Tue, Nov 25, 2014
A A A
Welcome kbr175@gmail.com
RSS
Commodities Briefing 25.Nov 2014

Posted on 25 November 2014 by VRS |  Email |Print

The 403-page report published by the US Senate last week on Wall Street’s involvement in physical commodities is a treasure trove of information. It shows just how deeply Goldman Sachs, Morgan Stanley and JPMorgan pushed into raw materials over the past decade.
According to a special review by the Federal Reserve’s commodities team cited in the report, Goldman Sachs had ownership interests in more than 30 power stations, 84 metal warehouses, a Colombian coal mine as well as a uranium trading business………………………………….Full Article: Source

Posted on 25 November 2014 by VRS |  Email |Print

The Federal Reserve may curtail Wall Street commodity businesses after lawmakers said banks’ role in energy, power and metals markets spurred unfair trading advantages and could threaten financial stability.
At a Senate hearing Nov. 21 held by the Senate Permanent Subcommittee on Investigations, Fed Governor Daniel Tarullo said curbs under consideration include ownership limits, restricting how much revenue can be derived from commodities and requiring Wall Street firms to boost capital. He said the new rules, to be proposed early next year, could restrict banks from investing in oil tankers, coal mines and other businesses involved in physical commodities………………………………….Full Article: Source

Posted on 25 November 2014 by VRS |  Email |Print

Commodities’ performance in 2014 shows how challenging the market can be for multi-asset investors, but don’t let that put you off. For good reasons, commodities have been an unloved asset class this year, significantly underperforming both equity and fixed income markets. While the longer-term fundamentals remain weak across the broad market, the commodity sector still represents an important component of a multi-asset class portfolio, offering investors an alternative return path and the benefits of diversification.
The ‘financialisation’ of commodities over the last 15 years has brought easier access to this market. Institutional and retail investors can now participate in a broad range of product offerings, mostly commonly in Exchange Traded Commodities………………………………….Full Article: Source

Posted on 25 November 2014 by VRS |  Email |Print

Crude oil and lease condensate production in the United States exceeded 8.6 million barrels per day (bbl/d) in August, a production volume not observed since July 1986, according to EIA’s latest Petroleum Supply Monthly.
More than half of total US production was accounted for by record production from three basins in three states. Production from the Permian Basin in Texas and New Mexico accounted for 1.66 million bbl/d, while the Eagle Ford Shale in the Western Gulf Basin, also located in Texas, produced 1.57 million bbl/d. The Bakken Shale in North Dakota’s Williston Basin accounted for 1.13 million bbl/d………………………………….Full Article: Source

Posted on 25 November 2014 by VRS |  Email |Print

It’s not possible for oil to fall to $60 a barrel after OPEC meets this week to discuss output policy, Jeff Grossman, president of BRG Brokerage, said. While the chance of a big price cut is small, he said, the cartel will likely announce that it has discussed reducing production in order to stem the tide of lower prices and put a bottom on the market.
“Even with some serious tempering of weather, the market could possibly go to maybe $72 in the next four to six weeks,” Grossman told “Power Lunch.” “The most optimistic bear would have to be in agreement with that.”…………………………………Full Article: Source

Posted on 25 November 2014 by VRS |  Email |Print

What really drives the price of gold? Some say it’s a fear gauge. Others prefer to look at the demand coming from the Indian wedding season. But the silliest of all conclusions to reach is that the dollar price of gold should be determined solely by its value vis-à-vis another fiat currency.
The truth is the primary driver of gold is the intrinsic value of the dollar itself, not its value on the Dollar Index (DXY). The intrinsic value of the dollar can be determined by the level of real interest rates. Real interest rates are calculated by subtracting the rate of inflation from a country’s “risk free” sovereign yield. Right now the level of real interest rates in the U.S. is a negative 1.55%………………………………….Full Article:

Posted on 25 November 2014 by VRS |  Email |Print

Aluminium workers at the Alunorf plant in the German city of Neuss aptly call one of their production lines “the grill”. Nearby, smelters in what is one of Europe’s leading industrial clusters are fired up to 960C. To keep all this running, the aluminium industry needs to be a voracious power consumer.
But across Europe, energy costs are threatening the survival of the industry: 11 out of 24 smelters in the EU have shut since 2007. And industry chiefs have no doubt about what is strangling their business, complaining that the EU’s environmental regulations are making electricity prices prohibitive………………………………….Full Article: Source

Posted on 25 November 2014 by VRS |  Email |Print

Gold miners’ costs are mostly higher than current spot prices, increasing the likelihood of writedowns next year. Senior gold miner gold cash costs surged 226% to $707 an ounce, according to a study. Shanghai Gold Exchange deliveries last week were up 20% to 54.2 tonnes.
All over the world, gold has emotional, cultural and financial value, which supports demand across generations. Gold is fashioned into jewelry and used to manage risk in financial portfolios and protect the wealth of nations………………………………….Full Article: Source

Posted on 25 November 2014 by VRS |  Email |Print

Gold futures wavered around the break-even mark Monday, largely holding on to Friday’s gains that were sparked by central-bank news from China and Europe. Despite gold’s lackluster moves over the past several months, at least one analyst speculated that the yellow precious metal may recover to $1,400 an ounce by 2016.
December gold futures were last up 20 cents, or less than 0.1%, to $1,197.90 an ounce, while December silver edged up a penny, also less than 0.1%, to $16.41 an ounce………………………………….Full Article: Source

Posted on 25 November 2014 by VRS |  Email |Print

On Monday gold futures again flirted with the psychologically important $1,200 an ounce level, consolidating at three-week highs. In late afternoon trade on the Comex division of the New York Mercantile Exchange gold for February delivery – the most active contract – was changing hands for $1,198.80 an ounce after bouncing off resistance at $1,208.
March 2015 silver contracts gained slightly to trade at $16.50 an ounce on Monday, up just over a dollar since hitting 55-month lows November 6. Gold is now up 6% since touching a four-year low little over two weeks ago and it appears large investors are now beginning to catch up to the rally………………………………….Full Article: Source

Posted on 25 November 2014 by VRS |  Email |Print

The Melbourne based subsidiary of BHP Billiton, in their statement released today articulated that, the industrial production of copper will be highly affected by structural factors such as grade decline of the metal as well as higher strip ratios. The statement further added that, the availability of energy and water might also affect the copper production of certain mines.
According to the report released by the Wood Mackenzie Ltd, by the year 2022, 4.5 million tonnes of production of the metal might be needed in order to meet the rising demand of copper. According to the reports from Goldman Sach, the supply gap of the metal might reach up to 2 million tonnes by the year of 2018………………………………….Full Article: Source

Posted on 25 November 2014 by VRS |  Email |Print

The pricing of copper concentrate treatment and refining charges may be splintering into a three-tier system owning to the variety of ore available to the market, Citibank said in a research piece Monday. Analyst at the bank David Wilson questioned the validity of a benchmark reference price for copper raw material.
“Is there even such a thing as a ‘benchmark’? As of November 20, miners and smelters remained stuck in negotiations between $105-110. We expect the benchmark level will be set at $108. However, we believe that a three-tier market is emerging,” said Wilson………………………………….Full Article: Source

Posted on 25 November 2014 by VRS |  Email |Print

Global metals markets are becoming more difficult to regulate as manipulation takes more subtle forms and new trading platforms spring up, according to a new study. The movement of commodities trading to new hubs in Singapore, Dubai and China adds additional complications for national regulators, London-based think-tank Chatham House will say in a report set to come out next month.
“Opaque pricing mechanisms and weakly governed market platforms are vulnerable to manipulation by powerful market participants, including trading houses, major producers and financial institutions,” the report says………………………………….Full Article: Source

Posted on 25 November 2014 by VRS |  Email |Print

If you believe in buying when prices decline, you might want to think about adding commodities to your portfolio, either for the first time or enlarging your existing position.
Commodities are regarded as a single asset class but they aren’t a single market, as are stocks and bonds. Rather, each commodity’s price responds to its own unique supply and demand factors, even for those markets that are related — crude oil and gasoline, for example. While some overarching developments such as rising interest rates can affect them all, commodities by and large are independent of each other………………………………….Full Article: Source

Posted on 25 November 2014 by VRS |  Email |Print

Teucrium Trading, an exchange traded fund provider known for its commodity related investment options, announced that its crude oil and natural gas ETFs will be closed. According to a press release, the Teucrium Natural Gas Fund and Teucrium Crude Oil Fund ETF will be shuttered after the close of business on December 18, 2014 due to the current market conditions and the Funds’ respective asset size.
NAGS has $1.2 million in assets under management, with a daily average volume of about 4,550 shares. CRUD has $1.8 million in assets, with an average daily volume of about 1,650 shares………………………………….Full Article: Source

Posted on 25 November 2014 by VRS |  Email |Print

Currency wars, with their dangerous consequence, global deflation, are raging across the globe. The term “currency war,” coined by the Brazilian Finance Minister in 2010, refers to competitive devaluation – central banks employing loose money policies that push their national currencies lower in value than others.
“Currency wars mean exporting deflation,” said Shweta Singh, a senior economist with Lombard Street Research. “Cheaper currency allows countries to export at lower prices; country after country in the past few months has been trying out this strategy. But the Turkish economy seems to be holding its own.”…………………………………Full Article: Source

Posted on 25 November 2014 by VRS |  Email |Print

It may be not so easy for China to peak its greenhouse gas emission around 2030 as the country has said in a joint announcement with the US regarding climate change last week, market sources said. Economic development will be the first challenge, because China may not have similar economic levels as the developed countries had by then, He Jiankun, the former vice principal of Tsinghua University and an expert of the China Climate Change Expert Committee said on 14 November.
The other challenge will be quota prices of the national emission trading scheme (ETS), which should range from yuan (CNY) 10/tonne to CNY25/tonne, with the annual increase at about 8%, in order to maintain the impact of emission on the GDP within 1%, according to Teng Fei, a scholar of Tsinghua University………………………………….Full Article: Source

See more articles in the archive

banner
November 2014
S M T W T F S
« Oct    
 1
2345678
9101112131415
16171819202122
23242526272829
30