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Commodities Briefing - Archive | May, 2011

Global CO2 emissions reach record high in 2010: IEA

Posted on 31 May 2011 by VRS  |  Email |Print

Fatih BirolEnergy-related carbon-dioxide (CO2) emission reached a record high in 2010, up by five% from the last record in 2008, the Paris-based International Energy Agency (IEA) said.
Emissions in 2010 are estimated to have climbed to a record 30.6 Gigatonnes (Gt). The last record in 2008 reported CO2 emission of 29.3 Gt, which followed by a dip in 2009 due to the global recession, Xinhua said quoting the energy agency……………………………………….Full Article: Source

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Food prices ‘will double by 2030′, Oxfam warns

Posted on 31 May 2011 by VRS  |  Email |Print

Barbara StockingThe prices of staple foods will more than double in 20 years unless world leaders take action to reform the global food system, Oxfam has warned. By 2030, the average cost of key crops will increase by between 120% and 180%, the charity forecasts.
Half of that increase will be caused by climate change, Oxfam predicts, in its report Growing a Better Future……………………………………….Full Article: Source

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‘Global grain demand to rise by 48pct’

Posted on 31 May 2011 by VRS  |  Email |Print

Global demand for major grains, such as maize, rice, and wheat, is projected to increase by nearly 48 per cent from 2000-2025 and by 70 per cent between 2000 and 2050, according to research presented by Mark Rosegrant, who delivered the Agric Economic Forum Keynote during the 2011 Agric Innovation Showcase held in St. Louis.
Rosegrant, Director of Environment and Production Technology at the International Food Policy Research Institute (IFPRI) added that per capita meat consumption will also increase in many developing regions of the world and it will more than double in Sub-Saharan Africa from 2000-2050, leading to a doubling of total meat consumption by 2050……………………………………….Full Article: Source

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China urged to invest vast forex reserves in agri sector abroad

Posted on 31 May 2011 by VRS  |  Email |Print

World’s largest forex reserves holder, China should use its huge foreign exchange reserves to expand investment in the agricultural sector overseas, according to a researcher with country’s Research Center For Rural Economy.
In an essay published in the state-owned Farmer’s Daily, Chen Jie said this will help to increase domestic market supply. China’s foreign exchange reserves to $3.04 trillion as of the end of March, with a substantial portion invested in U.S. Treasurys……………………………………….Full Article: Source

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Commodities flying high in April, shot down in May

Posted on 31 May 2011 by VRS  |  Email |Print

Global commodity prices are cooling down for the summer after soaring to near-record highs in April, Scotiabank says in its monthly commodity price index.
The index climbed 6.1 per cent in April, led higher by oil, gas and coking coal but jitters over a mild slowdown in Chinese growth coupled with anxiety over the impact higher energy and food prices will have on consumer spending, led to a steep but short pullback in May, Scotiabank commodities analyst Patricia Mohr said………………………………………Full Article: Source

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Commodities to rise this fall: Scotiabank

Posted on 31 May 2011 by VRS  |  Email |Print

Scotiabank predicted Monday that commodity prices will continue to trade close to current levels for the summer before heading higher after September. The bank’s Commodity Price Index soared by 6.1 per cent between March and April to a level just 13.4 per cent below its record high in July 2008. But that level likely corrected sharply in May, the bank said.
The index reached 233.6 in April. With a base of 100 in 1997, that means commodity prices are 2.3 times higher than 14 years ago……………………………………….Full Article: Source

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Bovespa stock index falls, adding to monthly decline, as commodities drop

Posted on 31 May 2011 by VRS  |  Email |Print

The Bovespa stock index fell, adding to its third monthly decline this year, as commodities dropped and a report showed lending in Brazil expanded in April, spurring speculation that policy makers haven’t done enough to curb inflation.
Tam SA dropped after Bank of America Corp. said in a research note that the shares may decline 40 percent should its planned acquisition by Lan Airlines not be approved by Chilean antitrust authorities. Petroleo Brasileiro SA and Vale SA followed crude and metal prices lower……………………………………….Full Article: Source

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Commodities bull run to continue despite setbacks: Jim Rogers

Posted on 31 May 2011 by VRS  |  Email |Print

Global commodities guru and ace investor Jim Rogers says that the ongoing commodities bull run may encounter setbacks. However, he said that the bullish run in global commodities sector will continue till 2020.
Speaking at the BIR Ferrous Division plenary meeting in Singapore, Rogers said that ‘recyclers will be very rich’ as 3bn people in the world are increasing their consumption at a time when supply of a range of commodities is under duress……………………………………….Full Article: Source

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OPEC oil output rises in May – Survey

Posted on 31 May 2011 by VRS  |  Email |Print

Opec crude oil output is expected to rise in May as extra oil from Saudi Arabia, Nigeria and Iraq counters a further decline in Libyan supply.
Any extra supply from the Organization of the Petroleum Exporting Countries is likely to be welcomed by consumer nations concerned about the impact of oil prices well above $100 a barrel on economic growth and inflation……………………………………….Full Article: Source

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Iran: ‘OPEC will help cover global supply shortage’

Posted on 31 May 2011 by VRS  |  Email |Print

The Organization of the Petroleum Exporting Countries is acting to balance the global market and will continue to do so, according to Iran’s OPEC Gov. Mohammad Ali Khatibi. “OPEC is trying to compensate part of the shortage of supply of crude and create a balance in the market and in the future OPEC will continue to do its onerous duty which is to create balance in the market,” said Khatibi.
He said he expected global oil demand to rise to 88.9 million b/d by yearend and demand for OPEC crude to rise to 29.8 million b/d by yearend from 29.7 million b/d in the first quarter……………………………………….Full Article: Source

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Germany decides to abandon nuclear power by 2022

Posted on 31 May 2011 by VRS  |  Email |Print

Germany’s coalition government agreed early Monday to shut down all the country’s nuclear power plants by 2022, the environment minister said, making it the first major industrialized nation in the last quarter century to announce plans to go nuclear-free.
The country’s seven oldest reactors already taken off the grid pending safety inspections following the catastrophe at Japan’s Fukushima nuclear power plant in March will remain offline permanently, Norbert Roettgen added. The country has 17 reactors total……………………………………….Full Article: Source

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China coal imports to double in 2015, India close behind

Posted on 31 May 2011 by VRS  |  Email |Print

Top coal consumer China should see import demand more than double in the next four years and India will be close behind as both hoover up supplies on international markets to feed rapidly growing power industries, industry executives said on Monday.
China’s thermal coal imports could rise to 200 million tonnes in 2015 from around 90 million tonnes in 2011, Neil Dhar, executive vice president of trading house Noble Group, told the Coaltrans Asia conference……………………………………….Full Article: Source

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Palladium rebounds as BMW proves catalyst for growing shortage

Posted on 31 May 2011 by VRS  |  Email |Print

Palladium’s biggest shortage in three decades means this year’s worst-performing precious metal may rebound as growth spurs record car sales and prompts Goldman Sachs Group Inc. to say the commodities bull market is intact.
The 1.6 million-ounce deficit seen by Standard Bank Plc explains why prices for the metal used in catalytic converters will rise 25 percent by Dec. 31, based on the median estimate in a Bloomberg survey of 24 analysts and traders……………………………………….Full Article: Source

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Zinc surplus to narrow as earthquake forces Japan’s smelters to cut output

Posted on 31 May 2011 by VRS  |  Email |Print

The global zinc surplus may decline after an earthquake and tsunami slashed metal output and sales by major Japanese smelters.
Toho Zinc Co., Japan’s third-biggest zinc producer, will sell 9.4 percent less this fiscal year, Kunio Yamamiya, Toho Zinc’s representative senior managing director, said in an interview. The company joins Mitsui Mining & Smelting Co., the country’s top producer, in reducing output. ………………………………………Full Article: Source

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Gold’s currency role increasing once more

Posted on 31 May 2011 by VRS  |  Email |Print

While gold is clearly a monetary asset and will, if anything, extend its influence as the only non-fiat currency (especially following developments in Europe last week), it is clear that in recent weeks it has been moving more closely in line with the rest of the commodities sector than with currencies or other financial instruments.
Correlation analysis however shows that the relationship with the $:€ rate is tightening, while that with the G6-trade-weighted rate appears to be relatively static. The price in euros, meanwhile, has been tightening its relationship with credit default instruments as concerns over European debt have intensified once more……………………………………….Full Article: Source

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Gold hedging beginning to increase again?

Posted on 31 May 2011 by VRS  |  Email |Print

One of the contributors to the low gold prices of the 1970s was substantial hedging of forward output by mining companies, either as corporate policy, or at the insistence of lending institutions who wished to protect their positions should the price fall further.
Conversely, a contributor to the rise in gold prices over the past few years has been very substantial de-hedging by, in particular, the gold majors, which has effectively soaked up some gold demand, as belief grew that the run up in the gold price had much further to go. Indeed, most gold mining companies have now reduced their gold hedge positions to zero, or close to it……………………………………….Full Article: Source

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Gold could hit $1600 by the end of this year : GFMS

Posted on 31 May 2011 by VRS  |  Email |Print

Major precious metals reserech consultant firm GFMS said Gold’s decade-long price rally could take the metal above $1,600 an ounce by the end of the year. GFMS also said world’s largest gold bar and coin consumer China could import more gold this year.
According to Philip Kalpwijk, executive chairman of GFMS, Chinese demand for gold bars and coins as private investments could push bullion imports above 400 tons in 2011……………………………………….Full Article: Source

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Jim Rogers still bullish on oil and silver

Posted on 31 May 2011 by VRS  |  Email |Print

According to prominent investor and commodities advocate, Jim Rogers, oil prices are projected to continue increasing, given the depletion of worldwide reserves. However, the expert maintains that silver is expected to drift downward, as its initial ascent was too much, too fast.
Rogers, the chairman of Rogers Holdings and Belland Interests, Inc as well as the co-founder of Quantum Fund (along with George Soros), has boldly stated that crude oil prices will undeniably rise in the next ten years because “there is no oil.”………………………………………Full Article: Source

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Indian investors bail out of silver

Posted on 31 May 2011 by VRS  |  Email |Print

Silver appears to have lost its shine for most investors in India, with many preferring to transfer funds from the white metal to the dollar and even the equities market.
Traders and analysts say that most investors are a bit skittish because of the metal’s wild price swings and are wary of global concerns that could dull its shine……………………………………….Full Article: Source

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New ETFs arrive for investing in agriculture

Posted on 31 May 2011 by VRS  |  Email |Print

Investing in agriculture became easier last week. Another exchange traded fund with a twist was launched in the sector. ETFs in the arena tend to have interesting and relevant trading symbols: MOO, COW, and CROP, for instance. The most recent entry is no exception: SOIL.
The Global X Fertilizer/Potash ETF tracks the performance of a diversified portfolio of 29 global equities that produce, distribute and sell fertilizer products……………………………………….Full Article: Source

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Eyeing rising world food demand, Global X debuts fertilizer ETF

Posted on 31 May 2011 by VRS  |  Email |Print

On Thursday, May 26, Global X launched the first exchange-traded fund that holds companies in the fertilizer and potash industries. The new fund is the latest bet by an ETF provider on rapidly rising global-food demand. In a release, Global X noted that grain yields in India are less than half of those in the United States, which largely is the result of improper fertilization.
And Global X pointed out that China and India’s rapidly growing agricultural industries alone account for more than 40% of world fertilizer use, with emerging markets in Asia and Latin America accounting for almost two thirds of global consumption of fertilizer……………………………………….Full Article: Source

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Shanghai Gold Exchange trades 6051 tons of gold in 2010

Posted on 31 May 2011 by VRS  |  Email |Print

Trade volumes in spot and forward markets in China’s largest gold bourse ,the Shanghai Gold Exchange (SGE) surged, thanks to country’s investment frenzy in the metal.
According to Wang Zhe, SGE president, total gold traded on the exchange rose 28.5 percent from a year ago to 6,051.5 tons in 2010, while the total turnover jumped 57 percent……………………………………….Full Article: Source

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Global commodity markets remain range bound

Posted on 30 May 2011 by VRS  |  Email |Print

The power or (the lack of it) of ‘sell-side research’ (undertaken typically by brokerage houses, investment banks and others who give ‘buy’, ‘sell’ or ‘hold’ calls) was briefly demonstrated in global commodity markets last week.
Early in the week Goldman Sachs and Morgan Stanley raised their forecast of Brent crude prices by the end of the year to $115 per barrel for a 3-month horizon, $120 per barrel for a 6-month horizon and $ 130per barrel for a one year horizon thereby sending a ‘buy’ signal to the market……………………………………….Full Article: Source

Shift towards hard assets: Financialisation of commodities

Posted on 30 May 2011 by VRS  |  Email |Print

Boone PickensMany investors strongly feel that if interest rates rise, gold will automatically fall. But is that going to be true?
There’s a great deal more involved in this story than just interest rates. I think that all commodities are set to rise further this year with prices peaking in 2012 or 2013 when the dollar crisis is likely to hit. The dollar has lost 50% of its value in the last 27 years against major currencies globally……………………………………….Full Article: Source

Fidelity positive on commodities despite falls

Posted on 30 May 2011 by VRS  |  Email |Print

Despite a recent significant drop in commodity prices that may be the beginning of a longer slump, Fidelity Investment Management has argued the structural case for commodities remains strong.
The recent drop was the result of growing concern about the strength of global demand, on the back of rising interest rates in emerging markets which triggered a monetary tightening cycle that would hold back developing economies, according to Fidelity investment director Tom Stevenson……………………………………….Full Article: Source

JPMorgan banks on Asia for commodity boost

Posted on 30 May 2011 by VRS  |  Email |Print

JPMorgan chase plans to expand its physical trading activity in China’s oil market, Indonesia’s coal sector and across Asian metals to cash in on what it sees as a long-term bull market, the head of the bank’s Asian commodities unit said.
Despite a sharp fall in commodities prices in the first-half of May, JPMorgan is bullish on the sector’s future prospects as developing economies consume more raw materials, said Ray Eyles, chief executive of the bank’s Asian commodities business………………………………………Full Article: Source

Glencore: Taking over the world?

Posted on 30 May 2011 by VRS  |  Email |Print

Glencore, the world’s biggest commodities trader, located about 30 kilometres outside Zurich, Switzerland, has not been a big name in the public domain, because it has been in private hands for almost 40 years.
But now it represents 2011’s biggest sharemarket listing, or IPO, and in floating on the London and Hong Kong stock exchanges, Glencore has almost instantly opened itself up to all sorts of criticism……………………………………….Full Article: Source

Glencore: is the IPO over-valued?

Posted on 30 May 2011 by VRS  |  Email |Print

When such a large scale IPO hits the market, there are some concerns as whether this is a sign of the commodity cycle peaking. The Glencore IPO is the largest since General Motors sold shares in November, and will give Glencore a value of $61 billion if priced at the midpoint of its offer range.
There are signs of market over-heating with the IPO demand having been enough to sell the shares on offer in Glencore more than twice over……………………………………….Full Article: Source

U.S. oil off highs on home sales data, OPEC

Posted on 30 May 2011 by VRS  |  Email |Print

U.S. oil prices were well off early highs on Friday after data showed U.S. home sales plunged in April, adding to the latest crop of weak economic signals, and wiping away most of the day’s early gains sparked by a weaker dollar.
Industry data showed pending sales of existing U.S. homes fell more than expected in April to hit a seven-month low, dashing hopes for a recovery in the vital housing market……………………………………….Full Article: Source

UK minister warns of oil price rise effect on global recovery

Posted on 30 May 2011 by VRS  |  Email |Print

Relations between Qatar and the UK are as strong as they have ever been, according to a visiting British government official, who praised Qatar’s efforts in brokering peace throughout the wider region and warned against the effects of a rise in the price of oil as the world emerges from a global financial crisis.
Minister of State of the Foreign and Commonwealth Office Lord David Howell called for more dialogue between Opec and consumer countries, and having worked on such discussions for some 30 years as part of his role as the former minister of state for energy, he said that the need for talks and closer ties was as pressing as ever……………………………………….Full Article: Source

We’re fueling terrorism by paying OPEC: Pickens

Posted on 30 May 2011 by VRS  |  Email |Print

U.S. dollars for OPEC oil help fund terrorists and the Taliban, T. Boone Pickens said. “I am trying to get away from the terrorists,” he said. “I think the money we pay to OPEC gets in the hands of the Taliban.”
The U.S. is sitting on top of a huge supply of natural gas, he said — so much that American companies are selling it to China and other countries. “So here we are, we’re exporting our clean-burning fuel and importing dirty oil from the enemy,” he said. “We’re gonna go down as the dumbest crowd in history that’s ever come to town.”………………………………………Full Article: Source

Rare earths in the spotlight

Posted on 30 May 2011 by VRS  |  Email |Print

When it comes to commodity investing, most of us are familiar with the different types of commodities that we can invest in. Popular choices are energy commodities, such as oil and natural gas, or the agricultural or “soft” commodities like corn, wheat and cotton.
Metals are also popular investments, and many people use gold as a type of currency in times of economic uncertainty. Another group of less recognisable metals has also joined the investment conversation – the rare earth metals (REM)……………………………………….Full Article: Source

Unbelievable: Goldman Sachs warning on rare earths surplus!

Posted on 30 May 2011 by VRS  |  Email |Print

The front page headline in the Wall St. Journal a couple of weeks ago read, “Goldman Sachs (GS) warns of surplus with rare earths(REMX), rare earths seen growing less rare.” If there was ever a case of journalistic malfeasance or in the least clumsy misinformation, this article had to be it.
To begin with the analyst may have been wrong. In my opinion the headline should have read, “Rare Earths Seen Growing Rarer-Possible Mass Buying Explosion Straight Ahead.”………………………………………Full Article: Source

China steel’s demand may rise as much 25pct by 2015, producers’ group says

Posted on 30 May 2011 by VRS  |  Email |Print

Steel demand in China, the world’s biggest consumer, may rise by as much as a quarter by 2015 compared with demand last year, according to a projection from the China Iron & Steel Association, which represents producers.
Consumption may increase between 12 percent and 25 percent from the level in 2010 to as much as 750 million metric tons in 2015, Luo Bingsheng, deputy party secretary of the association, which is known as CISA, said……………………………………….Full Article: Source

Is gold hedging starting to rise again?

Posted on 30 May 2011 by VRS  |  Email |Print

One of the contributors to the low gold prices of the 1970s was substantial hedging of forward output by mining companies, either as corporate policy, or at the insistence of lending institutions who wished to protect their positions should the price fall further.
Conversely, a contributor to the rise in gold prices over the past few years has been very substantial de-hedging by, in particular, the gold majors, which has effectively soaked up some gold demand, as belief grew that the run up in the gold price had much further to go……………………………………….Full Article: Source

Silver – why so volatile?

Posted on 30 May 2011 by VRS  |  Email |Print

Silver is the volatile precious metal. For example, a few weeks before the collapse of Lehman Brothers in September 2008, it took 51 ounces of silver to buy one ounce of gold. At the height of the market turmoil one month later, it took 84 ounces of silver to buy that same ounce. What makes silver so volatile?
The demand for silver is ”elastic” – to put it into economic terms – while the demand for gold is ”inelastic”……………………………………….Full Article: Source

Is NewGold an ETF or a more risky ETN?

Posted on 30 May 2011 by VRS  |  Email |Print

When researching last week’s column on the differences between exchange traded funds (ETFs) and exchange traded notes (ETNs), I ran into some confusion in the industry over whether Absa’s NewGold ETF is, in fact, an ETF or whether it should be classified as an ETN, particularly since Standard Bank’s commodity products are ETNs.
Clarification on this issue is important because:………………………………………Full Article: Source

Alluring but dangerous …the truth about ETFs

Posted on 30 May 2011 by VRS  |  Email |Print

They started as a cheap and easy way for investors to track stock markets. But as the range and complexity of exchange-traded funds has grown, so have the fears that some savers may be getting in over their heads.
The Financial Services Authority has voiced concerns and last month the Financial Stability Board, an international body charged with guarding against bank failures, warned that the growth in these funds could destabilise the financial system……………………………………….Full Article: Source

Funds revive agriculture bets as drought, floods hurt crops, demand grows

Posted on 30 May 2011 by VRS  |  Email |Print

Funds boosted bets on rising agricultural prices for the first time in four weeks, led by rebounds in holdings of wheat and soybeans, as extreme weather threatened to limit output as global demand increases.
Speculators raised their net-long positions in 11 U.S. farm goods by 8.9 percent to 723,658 futures and options contracts in the week ended May 24, government data compiled by Bloomberg show……………………………………….Full Article: Source

CBN, SEC, move to revive Abuja exchange

Posted on 30 May 2011 by VRS  |  Email |Print

As part of the efforts to deepen the Nigerian capital market and widen its products offerings, the Securities and Exchange Commission (SEC) and the Central Bank of Nigeria (CBN) are championing the revival of the Abuja Securities and Commodities Exchange (ASCE).
The ASCE, which was established as the Abuja Stock Exchange, was converted to a commodity exchange to facilitate trade in commodities as opposed to shares and bonds. Although it commenced operations in 2006 as a commodity exchange trading in sorghum, maize, cowpea, Soya beans, sesame seeds and millets, it has not been as active as expected……………………………………….Full Article: Source

India: FMC examines proposal to allow market makers

Posted on 30 May 2011 by VRS  |  Email |Print

Exchanges say it’ll help trade in illiquid commodities; FMC weighs pros, cons and own monitoring ability. The commodity derivatives market regulator, the Forward Markets Commission (FMC), is considering a proposal to allow market makers in commodity futures.
Market makers both buy and sell quotes, ensuring liquidity in the contract being traded. This provides an opportunity to hedgers and investors to buy or sell the commodity, as someone is always there to complete the transaction……………………………………….Full Article: Source

US going after commodities market riggers

Posted on 30 May 2011 by VRS  |  Email |Print

It is no surprise to anyone that oil and other commodities are big business; few other resources are as vital to everyone’s day-to-day life as oil. The markets and traders that are brought to the commodities markets are often deeply enmeshed in the politics therein, and use this knowledge to profit from speculation.
When a commodity such as oil goes up in price dramatically it can cause change in the value of the USD on the online forex exchange. The power of oil is all-too apparent to many who do not hesitate to manipulate the price of the substance in an effort to profit……………………………………….Full Article: Source

Yuan at record high versus dollar after Treasury report

Posted on 30 May 2011 by VRS  |  Email |Print

China’s yuan has hit a record high against the US dollar after the US Treasury department said the Chinese currency was undervalued but not manipulated.
The People’s Bank of China (PBOC) fixed the yuan’s mid-point at an all time high of 6.4856 against the US dollar on Monday……………………………………….Full Article: Source

Carbon emissions at highest levels ever

Posted on 30 May 2011 by VRS  |  Email |Print

Greenhouse gas emissions increased by a record amount last year, to the highest carbon output in history, putting hopes of holding global warming to safe levels all but out of reach, according to unpublished estimates from the International Energy Agency.
The shock rise means the goal of preventing a temperature rise of more than 2 degrees Celsius – which scientists say is the threshold for potentially “dangerous climate change” – is likely to be just “a nice Utopia”, according to Fatih Birol, chief economist of the IEA……………………………………….Full Article: Source

Global food production may be hurt as climate shifts, UN forecaster says

Posted on 27 May 2011 by VRS  |  Email |Print

Global food output may be hurt as climate change brings more extreme weather over the next decade, with China likely set for harsher droughts and North America getting heavier rain, said the World Meteorological Organization.
“Extreme events will become more intense in the future, especially the heat waves and extreme precipitations,” Omar Baddour, a division chief at the United Nations’ agency, said in a phone interview from Geneva. “That, combined with less rainfall in some regions like the Mediterranean region and China, will affect crop production and agriculture.”………………………………………Full Article: Source

US commodity fund inflows slip to $1.3bln in April-Lipper

Posted on 27 May 2011 by VRS  |  Email |Print

Monthly inflows to commodity-based products and mutual funds dipped to just $1.3 billion in April, just before commodities suffered their biggest correction since 2008, Lipper data showed on Thursday.
Net inflows to U.S.-regulated “commodity products” slid from $4.1 billion in March as investors exited some energy and broad index funds and focused on precious metals amid a rally in gold, according to the data tracking funds investing in physical commodities or derivatives, not corporate securities……………………………………….Full Article: Source

Turn off the commodities alarm bells

Posted on 27 May 2011 by VRS  |  Email |Print

As fears of a downturn in commodity prices fade, so too are fears that the Aussie’s rally is over. Only a couple of weeks ago, the world looked like a different place. The price of silver was diving 35% and a two-and-a-half year rally in most commodity prices appeared to be at an end.
The fact that the Chinese economy was slowing down, the U.S. economy was remaining weak, and central banks in many other countries were starting to raise interest rates, just reinforced the impression that as the global recovery weakened, so would demand for commodities……………………………………….Full Article: Source

G-8 says commodity rise threatens growth

Posted on 27 May 2011 by VRS  |  Email |Print

Group of Eight leaders said a strengthening global economy will pave the way to cuts in the debt built up in the recession that followed the 2008 financial crisis.
Europe vowed to fight its fiscal woes with “determination,” while President Barack Obama promised a “clear and credible” U.S. deficit-reduction strategy. Japan was allowed to put off savings measures until its economy rebounds from the March earthquake and tsunami……………………………………….Full Article: Source

The commodity bull is not lame

Posted on 27 May 2011 by VRS  |  Email |Print

After a brief respite in the last six weeks, crude oil, along with other commodities, regained their footing after declining by approximately 5 percent since April 29. The move down was precipitated by resurgent concerns regarding the debt crisis in Europe. Investors lost their appetite for risk and as a result exited most asset classes.
This flight from risk dragged down even the S& P 500 (SPY) by 3.2 percent from the highest level that the index had seen in about three years. However, flash forward to present day and a recovery appears to be on the way……………………………………….Full Article: Source

Why Asia is epicenter of oil demand growth

Posted on 27 May 2011 by VRS  |  Email |Print

A few weeks back we highlighted the strong link between GDP growth and oil consumption by showing you how oil consumption per capita has risen in selected countries as per capita incomes rise.
Specifically, we noted the potential for China’s oil consumption – already the second-largest oil consumer in the world – to catch up on a per capita basis with other Asian countries such as Taiwan and South Korea……………………………………….Full Article: Source

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