production capacity growth. In the aluminium market, for instance, what China imports from the rest of the world is far less significant for prices than what it exports………………………………………..Full Article: Source

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