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Commodities Briefing - Archive | February, 2009

Nigeria could be key gas player: Oil chief

Posted on 26 February 2009 by VRS  |  Email |Print

From AFP: Nigeria could be a key player in the global gas industry if obstacles are removed, a multinational oil giant’s chief executive said Wednesday, as the west African country neared completing a deal with Russia’s Gazprom.

The west African powerhouse which has the seventh largest proven natural gas reserves in the world — 187 trillion cubic feet — taps roughly three billion cubic feet a day….. Full Article: Source

Oil chiefs urge offshore drilling

Posted on 26 February 2009 by VRS  |  Email |Print

From AP: Executives of the biggest oil companies sought to convince lawmakers Wednesday that expanded offshore drilling will produce jobs and help the nation’s economy, although new leases in areas that have been off limits would not be issued for years.

“We can help put America on the road to economic recovery,” said Larry Nichols, chairman of Devon Energy Corp., as the executives testified before the House Natural Resources Committee….. Full Article: Source

Are natural gas producers in denial?

Posted on 26 February 2009 by VRS  |  Email |Print

From While global economies continue to weaken, natural gas production appears to be growing despite soft demand and the threat of liquefied natural gas heading to the U.S. this summer without a home.

Many producers in the exploration and production space have made more than one round of spending and production cuts for 2009. Their primary concern is liquidity, while the sentiment in the oil patch is that the current downturn will be worse than previous cycles in the recent past….. Full Article: Source

Obama’s energy boost

Posted on 26 February 2009 by VRS  |  Email |Print

From MSNBC: When a politician starts talking about renewable energy and carbon caps, pollster Stan Greenberg usually sees what he calls a “glazing-over” moment - as in voters’ eyes glazing over with disinterest. But when President Obama talked about how America had to take back the lead in energy innovation, that moment didn’t come.

Instead, Democrats as well as Republicans picked up on Obama’s call for energy independence, and revved up the debate on the morning after….. Full Article: Source

China energy intensity fell 4.5 pct in 2008-official

Posted on 26 February 2009 by VRS  |  Email |Print

From Reuters: China’s energy use in generating each dollar of gross domestic product fell 4.5 percent in 2008, Liu Qi, deputy administrator of the National Energy Administration said on Thursday.

Energy intensity fell 3.66 percent in 2007 after declining only 1.79 percent in 2006, according to the National Bureau of Statistics….. Full Article: Source

Renewable energy improves

Posted on 26 February 2009 by VRS  |  Email |Print

From Renewable resources such as wind and solar will provide enough baseload electricity to meet the needs of society in the near future, said a longtime energy conservation advocate.

Roger Peters, national secretary to the board of the Canadian Renewable Energy Alliance, said new technology to harness the wind and sun will make reliance on renewable resources feasible by possibly 2020-30 and certainly by 2050….. Full Article: Source

Cap-and-Trade vs. Carbon Tax: CO2 Crowd Breaking Ranks with President?

Posted on 26 February 2009 by VRS  |  Email |Print

From In last night’s speech, President Obama remarked, “So I ask this Congress to send me legislation that places a market-based cap on carbon pollution and drives the production of more renewable energy in America.”

Today the House Committee on Ways and Means held a hearing on the scientific objectives for climate change legislation, but according to a reliable source, the hearing evolved into a debate amongst Democrats arguing on the merit of a carbon tax versus a cap-and-trade….. Full Article: Source
A SQUARE’s report on recent webinar on carbon-led investing - with voice-over (which non-A SQUARE subscribers can purchase individually) can be accessed here:

How to Raise Capital for Free (Thanks to Carbon Trading)

Posted on 26 February 2009 by VRS  |  Email |Print

From No, that headline isn’t wrong. And no, it’s not a trick to get you to read this posting (although hopefully it helps). While reporting for a recent article on Europe’s cap-and-trade carbon dioxide market, I came across an eco-financing trend that could have implications when/if the U.S. unveils its own federally-mandated emissions trading scheme.

In short, Europe’s heavy industry, such as oil refiners and steel manufacturers, has turned the Continent’s carbon market into a new source of financing to cover running costs. …. Full Article: Source

A SQUARE’s report on recent webinar on carbon-led investing - with voice-over (which non-A SQUARE subscribers can purchase individually) can be accessed here:

Carbon trading looks wobbly

Posted on 26 February 2009 by VRS  |  Email |Print

From With next year’s start for an emissions trading system affecting many food companies, agribusiness suppliers and primary producers, the past few weeks haven’t given us a clearer picture of the brave new world.

A “market” will be the main mechanism to send the signals to large greenhouse gas emitters. The financial crisis has hurt almost every form of market, and carbon trade has been swept into the vortex….. Full Article: Source

A SQUARE’s report on recent webinar on carbon-led investing - with voice-over (which non-A SQUARE subscribers can purchase individually) can be accessed here:

Indian Rupee futures take off

Posted on 26 February 2009 by VRS  |  Email |Print

From WSJ: India’s young currency futures markets are showing signs of promise, prompting some players to demand even more tools and leeway to hedge against foreign currency risk.

These constituencies argue that the central bank must permit a broader range of investors to participate in futures trading — and additional types of contracts to be traded — if India’s corporate sector is to truly prosper. There’s a growing drumbeat of support for the re-introduction of interest rate futures….. Full Article: Source

Yen off to worst start since 2000 as economy shrinks

Posted on 26 February 2009 by VRS  |  Email |Print

From Bloomberg: The yen is off to its worst start in nine years against the dollar as Japan’s tumbling exports and the fastest economic contraction since 1974 end a rally sparked by investors seeking a refuge from the financial crisis.

The currency slumped 6.4 percent against the dollar this year as global stock markets extended 2008’s losses….. Full Article: Source

Is the Yen at a turning point?

Posted on 26 February 2009 by VRS  |  Email |Print

From On January 26, when the Yen was trading around JPY88/USD, we suggested the Yen at the 80 level was like gold at $147/ounce, i.e., on a pinnacle from which the only direction was down. Commodity guru Jim Rogers describes the USD and Yen rallies as “artificial” and the result of forced liquidations (of carry trades).

UBS currency analysts in Tokyo have estimated that approximately JPY20 trillion of yen carry trades were unwound in the second half of 2008, and were a major factor in the yen’s spurt to the JPY88/USD level. …. Full Article: Source

Tokyo Grain Exchange rejects merger push, plans new products

Posted on 26 February 2009 by VRS  |  Email |Print

From Bloomberg: The Tokyo Grain Exchange, which forecasts a net loss this year, is rejecting proposals to merge with other bourses and will boost product offerings to revive profit, Chairman Yoshiaki Watanabe said.

“We can share trading systems, but we won’t combine our organizations,” Watanabe said in an interview, referring to suggestions that the TGE merge with the Tokyo Commodity Exchange, known as Tocom….. Full Article: Source

Launch of new petroleum product swap futures contracts

Posted on 26 February 2009 by VRS  |  Email |Print

From CME Group, the world’s largest and most diverse derivatives exchange, today announced 13 new petroleum product swap futures contracts, scheduled to begin trading on March 8 for trade date March 9.

These contracts are listed with, and subject to, the rules and regulations of NYMEX. The products will be available through CME ClearPort®, an open clearing system….. Full Article: Source

FMC rejects NCDEX plan to lower transaction fee

Posted on 26 February 2009 by VRS  |  Email |Print

From Following the Bombay High Court order, commodity market regulator Forward Markets Commission (FMC) heard National Commodity and Derivative Exchange of India (NCDEX) proposal to reduce transaction fee but rejected the move.

Rajeev Agarwal, Member, FMC, said after hearing NCDEX argument (post-Bombay High Court judgement), the Commission was convinced that the action of NCDEX to reduce transaction fee was neither in the interest of the exchange nor the industry as a whole….. Full Article: Source

Malaysia, Indonesia agree to strengthen commodity prices

Posted on 26 February 2009 by VRS  |  Email |Print

From Bernama: Malaysia and Indonesia have agreed to work together to strengthen commodity prices in particular palm oil and rubber amid the current sagging world prices. Malaysia and Indonesia jointly account for 85 percent of global palm oil production and 40 percent of natural rubber production.

Both countries in a joint statement released here on Wednesday said they have also agreed to take appropriate measures to ensure stable prices in particular for palm oil….. Full Article: Source

Base metals prices gain on demand hopes

Posted on 26 February 2009 by VRS  |  Email |Print

From Base metals prices saw more gains Wednesday as it looked as if demand for the metals used in construction and manufacturing could be on the rise.

May copper was up 4 cents to $1.54 per pound in New York while three-month copper added $125 to $3,410 per tonne in London….. Full Article: Source

Gold miners see growth, base metals seek rebound

Posted on 26 February 2009 by VRS  |  Email |Print

From Reuters: Soaring gold prices and rock-bottom base metals have split the mining sector into camps of haves and have-nots, with the contrast clearly evident at the BMO Capital Markets Metals and Mining conference, which wrapped up on Wednesday.

With gold prices having flirted with record highs this week and mining costs in decline, gold producers in attendance talked up expansion possibilities and tried to sell potential investors on new projects….. Full Article: Source

Mineral Councils of Australia urges continuing investment in mining ahead of recovery

Posted on 26 February 2009 by VRS  |  Email |Print

From Investment in mining projects should not be derailed or slowed in response to the current slump in demand if the global market is to avoid sharp price increases in future, a senior industry official said.

Demand for minerals will soon exceed supply, and the ability to address capacity constraints will be the new determinant of economic competitiveness, Mitch Hooke, chief executive officer of the Mineral Councils of Australia, told an industry conference. …. Full Article: Source

US copper futures end up on outside market strength

Posted on 26 February 2009 by VRS  |  Email |Print

From Reuters: U.S. copper futures closed up for the third straight session Wednesday, with follow-through momentum from a late-Tuesday rally on Wall Street and a firmer tone in crude oil helping to lift the red metal back above $1.50 a lb.

Copper for March delivery HGH9 rose 3.75 cents, or 2.5 percent, to settle at $1.5245 a lb on the New York Mercantile Exchange’s COMEX division….. Full Article: Source

Warning over record decline in sugar supply

Posted on 26 February 2009 by VRS  |  Email |Print

From FT: Global sugar production is poised for a record fall this year due to funding constraints caused by the credit crisis and structural problems in the market, Czarnikow, the sugar merchant, warned on Wednesday.

Production is forecast to fall 15.2m tonnes, or 8.9 per cent, to 155.3m tonnes in 2008-09, leading to a supply deficit of 10.4m tonnes….. Full Article: Source

Corn rises as high fertilizer costs may reduce U.S. planting

Posted on 26 February 2009 by VRS  |  Email |Print

From Bloomberg: Corn rose for the third straight day on speculation that farmers in the U.S., the world’s largest producer and exporter, will plant less this year because of high fertilizer costs.

This week, the Department of Agriculture probably will reduce its forecast for corn acreage from earlier this month, a Bloomberg survey showed. …. Full Article: Source

Oil up 6 pct as demand rises; copper, grains follow

Posted on 26 February 2009 by VRS  |  Email |Print

From Reuters: Signs of a recovery in U.S. energy demand boosted crude oil prices by 6 percent on Wednesday, helping copper and grains markets to a higher close as well.

Gold continued its losing streak, closing down for a third straight session as investors backed away from the so-called “safe haven” after rediscovering an appetite for oil and other riskier commodities. The dollar’s persistent strength [USD/] also weighed on the precious metal….. Full Article: Source

CFTC nominee promises futures reform

Posted on 25 February 2009 by VRS  |  Email |Print

From FT: Barack Obama’s choice to lead the Commodity Futures Trading Commission has vowed to tackle the kind of speculation that many blamed for last year’s sky-high oil prices and volatile swings across agricultural markets.

Gary Gensler, a former US Treasury official and partner at Goldman Sachs, has also pledged to help bring transparency to the hitherto unregulated market for credit default swaps, which many claim exacerbated the financial crisis….. Full Article: Source

Sovereign wealth funds eye move into commodities, specially oil

Posted on 25 February 2009 by VRS  |  Email |Print

From Sovereign wealth funds (SWFs) – the investment arms of cash-rich nations such as China and Qatar – are poised to raise their holdings of commodities and oil in a move that could have a huge impact on financial markets.

Sitting on up to $4tn in assets, much of it from selling oil and other raw materials, most SWFs have so far been conservative in their investment choices, holding dollars, treasuries and shares in large US and European companies….. Full Article: Source

Food crisis hits developing world farms

Posted on 25 February 2009 by VRS  |  Email |Print

From BBC: Farmers in developing countries are struggling despite recent rises in the price of commodities they produce, the Fairtrade Foundation says in a new report.

The report, which interviewed farmers’ groups in Uganda, Malawi, Nicaragua, India, Sri Lanka and the Caribbean, reveals that many families are spending up to 80% of their entire household budget on basic food items. …. Full Article: Source

Turkey’s derivatives bourse opens to US citizens

Posted on 25 February 2009 by VRS  |  Email |Print

From A recent application to the Commodity Futures Trading Commission, or CFTC, the regulatory authority that arranges futures contracts in the United States, opens way for individual US investors to trade on futures contracts in Turkey.

Turkey’s derivatives bourse opens to US citizens The path is opening for U.S. investors to put money into the Turkish Derivatives Exchange, or VOB, based in the Aegean city of İzmir. …. Full Article: Source

Go for gold. But don’t dump other commodities

Posted on 25 February 2009 by VRS  |  Email |Print

From Except gold, nobody wants to invest in any commodities now. Investors are shying away from commodities now as they badly burnt their fingers after putting their money in commodities like crude, metals and agri goods.

But, is it prudent to dump commodities altogether? That is the question haunting millions of investors across the globe….. Full Article: Source

Gold output in South Africa in 2008 fell to its lowest level since 1922

Posted on 25 February 2009 by VRS  |  Email |Print

From The Chamber of Mines said on Tuesday gold output fell 13.6% to 220,127kg in 2008 - the lowest level since the 218,031kg in 1922. The sector accounts for about 2.5% of gross domestic product in South Africa.

However, it is now the world’s number three producer behind China and the United States….. Full Article: Source

Gold falls as demand ebbs after rally to $1,000; Silver drops

Posted on 25 February 2009 by VRS  |  Email |Print

From Bloomberg: Gold fell the most in six weeks as demand ebbed following a rally last week that sent the precious metal above $1,000 an ounce. Silver also declined.

Before sliding today, gold’s seven-day relative-strength index had topped 70 since Feb. 17, a signal that prices may drop in the short term….. Full Article: Source

Gold slips amid safe haven doubts

Posted on 25 February 2009 by VRS  |  Email |Print

From FT: Gold slipped after Ben Bernanke’s testimony to Congress on Tuesday provided comfort to investors on the outlook for inflation and prospects for a recovery in the US financial system.

Gold sank towards the $960 level, falling 3 per cent to $962.50 a troy ounce and trading between a low of $958.75 and a high of $994.80. …. Full Article: Source

Silver outshines gold for investors

Posted on 25 February 2009 by VRS  |  Email |Print

From FT: So much attention has been focused on gold prices recently that the performance of the silver market has been somewhat overlooked.

But silver has comfortably outperformed gold, with prices rising 29.2 per cent this year to a high of $14.60 a troy ounce on Monday, while gold’s peak at $1,005.40 was a gain of 14.5 per cent. …. Full Article: Source

The United States Oil Fund mystery

Posted on 25 February 2009 by VRS  |  Email |Print

From FT: Olivier Jakob at Petromatrix continues his crusade against the United States Oil Fund in his Tuesday note, an issue increasingly being picked up across the commodities and investment spectrum.

Jakob’s specific case is with the distortions being caused in the WTI market on account of the ETF’s size and predictability. He notes people are already rolling positions from the front-month April contract and into May just to avoid the distortions. …. Full Article: Source

Oil prices hold steady

Posted on 25 February 2009 by VRS  |  Email |Print

From AFP: Oil prices held firm on Tuesday after losses the previous day but gains were capped by lingering demand concerns and sliding equity markets, analysts said.

Brent North Sea crude for April delivery added 30 cents to 41.27 dollars per barrel. New York’s main futures contract, light sweet crude for delivery in April, was unchanged at 38.44 dollars a barrel….. Full Article: Source

Italy takes first step to return to nuclear energy

Posted on 25 February 2009 by VRS  |  Email |Print

From AFP: Italy took the first concrete step Tuesday towards returning to nuclear energy following a 21-year ban, reaching an accord with France to build state-of-the-art reactors.

The Italian and French energy firms ENEL and EDF signed an accord for the construction in Italy of at least four European pressurised water nuclear reactors (EPRs) as part of an overall nuclear cooperation accord….. Full Article: Source

Future is bright and green in renewables energy sector

Posted on 25 February 2009 by VRS  |  Email |Print

From The good news is that renewable energy is “no longer an option” and opportunities in the sector will multiply, according to Kristen Herde, the head of human resources at E.ON Climate & Renewables. The bad news is that without vocational experience, seizing those opportunities can be difficult.

Difficult, but not insurmountable. Herde advises that those looking for careers in renewable energy should enhance their employability with internships, get some project management skills and commercial awareness, and learn a second language. …. Full Article: Source

Point Carbon sees carbon trade in 2009 seen rising 20 percent

Posted on 25 February 2009 by VRS  |  Email |Print

From The global carbon market in 2009 will grow by 20 percent over 2008 in terms of volume, predicts Norwegian energy and environmental markets research group Point Carbon.

Point Carbon forecasts that 5.9 billion tonnes (gigatonnes) of carbon dioxide equivalent (CO2e) will trade this year, compared to 4.9 gt in 2008, an increase of 20 percent, according to a recent report called: Carbon Market Analyst: Outlook for 2009….. Full Article: Source

A SQUARE’s report on recent webinar on carbon-led investing - with voice-over (which non-A SQUARE subscribers can purchase individually) can be accessed here:

Carbon trading poised to decline

Posted on 25 February 2009 by VRS  |  Email |Print

From FT: The value of the carbon trading market will drop for the first time this year as reduced industrial activity in the global economic slowdown hits volumes and prices, a research group warned on Tuesday.

The current low prices for carbon dioxide mean that the value of the market is likely to drop by nearly one-third, from €92bn ($117bn) last year to €63bn this year, according to Point Carbon, a market analysis group part-owned by financial and industrial interests….. Full Article: Source

A SQUARE’s report on recent webinar on carbon-led investing - with voice-over (which non-A SQUARE subscribers can purchase individually) can be accessed here:

Carbon trading to create vegetarian nation

Posted on 25 February 2009 by VRS  |  Email |Print

From Queensland Liberal Senator, Ian Macdonald, has told a parliamentary hearing in Canberra that he fears Australia will become “a nation of vegetarians” if the emissions trading scheme goes ahead as proposed by the Government.

While Government staff disagreed with Senator Macdonald, he continued to question whether people would be able to afford to buy meat in Australia….. Full Article: Source

A SQUARE’s report on recent webinar on carbon-led investing - with voice-over (which non-A SQUARE subscribers can purchase individually) can be accessed here:

Steel gets cold and rolled

Posted on 25 February 2009 by VRS  |  Email |Print

From Forbes: A year ago, they were among the market’s strongest, but steel stocks are suffering and have more room to tumble. The global economic recession has brought about an alarming decline in industrial production during the past several months.

With construction idling, steel producers have been acutely vulnerable to downside risks in the current market environment. Underscoring these risks is the sharp decline in the Market Vectors Steel Index exchange-traded fund….. Full Article: Source

EU steel output crashes 46% in January

Posted on 25 February 2009 by VRS  |  Email |Print

From EU steel production fell 45.9 per cent in January compared to a year earlier, as demand tumbled.

Crude steel output across the 27-nation bloc was 9.55 million tonnes, almost half the 17.65 million tonnes made in January 2008, according to figures from the World Steel Association. …. Full Article: Source

Aluminium gains despite record inventories

Posted on 25 February 2009 by VRS  |  Email |Print

From Most base metals prices were higher Tuesday on gains in US equities markets, which encouraged investors to believe that demand for copper, aluminium and other metals used in industry will rebound.

Three-month aluminium added $45 to $1,333 per tonne in London even though inventories in London Metal Exchange warehouses are up to 3.2 million tonnes, a record as stockpiles have gone up by 36 percent since the beginning of the year….. Full Article: Source

Aussie dollar plunge tipped

Posted on 25 February 2009 by VRS  |  Email |Print

From The fall in commodities prices that has sapped stock values and exacerbated the nation economic slowdown, may soon push the Aussie dollar to 58 US cents, according to an analyst.

Commodities prices, measured by the Reuters-Jefferies CRB commodities index, have collapsed 58% since their July 2002 high of 473.5 index points, which was inflated by robust growth estimates and tight supplies….. Full Article: Source

The Euro – Are there any hard currencies left?

Posted on 25 February 2009 by VRS  |  Email |Print

From With gold reaching $1,000 an ounce and posting new highs versus all currencies, are there any hard currencies left? Over the past 100 years, we have moved further and further away from the gold standard.

We see no indication for that trend to reverse; if anything, it may accelerate. As a result, we have cautioned long before this credit crisis erupted that there is no such thing as a safe asset anymore; investors may want to take a diversified approach to something as mundane as cash. …. Full Article: Source

Now, traders to get commodity rates on mobiles

Posted on 25 February 2009 by VRS  |  Email |Print

From Farmers and traders in Gujarat will soon be able to see commodity rates on their cell phones. Tata Teleservices Limited (TTSL) has tied up with Impetus Technologies to launch a unique service Mandi Bhav, through which users can get information about trading platform, weather information and expert advice in rural areas of the country.

“The application will help farmers and commodity traders get daily spot rates of commodities of their interest, which will help them to maximise their profits,” Naveen Bhasin, chief operating officer of TTSL’s Gujarat circle, told TOI on Tuesday….. Full Article: Source

Dollar direction determines commodity prices

Posted on 25 February 2009 by VRS  |  Email |Print

From Guardian: U.S. grain futures slid on Tuesday as the dollar steadied and after Wall Street plumbed 12-year lows on deepening worries over the global financial system.

Traders said the macroeconomic environment was an overriding influence on the direction of the dollar, which in turn drove commodity prices….. Full Article: Source

Chinese end losing trend in Canadian commodities

Posted on 25 February 2009 by VRS  |  Email |Print

From Agriculture led gains on Scotiabank’s monthly commodity price index, which ended its five-month losing streak in January on strong buying out of China.

“A big jump in the agriculture index — up 9.5% month over month — led the way in January,” said Patricia Mohr, Scotiabank’s commodities market specialist. Canola prices (the highest value Canadian crop) strengthened significantly in response to buying by China’s State Reserve Bureau….. Full Article: Source

Sugar rises as reduced India output may widen global deficit

Posted on 25 February 2009 by VRS  |  Email |Print

From Bloomberg: Sugar rose, halting a two-session slide, on speculation that the global production shortfall will widen as output declines in India, the world’s largest consumer of the sweetener.

Global demand may exceed output by 11.56 million metric tons in the year ending Sept. 30, up from an earlier estimate of 9.66 million tons, as production in India and China slips below earlier forecasts, analyst and broker Kingsman SA of Lausanne, Switzerland, said. …. Full Article: Source

Wheat buyers shun U.S. and European wheat

Posted on 25 February 2009 by VRS  |  Email |Print

From Guardian: U.S. grain futures fell on Tuesday, dragged down by lower share markets as concerns grew about the global economy and the banking sector.

Wall Street slumped to a 12-year low on Monday, and European stocks followed on Tuesday, as investors worried that the U.S. government would not be able to stablise the financial system, dragging down commodities across the board….. Full Article: Source

Cotton falls to 3-month low on concern consumers will buy less

Posted on 25 February 2009 by VRS  |  Email |Print

From Bloomberg: Cotton fell to a three-month low on mounting concern that the slumping global economy will erode demand for raw materials, including fiber used to make textiles and clothing.

Confidence among U.S. consumers plunged to a record in February, signaling spending will slump further as unemployment soars….. Full Article: Source

February 2009
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