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Commodities Briefing - Archive | May, 2009

Pensions pause on commodities as inflation ebbs

Posted on 29 May 2009 by VRS  |  Email |Print

From Guardian.co.uk: Pension funds that helped fuel the commodities bull run for years with out-sized allocations have done little during this year’s rally as subdued inflation made a less compelling case for them to raise their exposure.
Pensions like Calpers, America’s largest retirement plan, poured hundreds of millions of dollars into funds tracking commodity index futures and other derivatives in recent years as they diversified their investments from stocks and bonds…….Full Article: Source

Commodities rally boosts indexes

Posted on 29 May 2009 by VRS  |  Email |Print

From WSJ: Asian share markets were higher Friday with commodity stocks helped by stronger metal and oil prices and Tokyo stocks took some comfort in industrial output data.

Japan’s Nikkei 225 was up 0.2% and Australia’s S&P/ASX 200 up 0.8%. South Korea’s Kospi Composite was up 0.2%, after rising 2.2% Thursday, with New Zealand’s NZX-50 up 1.0%. U.S. stock futures were flat…….Full Article (Subscription Required) : Source

Jumping on board the commodity rally

Posted on 29 May 2009 by VRS  |  Email |Print

From Fool.co.uk: Should investors be warming to commodities or is the sector set to blow cold again? It has been a spring of market rallies, but few sectors have rallied as dramatically as commodities.

The sector took a mighty pounding last year. Global recessions typically hammer cyclically-driven stocks such as base metals, and prices collapsed by more than 60% in some cases. It didn’t help that investors feared that infrastructure-related demand from China would also plummet…….Full Article: Source

Banks boost commodity business

Posted on 29 May 2009 by VRS  |  Email |Print

From FT: The financial crisis has boosted Barclays Capital and JPMorgan’s commodities business as commercial banks benefit from their stronger credit position by gaining new clients, ­according to Greenwich Associates, the influential consultancy.

Goldman Sachs and Morgan Stanley remain the two top banks in commodities, but the Greenwich Associates’ 2009 commodities survey, a sector benchmark, shows JPMorgan and Barclays Capital have “emerged as a new tier of tough competitors”, gaining business in 2008 and early this year…….Full Article (Subscription Required) : Source

Fund money fuels rally in wheat; oil crosses $65

Posted on 29 May 2009 by VRS  |  Email |Print

From Forexyard.com: Investment funds poured money into agricultural markets on Thursday, taking U.S. wheat to four-month highs amid a broad rally in other commodities.

Gold prices hit two-month highs and silver nine-month peaks as funds also piled into precious metals to hedge against a weaker dollar…….Full Article: Source

Energy supply crunch brewing

Posted on 29 May 2009 by VRS  |  Email |Print

From Calgaryherald.com: Forget low oil prices. The worry of the moment is a spike in oil prices and how long it will take before a supply crunch sends prices soaring.

And if one subscribes to the views of former CIBC World Markets economist Jeff Rubin and University of California, San Diego economics professor James Hamilton, a spike in prices could send the world tumbling back into recessionary territory, just as it is about to climb out of it…….Full Article: Source

EPA chief: US should take lead on clean energy

Posted on 29 May 2009 by VRS  |  Email |Print

From AP: The top U.S. environment official says it’s time for the United States to shed its energy-wasting image and lead the world race for cleaner power sources instead.

After several years with a relatively low profile under President George W. Bush, the U.S. Environmental Protection Agency “is back on the job,” EPA Administrator Lisa Jackson told The Associated Press on Thursday during a trip to Paris…….Full Article: Source

Canada hedges on 2010 start for emissions rules

Posted on 29 May 2009 by VRS  |  Email |Print

From Reuters: Canada’s rules for cutting greenhouse gas emissions may not come into effect by 2010 as had been planned, Environment Minister Jim Prentice said on Thursday.

The rules may be ready by next year but the implementation timing will depend on discussions with other countries — including the United States, Canada’s largest trading partner– for economic competitiveness reasons, Prentice said…….Full Article: Source

Beware of ‘carbon cowboys’, foresters warned

Posted on 29 May 2009 by VRS  |  Email |Print

From Carbonnews.co.nz: “Carbon cowboys” with no forestry knowledge are looking to make a quick buck from carbon trading at the expense of forest owners, says Environmental Intermediaries and Trading Group founder Richard Hayes.

His comments follow revelations at a recent Ministry of Agriculture and Forestry briefing on the emissions trading scheme organised by the New Zealand Institute of Forestry, where a number of forest owners complained about bad advice received from unnamed forestry consultants…….Full Article: Source

Russia loses billions from decision delays in carbon trading

Posted on 29 May 2009 by VRS  |  Email |Print

From Rian.ru: Russia has lost out on billions of dollars in investment and carbon trading payments due to government delays in considering environmental project applications, the head of an environmental investment group said.

Under the rules of the Kyoto Protocol, Russia is able to sell unused carbon emission allowances to other countries…….Full Article: Source

Rich nations promise $100 billion per year aid to poor nations in climate fight

Posted on 29 May 2009 by VRS  |  Email |Print

From Reuters: During one of the many meetings preceding the Copenhagen round of talks scheduled to take place in December, the developed countries have tentatively agreed on a plan to collectively raise $100 billion per year in order to provide financial support to the poor and developing nations as they try to make the transition from fossil fuels to clean energy sources.

Funding for the international adaptation fund has been one of the contentious issues during the negotiations for the next climate treaty and the global recession has made it even worse with many countries showing reluctance in providing monetary support to developing and poor countries citing problems like unemployment and dropping GDP back home…….Full Article: Source

Oil surges to six-month high after OPEC sees the light

Posted on 29 May 2009 by VRS  |  Email |Print

From Telegraph.co.uk: Oil prices surged to a six-month high of $65 a barrel at one stage yesterday in New York, on recovery fever after a sharp fall in US crude inventories and bullish comments from the OPEC oil cartel.
“We are seeing a light in the end of the tunnel,” said OPEC secretary-general Abdalla El Badri following a special meeting in Vienna, citing a clear pick up in demand from China, India and the rest of Asia…….Full Article: Source

OPEC raises aim as looks to global growth

Posted on 29 May 2009 by VRS  |  Email |Print

From Guardian.co.uk: OPEC’s latest policy decision to keep output unchanged was no surprise, but the great spur to the market was its new ambition for $75 a barrel oil and confidence that would not derail economic recovery.
Saudi Arabian Oil Minister Ali al-Naimi, who displayed good humour throughout Thursday’s meeting, said the world was ready for oil at $75-$80 and that could arrive before the end of the year…….Full Article: Source

Opec bets on recovery to boost price

Posted on 29 May 2009 by VRS  |  Email |Print

From FT: The Organisation of the Petroleum Exporting Countries delivered on Thursday its most optimistic message about the global economy and the oil market since the start of the financial crisis last summer triggered a precipitous fall in prices from a record $150 a barrel to $30.

“We are beginning to see light at the end of the tunnel,” Abdalla El-Badri, Opec secretary-general, said after the cartel agreed to leave its production level unchanged, betting that the global recovery would push oil prices to $75-$80 a barrel……Full Article (Subscription Required) : Source

Bullish OPEC banks on demand bounce

Posted on 29 May 2009 by VRS  |  Email |Print

From AFP: A decision by OPEC to keep its output steady despite a glut of crude worldwide shows the oil exporter group is confident demand will pick up later this year, according to analysts.

Stocks in industrialised countries are at historic highs, covering two months of consumption, with millions of additional barrels in oil tankers at sea which have become floating storage facilities…….Full Article: Source

U.S. natural gas: A coiled spring

Posted on 29 May 2009 by VRS  |  Email |Print

From Salidacapital.com: It’s difficult to look at a chart of U.S. natural gas prices (combined with the resulting collapse in rig counts) and not be at least a little bit intrigued. To say that prices have corrected is a major understatement. Bloodbath comes to mind.
Yet, is the fundamental backdrop for gas that much worse than for crude oil, which has performed remarkably well since mid-February? Arguably not. Certainly gas continues to be a laggard — but for how long?……Full Article: Source

Gold recovers in European trade

Posted on 29 May 2009 by VRS  |  Email |Print

From Commodityonline.com: Gold prices recovered in early European trade Thursday mainly on dollar’s weakness against the euro as investors began buying it as an alternative asset.

Spot gold was seen trading at $950.35 an ounce in early European trade as against $948.10 an ounce late in New York on Wednesday…….Full Article: Source

Julius Baer sees gold ETF holdings at new record

Posted on 29 May 2009 by VRS  |  Email |Print

From Reuters: Swiss bank Julius Baer sees holdings of its gold-backed exchange-traded fund rising 106,000 ounces or 7 percent in the week to May 29, it said in a weekly statement.

The amount of gold the fund holds to back its exchange-traded securities was at a record 1.493 ounces on Wednesday. By Friday, the bank expects these holdings to have risen to 1.599 million ounces, it said…….Full Article: Source

What’s holding the Gold ETF back?

Posted on 29 May 2009 by VRS  |  Email |Print

From Seekingalpha.com: Fears about the economy have been slowly abating, yet gold exchange traded funds (ETFs) and the metal itself haven’t shown many signs of waning interest. What’s happening here?

Many analysts say that the precious metal is expected to keep trading above the $900 per ounce mark, and the prospects for the $1,000 mark are good, as inflation fears are mounting…….Full Article: Source

2009 Commodity fund performance

Posted on 29 May 2009 by VRS  |  Email |Print

From Seekingalpha.com: This is part two of a four part series this week that looks at commodity ETFs and ETNs. For the first installment that covered index-based offerings, see this item from yesterday.

Today, attention turns to energy commodities where the effects of contango earlier in the year are on vivid display as the year-to-date gains on unleveraged oil investments now range from an astonishing -4.7 percent to +19.1 percent…….Full Article: Source

How long can China keep the miners shining?

Posted on 29 May 2009 by VRS  |  Email |Print

From Dailymail.co.uk: Commodity prices have rebounded, with the price of copper up 65 per cent from its one-year low.

Ship-spotters are reporting long queues of vessels waiting to disgorge cargoes at Chinese ports. The People’s Republic imported record quantities of base metals in April…….Full Article: Source

New survey of Arctic’s mineral riches could stoke international strife

Posted on 29 May 2009 by VRS  |  Email |Print

From Guardian: The battle for the Arctic’s hidden mineral riches is likely to intensify after a survey revealing the energy reserves present beneath the ice.

A map of potential oil and gas reserves in the region, published today in Science, shows that about 30% of the world’s ­un­exploited gas and 13% of oil lie under the seas around the north pole. Billions of barrels of oil and trillions of cubic feet of gas lie within the Arctic ­circle, where, until now, permanent ice has prevented drilling…….Full Article: Source

China’s yuan may challenge mighty dollar

Posted on 29 May 2009 by VRS  |  Email |Print

From MSN: Are the Chinese finally getting serious about loosening their ties to the dollar—and even replacing the greenback with the yuan as the global economy’s reserve currency? The evidence is mounting that they are.

For the last two months, China’s leadership has been complaining about the country’s dangerous dependence on the dollar…….Full Article: Source

Investors doubtful about dollar’s upside

Posted on 29 May 2009 by VRS  |  Email |Print

From Reuters: Already armed with multiple reasons to sell dollars, investors focused on another one this week: speculation that rising long-term U.S. interest rates will force the Federal Reserve to buy more government debt.

That should encourage investors already betting against the greenback to continue selling, possibly sending it to new multi-month lows against several major currencies…….Full Article: Source

Pound falls back against dollar

Posted on 29 May 2009 by VRS  |  Email |Print

From BBC: Sterling has fallen back against the dollar after the US currency rallied in early trade and a Bank of England policymaker warned of “false dawns”.

The pound capped a rise in recent weeks by hitting $1.60 on Wednesday for the first time since November last year……Full Article: Source

Yen rises after broad slide on retail flows

Posted on 29 May 2009 by VRS  |  Email |Print

From Reuters: The yen rose on Friday, climbing from a two-week low against the dollar and a seven-week trough versus the euro hit the previous day when Japanese retail investors shifted funds to overseas assets on hopes the worst of the global recession is over.

The dollar also edged down against the euro, staying under pressure after strong U.S. durable goods data on Thursday prompted investors to trim holdings of the safe-haven currency…….Full Article: Source

Sweden to lift euro exposure, boosts crown

Posted on 29 May 2009 by VRS  |  Email |Print

From Guardian: Sweden’s debt office said on Thursday it would boost its exposure in the euro currency to cut borrowing costs, boosting a crown it considered “greatly undervalued”.
The decision, which came after the debt office received a government mandate giving it greater flexibility, meant the debt office would increase its exposure to the euro to 50 billion crowns ($6.4 billion) from 15 billion…….Full Article: Source

USE picks 10% stake in Indiabulls-MMTC commodities exchange

Posted on 29 May 2009 by VRS  |  Email |Print

From Reuters: With USE’s infusion, IMCE has achieved a closure of its entire Rs 100 Cr capital structure as per the new guidelines.

The United Stock Exchange of India (USE) has picked up a 10% stake in the Indiabulls and MMTC promoted International Multi Commodities Exchange (IMCE) for an undisclosed amount, reports The Economic Times…….Full Article: Source

DGCX total volume crosses 3 million mark

Posted on 29 May 2009 by VRS  |  Email |Print

From Menareport.com: Total volume on Dubai Gold & Commodities Exchange (DGCX) since inception crossed 3 million contracts in May, a significant milestone in the growth of the Exchange.

Valued at US$ 128 billion, the Exchange achieved a total volume of 3,076,000 lots, traded over 885 days on 18 May. Year to date volume on the exchange has reached 410,000 contracts…….Full Article: Source

Comexes cannot bank on agri-products to grow

Posted on 29 May 2009 by VRS  |  Email |Print

From Commodityonline.com: India is a pre-dominantly agriculture country and one of the reasons for re-introducing commodity futures in the country was to enable the farming community to hedge their risk in the spot market.

However, fact remains that much of the agricultural stake holders are not using the hedging platform provided by the commodity exchanges as evident from the performance of the two agri-commodity oriented exchanges, The National Commodity and Derivatives Exchange (NCDEX) and National Multi-Commodity Exchange (NMCE)…….Full Article: Source

Thomson Reuters extends news analytics to commodity and energy markets

Posted on 29 May 2009 by VRS  |  Email |Print

From Mnilive.com: Thomson Reuters today announced it has extended it machine-readable news offering to include a sentiment scoring service for the commodity and energy markets.
The enhancement was made in direct response to client demand and the global growth of event driven trading strategies within the commodities market…….Full Article: Source

Commodity volumes fall as traders turn to stocks

Posted on 29 May 2009 by VRS  |  Email |Print

From Economic Times: Bullishness in the stock market has not just attracted those who had moved away from it but also the commodity traders who have now started trading in equity.

This has had direct impact on the liquidity of commodity markets as becomes evident from the substantial decrease in the turnover of online commexes…….Full Article: Source

Commodities hit the mainstream

Posted on 28 May 2009 by VRS  |  Email |Print

From Trustnet.com: Commodities have come into the mainstream as an asset class recently with the launch of Exchange Traded Commodities (ETCs), and investors have started using these relatively new investment products to build more diversified portfolios.
A review of commodities performance over the last 10 years versus leading equity benchmarks suggests a closer look at the investment case for commodities, and how ETCs have revolutionised this rapidly expanding asset class…….Full Article: Source

Global energy demand seen up 44 pct by 2030-EIA

Posted on 28 May 2009 by VRS  |  Email |Print

From Guardian: Global energy demand is expected to soar 44 percent over the next two decades with most of the demand coming from developing countries such as China and Russia, the U.S. government’s top energy forecasting agency said on Wednesday.
The worldwide economic downturn has hit energy consumption, but an expected recovery next year could respark demand and boost prices, the Energy Information Administration said in its new forecast…….Full Article: Source

Renewables fastest growing share of energy mix-EIA

Posted on 28 May 2009 by VRS  |  Email |Print

From Reuters: Renewable energy will be the world’s fastest growing source of electricity generation over the next two decades, although it will still make up a relatively small portion of the global energy supply, the U.S. government’s top energy forecasting agency said Wednesday.

Global renewable electricity generation is set to rise by an average of 2.9 percent per year from 2006 to 2030, increasing from 19 percent of supply in 2006 to 21 percent by 2030, the Energy Information Administration said in its annual international energy outlook…….Full Article: Source

Global emissions to leap 39 percent by 2030: US

Posted on 28 May 2009 by VRS  |  Email |Print

From AFP: Global carbon dioxide emissions are set to rise 39 percent by 2030 as energy consumption surges in the developing world, notably in Asian giants China and India, the United States warned on Wednesday.

The US Energy Information Administration (EIA) said global energy demand would leap 44 percent between 2006 and 2030, fueled by a 73-percent rise in demand from non-developed countries…….Full Article: Source

U.S. climate change bill, radically bad law: John Kemp

Posted on 28 May 2009 by VRS  |  Email |Print

From Guardian: The American Clean Energy and Security Act (HR 2454) that cleared its first hurdle last week when it was approved by the Energy and Commerce Committee of the House of Representatives is a radically bad piece of legislation.
But ironically the bill’s many flaws are precisely what make it more likely to be approved…….Full Article: Source

The recession cuts emissions more than carbon trading

Posted on 28 May 2009 by VRS  |  Email |Print

From Businessinsider.com: The global market for carbon emissions trading doubled in value last year, but actual realised emissions cuts fell as the global economic slowdown dented clean energy financing, the World Bank said on Wednesday.

The market grew to $126 billion last year, up from $63 billion in 2007 and nearly 12 times the value in 2005, the World Bank said in a report at the Carbon Expo conference in Barcelona…….Full Article: Source

IAEA should play bigger role in peaceful use of nuclear energy

Posted on 28 May 2009 by VRS  |  Email |Print

From Xinhua: Belgium’s former energy minister says the International Atomic Energy Agency (IAEA) should play a bigger role in promoting the safe and peaceful use of nuclear energy worldwide.

Jean-Pol Poncelet, who is among five people competing to replace the outgoing IAEA director general Mohammed ElBaradei in November, told Xinhua in a recent interview that he believes the agency has three major tasks…….Full Article: Source

IEA seeks more oil market stability, no OPEC cuts

Posted on 28 May 2009 by VRS  |  Email |Print

From Reuters: The fragile global economy needs to be shored up by stable oil prices and not output cuts by OPEC countries, the head of the International Energy Agency Nobuo Tanaka said on Wednesday.

“For the future, we want to see more of a buffer in the (oil) market, with more spare capacity and (higher) inventory levels to… stabilize the market,” Tanaka told Reuters in an interview during his visit to Norway’s Sleipner gas field…….Full Article: Source

Oil price reaches six-month high

Posted on 28 May 2009 by VRS  |  Email |Print

From BBC: Oil prices have risen to a six-month high, above $63 a barrel, after key oil producing nation Saudi Arabia said it was optimistic about economic recovery.

Saudi oil minister Ali al-Naimi said prices would keep increasing since demand was “picking up”…….Full Article: Source

OPEC gets overexcited

Posted on 28 May 2009 by VRS  |  Email |Print

From Forbes: Organization thinks it’s time for a sharp spike in oil prices, but that could harm fragile growth. Oil prices seem to be driving in the fast lane even as economic growth remains tenuous.

Speaking during the annual ExxonMobil shareholder meeting on Wednesday, Chief Executive Rex Tillerman attributed recent strength in crude prices to market sentiment rather than actual improvement in demand…….Full Article: Source

Saudis back increase to at least $75

Posted on 28 May 2009 by VRS  |  Email |Print

From FT: The world economy has strengthened enough to weather oil prices at $75-$80 a barrel, the Saudi oil minister, Ali Naimi, said on Wednesday, suggesting that Opec no longer sees a need to support the global recovery with low oil prices.

Mr Naimi’s comments, which were echoed by other Opec officials, point to a shift in the policy of the cartel, which supplies about 40 per cent of the world’s oil and that earlier this year gave the impression it would not push prices higher too quickly…….Full Article (Subscription Required) : Source

Sec Gen says OPEC can live with $75-85 oil

Posted on 28 May 2009 by VRS  |  Email |Print

From Reuters: OPEC Secretary General Abdullah al-Badri said on Wednesday members of the producer group could live with oil prices of $75 to $85 a barrel.

In an interview with CNBC cable network, al-Badri said oil producers have trouble making investments when prices fall below $70 a barrel…….Full Article: Source

Ailing dollar sets gold on track for $1,000 mark

Posted on 28 May 2009 by VRS  |  Email |Print

From Reuters: Dollar weakness could prove a boon to gold, pushing prices to new highs for the year above $1,000, as the influence from stock markets and attitudes toward risk wane in favor of its traditional driver.

Last week’s dollar tumble saw investors look anew at its fundamentals at a time when gold-specific factors were lacking, leaving the metal to move unfettered through key resistance at $935.50 and hit 8-week highs above $960…….Full Article: Source

India gold imports to reach 15 tons

Posted on 28 May 2009 by VRS  |  Email |Print

From WSJ: India’s gold imports in May will fall by nearly 50% on year to around 15 metric tons, as high prices limit local demand, a top industry official said.

The rally in equity markets have also hit investment demand in gold, said Suresh Hundia, president of the Bombay Bullion Association…….Full Article (Subscription Required) : Source

The rising cream of the gold crop

Posted on 28 May 2009 by VRS  |  Email |Print

From Mineweb.com: By now it can be argued that the most positive defining instrument of the global appetite for risk and reward is represented by gold bullion, as also seen in gold bullion exchange traded funds (ETFs), of which the biggest by far remains the SPDR Gold Shares ETF, which currently holds physical gold bullion of just less than 36m ounces, worth USD 34.5bn.

SPDR Gold Shares, which represent a proxy holding in physical gold bullion, is trading, like gold bullion itself, just 5% below dollar price highs, seen during March 2008. By the same token, silver bullion and silver ETFs are trading roughly 25% below the price high seen for the physical precious metal, also recorded just over a year ago…….Full Article: Source

Trading strategy for gold and silver futures, commodity market outlook

Posted on 28 May 2009 by VRS  |  Email |Print

From Stockwatch.in: Precious metals ended slightly lower as investors booked profits on the back of better than expected U. S. Consumer Confidence Index data.

MCX gold also slid but the downside was capped by further depreciation in Rupee. Gold and Silver prices fell by 0.11% and 0.47% respectively on MCX…….Full Article: Source

Not all gold ETFs are created equal

Posted on 28 May 2009 by VRS  |  Email |Print

From Seekingalpha.com: It’s no secret that ETFs are rapidly attracting investor dollars away from traditional mutual funds and other investment vehicles.
Coupled with the rise of the ETF industry as a whole, an extended period of extreme financial turmoil has made gold ETFs one of the most popular investments in today’s environment. To meet the demand, a number of gold ETFs have popped up. But buyer beware - not all gold funds are the same…….Full Article: Source

Beware of Gold Exchange Trade Funds (ETFs)

Posted on 28 May 2009 by VRS  |  Email |Print

From Marketoracle.co.uk: Gold is unique among asset classes as it is the only asset class not dependent on the performance of auditors, management, corporations, financial institutions, banks, politicians and governments.
Nor should physical gold be dependent on the performance of trustees, custodians and or sub custodians…….Full Article: Source

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