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Commodities Briefing - Archive | May, 2013

What cracked commodity funds?

Posted on 31 May 2013 by VRS  |  Email |Print

What happened to commodities investments this year? Fracking has drilled a hole in the sector, and the gold bugs have taken flight. It was supposed to be different. This year was to be the start of the Great Rotation, where stocks started in a big rally (that happened) and bonds were due for a drastic pruning as the Federal Reserve started raising interest rates (that didn’t).
Those inflation hedges – energy and precious metals – were supposed to start paying off as an expanding economy and years of easy money revived inflation. Again, not yet………………………………………..Full Article: Source

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Issues arising in commodity inventory finance

Posted on 31 May 2013 by VRS  |  Email |Print

The knock-on effects of the global economic crisis have influenced the financing of the commodities trading industry. Changes in the regulatory landscape in Europe and the United States have likewise influenced the manner in which finance is being provided to the sector.
One manifestation has been an increase in lending conducted through ownership and intermediation structures that interpose the financier as owner of the commodities. Such structures have the advantage that they may, depending on the accounting practices of the bank, be treated as purchases/sales for regulatory capital purposes, meaning the financing that they provide requires less capital than traditional secured loans………………………………………..Full Article: Source

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Latin America boom starts to fade

Posted on 31 May 2013 by VRS  |  Email |Print

A decadelong commodity boom in Latin America that lifted millions out of poverty is showing signs of fatigue, as fading demand in China hits consumers and corporate earnings from Bogotá to Brasilia.
The latest evidence of a regional slowdown came Wednesday, when Brazil said its economy grew just 1.9% in the first quarter compared with the year-earlier period, far below estimates for 2.4% growth………………………………………..Full Article: Source

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Rising oil prices: The Euro zone’s next big problem?

Posted on 31 May 2013 by VRS  |  Email |Print

After the banking crisis, the oil price is the next major threat to the euro zone, analysts told CNBC, arguing that prices will rise once the shale oil revolution in the United States dies down and that the weakened region could be priced out.
The longevity of the shale oil revolution in the U.S. has divided analysts, with PricewaterhouseCoopers (PwC) predicting the boom in shale oil production will shave as much as 40 percent off oil prices by 2035. Others argue that ultimately, exports from the Organization of Petroleum Exporting Countries (OPEC) drive supply and demand for the European Union (EU) and as they shrink, oil prices will rise, leaving the euro zone facing an energy supply problem………………………………………..Full Article: Source

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Global oil demand seen falling; ‘cocktail for weaker prices’

Posted on 31 May 2013 by VRS  |  Email |Print

Lower demand, rising prices and higher inventories may see a drop in oil prices in the remaining part of this year and in 2014, the Bank of America Merrill Lynch has said. The Bank of America Merrill Lynch has cut down its global oil demand growth this year due to “slightly weaker than expected consumption in Europe and China”.
In a report released yesterday BOAML said lower global oil demand, rising supplies and higher inventories are “a cocktail for lower prices”………………………………………..Full Article: Source

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Opec set to roll over oil production target

Posted on 31 May 2013 by VRS  |  Email |Print

The Opec oil cartel is set to keep its production target unchanged, betting that a seasonal rise in demand as Americans and Europeans take to their cars for summer will keep oil prices above $100 a barrel.
Opec has a long history of surprising the market with last minute changes in opinion, but delegates said on Thursday ministers had all but decided to keep its official production at 30m barrels a day – a level that has not changed in more than a year and a half………………………………………..Full Article: Source

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OPEC to meet amid Saudi-Iran frictions

Posted on 31 May 2013 by VRS  |  Email |Print

Once the symbol of oil dominance, OPEC faces new challenges as its members gather for a ministerial meeting this week on how much crude to pump. For the 12 oil ministers from countries ranging from Venezuela to Nigeria and Iran, the formal focus of Friday’s get-together is to determine production levels.
The consensus in the markets is that ministers will opt to maintain the status quo as prices for U.S. benchmark oil have traded in a narrow range a few dollars above $90 a barrel. Brent crude, the reference point for many international oil varieties, is just above the $100 mark some countries OPEC exporters consider the acceptable minimum………………………………………..Full Article: Source

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OPEC signals oil near $100 avoids any need to alter quota

Posted on 31 May 2013 by VRS  |  Email |Print

OPEC can keep its oil output ceiling as it is so long as Brent crude remains at about $100 a barrel, according to officials from some of the group’s members. “There is balance between demand and supply, and this is reflected on prices, they are stable,” Abdul Kareem al-Luaibi, oil minister for Iraq, the group’s second-largest producer, told reporters in Vienna.
“We don’t want any shock to the market, the stability of prices is important for the global economy.”……………………………………….Full Article: Source

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Iraqi plan to boost oil production sets up OPEC quota tussle

Posted on 31 May 2013 by VRS  |  Email |Print

Iraq is due to start pumping crude from two of its largest oil fields within weeks, creating a possible obstacle to future efforts by OPEC to curb supplies in the event of a drop in prices. The Gulf state plans to start production at Majnoon within days, followed by Gharraf in July and West Qurna-2 by year-end, lifting capacity by 400,000 barrels a day, Oil Minister Abdul Kareem al-Luaibi told reporters in Vienna today before an Organization of Petroleum Exporting Countries meeting tomorrow.
The nation, OPEC’s biggest producer after Saudi Arabia, currently pumps 3.125 million barrels a day, he said, without specifying output capacity………………………………………..Full Article: Source

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Think speculators cause high oil prices? Don’t bet on it

Posted on 31 May 2013 by VRS  |  Email |Print

Americans are spending more money at the pump than ever before. According to a recent estimate by the Energy Department, the average U.S. household spent nearly $3,000 on gasoline last year.
Earlier this month, the U.S. Energy Information Administration forecast that the price for regular gasoline will average $3.63 a gallon this summer — a slight decline from last summer, not far from the record levels set in 2008. Why do oil prices remain so stubbornly high?……………………………………….Full Article: Source

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China’s gold demand to slow from April surge: Association

Posted on 31 May 2013 by VRS  |  Email |Print

Gold demand in China, the world’s largest consumer after India, may slow in the second half of this year after surging in April, said Zhang Bingnan, secretary-general of the China Gold Association.
“The kind of frenzied buying in late April and early May won’t be repeated,” Zhang said. Some of the jewelry demand earmarked for festivals or weddings later this year may have been brought forward to April and May after prices fell, he said………………………………………..Full Article: Source

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Have rare earth prices bottomed out?

Posted on 31 May 2013 by VRS  |  Email |Print

Rare earth producers may have nothing but blue sky to look forward to after several months of gloomy weather, metaphorically speaking, regarding stagnant rare earth oxide (REO) prices.
A report this week by Morgan Stanley states that demand for REOs has troughed, suggesting prices could start to come back up following another 12 percent cross-the-board price decline in May………………………………………..Full Article: Source

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Credit cold = ETF pneumonia

Posted on 31 May 2013 by VRS  |  Email |Print

Corporate bond exchange-traded funds attracted investors in record numbers during the credit bull run of the past three years. They also attracted criticism for trading with more volatility than the bond markets they were designed to track. With the selloff in Treasury bonds rattling credit markets, those concerns are proving well founded.
BlackRock’s iShares iBoxx $ Investment Grade Corporate Bond Fund has delivered a one-month total return of negative 2.98%, according to Morningstar. That compares to a total return of negative 2.06% for the widely followed Barclays Investment Grade Corporate Bond Index. An index of more liquid investment grade bonds run by iShares delivered a negative 2.67% return over the same period………………………………………..Full Article: Source

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FMC might restrict number of delivery centres in agri commodities

Posted on 31 May 2013 by VRS  |  Email |Print

The Forward Markets Commission (FMC), the commodity derivatives markets regulator, is planning to restrict the number of delivery centres in agri commodities to avoid some complexities in futures trading.
“Sometimes, a large number of delivery centres create problems. Hence, we want to restrict it for which the Commission is waiting for the final recommendations of the sub-committee of the advisory committee,” said Ramesh Abhishek, chairman, FMC………………………………………..Full Article: Source

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RBI chief says cannot take soft commodity prices for granted

Posted on 31 May 2013 by VRS  |  Email |Print

Reserve Bank of India Governor Duvvuri Subbarao said on Thursday that soft global commodity prices cannot be taken for granted. He was speaking in Ahmedabad.
Oil prices fell below $102 a barrel on Thursday and were on track for a third straight month of losses amid a tepid global demand outlook and abundant supplies in the United States………………………………………..Full Article: Source

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US dollar losing hold as world’s currency

Posted on 31 May 2013 by VRS  |  Email |Print

With each year the American dollar is shrinking in percentage as the world’s currency supply. The implications could mean a serious decrease in the dollar’s influence as countries around the world look for alternatives.
When compared to other prominent world currencies, the dollar has been experiencing a 15-year low. That’s according to the International Monetary Fund. And, this indicates that more countries are willing to use other forms of currencies to do business. Experts say it’s a fault of the US banking system and the Federal Reserve………………………………………..Full Article: Source

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Cheer up, Aussies. You’re winning the currency war

Posted on 31 May 2013 by VRS  |  Email |Print

Everyone loves a weaker currency, right? There’s a currency war on, don’t you know. Well, Australians are not necessarily big fans, it turns out. The Australian dollar has been whacked of late. From the heady heights of $1.05 against its U.S. cousin last month, it made it almost as low as $0.95 earlier this week.
This is not just an Australian phenomenon, of course. The U.S. dollar has been on a tear and has ripped down any number of other currencies in its wake. Still, the Aussie has drawn its fair share of attention, and the currency has its own drags………………………………………..Full Article: Source

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UAE investors of carbon credits struggle to find buyers

Posted on 31 May 2013 by VRS  |  Email |Print

Investors have been advised to be wary of dealing in carbon credits after a local company experienced difficulty reselling them. The company touts carbon credits as a green investment and as a means of making a high profit. However, experts in the market say they can have little to no resale value.
Advanced Global Trading (AGT) claims it can resell carbon credits at more than three times the average market price………………………………………..Full Article: Source

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EU may link carbon fix to economy’s revival

Posted on 31 May 2013 by VRS  |  Email |Print

The European Union’s regulator is considering tools to link the supply of carbon permits with the bloc’s economic performance, according to Jos Delbeke, director general for climate at the European Commission.
The possibility of improving the world’s biggest emissions- trading system by equipping it with a flexibility mechanism emerged during public consultations on long-term scenarios for the market, Delbeke said. It adds to six options floated by the commission last year to strengthen the cap-and-trade program after prices slumped to all-time lows amid a record surplus of allowances exacerbated by an economic crisis………………………………………..Full Article: Source

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Clean energy for a carbon-choked world

Posted on 31 May 2013 by VRS  |  Email |Print

Hopes for a speedy transition from a carbon economy to clean energy have been dashed. Which technologies offer the best chance of turning things around? This month, the concentration of carbon dioxide in the atmosphere exceeded 400 parts per million for the first time in human history. If the trend continues, the International Energy Agency has warned, the world could warm by 6C by the end of the century.
In December 2009, the US Secretary of Energy, Steven Chu, called the world’s first Clean Energy Ministerial. The aim was to speed the transition from a carbon economy to clean energy production in the 22 countries that together produced 80% of the world’s greenhouse gases………………………………………..Full Article: Source

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Bad news for commodities as China likely to slow further

Posted on 30 May 2013 by VRS  |  Email |Print

For commodity traders, there is more bad news in store. The International Monetary Fund (IMF) has cut its forecast for China’s growth from earlier estimates of 8 per cent to 7.75 per cent for 2013. This follows weak data coming from the country. The biggest impact of a slowing China will be felt in the ‘hard commodities’ (mainly metals) markets. 
China was the reason for a major bull run in these commodities till 2007 on account of its huge requirement and spending in the run-up to the Beijing Olympics. However, a lull in spending by the country resulted in a downward slide in international prices of these hard commodities………………………………………..Full Article: Source

Has the commodities supercycle run its course?

Posted on 30 May 2013 by VRS  |  Email |Print

The commodities boom of the past decade is starting to look its age. Abundant liquidity and the perception that commodities could be a ‘store of value’ pushed prices to record levels in many markets. But today, investors are rightly becoming nervous about the likely fall-out, once the Federal Reserve starts to wind down its stimulus programs.
Markets may therefore start to reconnect with the fundamentals of supply and demand. And this could provide an unpleasant shock for unprepared investors. Oil markets provide a good example of what may be in store………………………………………..Full Article: Source

Latin America disappoints after squandering commodity boom

Posted on 30 May 2013 by VRS  |  Email |Print

Latin America is disappointing investors, economists and businesses with slower-than-forecast growth as waning commodity prices and strong currencies hit nations that failed to diversify and become more competitive.
The five biggest investment-grade markets in the region — magnets for foreign capital as rich countries stalled –expanded below projections or show signs of weakness. Mexico’s and Brazil’s gross domestic product missed estimates in a Bloomberg survey. Economists polled by Brazil’s central bank cut the country’s 2013 outlook this week for the second time in seven days, anticipating the worst three-year period in a decade………………………………………..Full Article: Source

Brazil’s growth disappoints, but commodities aren’t the whole story

Posted on 30 May 2013 by VRS  |  Email |Print

Like other big commodities producers in Latin America, Brazil’s economy grew less than expected in the first quarter, hit by falling commodities prices amid lackluster global growth. But unlike most of its neighbors in the region, Brazil’s economy is proving far less resilient to the downturn in commodities.
Why? Just a week ago, Brazilian Finance Minister Guido Mantega said the government’s “anti-cyclical” spending boosts investment and stimulates growth. He suggested Latin America’s biggest economy would expand around 3.5% this year, recovering from a 0.9% expansion last year. On Wednesday, though, he conceded that Brasilia will now have to revise downward that forecast………………………………………..Full Article: Source

India does best of BRICs as commodities decline

Posted on 30 May 2013 by VRS  |  Email |Print

India, buoyed by a decline in commodity prices and a government encouraging international investment, is claiming its place as the stock market with the least volatility and the highest return among the four prominent emerging economies that include Brazil, China and Russia.
The BSE Sensex, the benchmark for India’s $1.2 billion equity market, rose 1.9% in the 12 months ended 27 May when adjusted for price swings, the best gain in the group of emerging-market countries known as the BRICs, according to the Bloomberg Riskless Return Ranking. India’s stock volatility is the least among its peers, and has the highest risk-adjusted returns even over five years………………………………………..Full Article: Source

BofA cuts brent oil price estimates on China demand, U.S. crude

Posted on 30 May 2013 by VRS  |  Email |Print

Bank of America Corp. cut its Brent crude price estimates amid lower-than-expected fuel demand in China and Europe and rising oil production in North America.
Brent, the benchmark for more than half the world’s oil, will trade at an average $103 a barrel in the second half of this year, according to Francisco Blanch, the bank’s head of commodities research in New York, lowering the bank’s forecast from $111. The 2014 Brent estimate was cut to $105 from $112, he wrote in a report……………………………………….Full Article: Source

EU anti-trust head warns of damage of oil-price fixing

Posted on 30 May 2013 by VRS  |  Email |Print

Oil-price manipulation may have wrought “huge” damage to consumers, the EU’s anti-trust chief said yesterday as he drew comparisons with EU investigations into the rigging of bank rates.
While it is too soon to draw conclusions from the May 14 raids on Royal Dutch Shell, BP, Statoil ASA, and Platts, EU competition commissioner Joaquin Almunia said both sets of probes target price manipulation through a reporting system………………………………………..Full Article: Source

OPEC axes production monitoring committee

Posted on 30 May 2013 by VRS  |  Email |Print

OPEC has decided to ax a key committee that monitored its members’ compliance with oil production targets and made recommendations on output policy, people familiar with the matter told The Wall Street Journal Wednesday.
The Vienna-based secretariat of the Organization of the Petroleum Exporting Countries will now be responsible for monitoring members’ production levels, instead of the Ministerial Monitoring Sub-Committee, or MMSC, the people said………………………………………..Full Article: Source

Are tensions brewing within OPEC?

Posted on 30 May 2013 by VRS  |  Email |Print

The International Energy Agency now expects that the United States will account for nearly 33% of all oil production growth over the next five years. This news has been unsettling to several members of OPEC that are worried about the increase in supply outstripping the growth in demand. If this comes to fruition, which most consumers are hoping for, benchmark prices for Brent crude oil could drop below $100 per barrel.
Thanks to up and coming plays like the Bakken and the Eagle Ford, quite a few companies have been building some noticeable momentum. If their pace is maintained, OPEC countries like Algeria and Nigeria could be hit hard by price reductions while Saudi Arabia remains happy with the current production levels of the organization………………………………………..Full Article: Source

Best OPEC discipline since 2011 no proof for $100 oil

Posted on 30 May 2013 by VRS  |  Email |Print

OPEC’s best adherence to its production ceiling in 18 months is failing to buoy the outlook for crude oil prices, raising pressure on the group to pare supplies amid burgeoning U.S. output. While all but one of 20 analysts in a Bloomberg survey predict the 12-member organization will maintain its target of 30 million barrels a day at its May 31 meeting in Vienna, most say OPEC needs to conform better with the limit to keep supply from overwhelming demand.
Societe Generale SA says the necessary reduction could be “substantial.” The Centre for Global Energy Studies says prices may tumble without output curbs………………………………………..Full Article: Source

Why a uranium renaissance looks inevitable

Posted on 30 May 2013 by VRS  |  Email |Print

Casey Research’s Chief Energy Investment Strategist, Marin Katusa, whose portfolio profited nicely the last time the uranium bull broke loose a decade ago, recently interviewed a group of world-renowned energy experts to discuss the prospects for the sector that some considered doomed by the Fukushima disaster.
Anti-nuclear power sentiment has by no means evaporated, but Katusa sees clear signals that the bulls are ready to run, not least of which is the recent attack on the Somair uranium mine in Niger. Why? First, the 20-year Highly Enriched Uranium (HEU) Program agreement between the U.S. and Russia, aka “Megatons to Megawatts,” expires this year………………………………………..Full Article: Source

Gold price correction likely to continue; may touch a new bottom: Jim Rogers

Posted on 30 May 2013 by VRS  |  Email |Print

A correction in precious metals was long overdue, which I have discussed with you and others many times. Gold was up 12 years in a row, which is extremely unusual for any asset. I don’t know about any asset in history which was moving up for 12 years without a declining year. So gold was overdue for a correction.
Normally things correct 30-40% every year or two. So, the anomaly in gold was the price action for 12 years. Now hopefully we are having a long overdue and necessary correction. It may take a bit longer for gold to make a new bottom or sound bottom, and then the bull market will continue………………………………………..Full Article: Source

With gold prices down, here’s where the money is flowing

Posted on 30 May 2013 by VRS  |  Email |Print

Paper gold, controlled by Wall Street, is going down. But demand for physical gold all over the globe is going up every time that gold prices are down. That’s not the only place divergences are occurring in the global gold market. A divergence can even be seen in the difference between Wall Street speculators and commercial interests in the paper gold market.
The speculative momentum players continue piling on shorts, while commercial interests are following a path 180 degrees opposite………………………………………..Full Article: Source

Gold price target cut by 12pct, silver by 25pct

Posted on 30 May 2013 by VRS  |  Email |Print

Strategists at Bank of America Merrill Lynch, who in April removed their $2,000 target for the price of gold, cut their forecast again. The “ongoing headwinds” to the fundamentals for gold and silver are “heavily influenced by the lack of bullish macroeconomic drivers,” the strategists wrote in their latest global markets weekly note.
After the recession, non-commercial market participants initially raised their exposure to precious metals because of fears that money-printing would boost inflation, and that the Federal Reserve was debasing the US dollar………………………………………..Full Article: Source

Silver seen rallying to $25 after plunge: Technical Analysis

Posted on 30 May 2013 by VRS  |  Email |Print

Silver may climb toward $25 an ounce after prices rebounded from the lowest level since September 2010, according to technical analysis by Commerzbank AG.
Prices slumped last week to test the support area of $19.49 to $20 before rebounding in a bullish reversal, technical analyst Axel Rudolph wrote in a report dated yesterday. That support zone consists of the psychological $20 level, the May 2010 high and the December 2009 peak, he said………………………………………..Full Article: Source

What’s really happening with China’s silver demand?

Posted on 30 May 2013 by VRS  |  Email |Print

China’s demand for silver fell hard in April. But is that all there is…? Analysts at Barclays (BCS) recently noted that silver imports were down 28% in the month of April year on year.
But in an article reporting that news, the author makes it sound like demand was also off significantly for unwrought silver, for silver powder, and for jewelry manufacturing as well. Only if you take a myopic view would such assumptions be correct………………………………………..Full Article: Source

Asia gold demand to hit quarterly record, absorb ETF outflow-WGC

Posted on 30 May 2013 by VRS  |  Email |Print

Asian gold demand from this April to June will reach a quarterly record as bullion consumers in the region take possession of supply freed up by selling from exchange-traded funds (ETFs), the World Gold Council (WGC) said on Wednesday.
Gold prices fell to their lowest in more than two years at $1,321.35 an ounce in mid-April on signs of economic improvement in main markets and fears that central banks around the world could start to curtail their bullion-friendly policy measures………………………………………..Full Article: Source

Precious metals trades using ETPs pay off

Posted on 30 May 2013 by VRS  |  Email |Print

Trading precious metals against each other based on purchases and sales through exchange-traded products would have returned an annual profit of about 30 percent since 2007, according to JPMorgan Chase & Co.
The bank rates investment in the products on a weekly basis, buying the metal with the highest current holding relative to the past six months and selling the one with the lowest relative holding. The strategy, which was first calculated this month, would have been successful about 56 percent of the time since 2007, according to JPMorgan………………………………………..Full Article: Source

UK emissions fell further than other EU nations after mild 2011

Posted on 30 May 2013 by VRS  |  Email |Print

Greenhouse gas emissions dropped 7% in the UK, compared with an EU average of 3.3%, according to new data. The mild winter of 2011-12 may seem a distant memory after this year’s big chill, but the warmer temperatures helped the UK achieve a fall in greenhouse gases steeper than any other nation in the European Union.
In 2011, the latest year for which figures are available, UK emissions of climate-warming gases dropped by 7%, compared with an EU average of 3.3%, according to data released on Wednesday by the European Environment Agency (EEA)………………………………………..Full Article: Source

China steelmakers challenge Platts iron ore pricing: Commodities

Posted on 29 May 2013 by VRS  |  Email |Print

Chinese steelmakers, the world’s biggest iron ore buyers, are questioning the reliability of the main industry price index for the raw material provided by Platts, citing concerns about transparency and trading volume.
“We are skeptical because we don’t know the size of the deal samples and how they work out the indexed prices,” Wang Liqun, deputy general secretary of the China Iron & Steel Association, said in a phone interview. “If the daily price is based only on one deal a day, can you trust it?”…………………………………..Full Article: Source

China worries linger over industrial commodities

Posted on 29 May 2013 by VRS  |  Email |Print

The start of the week was generally “risk-on”, so industrial commodities fared quite well. But concerns about waning demand out of China still linger over the sector. A useful sentiment gauge is prices for steel reinforcement bar (rebar) – a product that clearly tracks construction expectations.
On Monday the October rebar futures contract in Shanghai slid to a six-month low of Rmb3,491 ($570) a metric ton, according to Bloomberg data……………………………………Full Article: Source

Jim Rogers: The commodities long term bull market continues

Posted on 29 May 2013 by VRS  |  Email |Print

Silver prices have slumped to their lowest level since September 2010 and gold prices are down 18% year-to-date leading many market observers to declare that the super-rally in commodities is over.
Jim Rogers, the legendary investor and Chairman of Rogers Holdings, says the commodities bull market continues. He calls the latest slump in prices a correction. “I still don’t see massive new supply coming into the market which will keep prices down,” he said. Rogers correctly called the commodities bull market that began in 1999 and the housing slump of 2007-2008 well before either occurred……………………………………Full Article: Source

Best OPEC discipline since 2011 no proof for $100 oil

Posted on 29 May 2013 by VRS  |  Email |Print

OPEC’s best adherence to its production ceiling in 18 months is failing to buoy the outlook for crude oil prices, raising pressure on the group to pare supplies amid burgeoning U.S. output. While all but one of 20 analysts in a Bloomberg survey predict the 12-member organization will maintain its target of 30 million barrels a day at its May 31 meeting in Vienna, most say OPEC needs to conform better with the limit to keep supply from overwhelming demand.
Societe Generale SA says the necessary reduction could be “substantial.” The Centre for Global Energy Studies says prices may tumble without output curbs……………………………………Full Article: Source

The price of oil rises to $95 a barrel on positive US economic data; pump price at $3.63

Posted on 29 May 2013 by VRS  |  Email |Print

The price of oil rose to $95 a barrel Tuesday, supported by gains on global stock markets. Benchmark oil for July delivery rose 86 cents to close at $95.01 a barrel in New York. It was the first gain for oil in five trading sessions.
Positive signs for the U.S. economy helped. U.S. home prices rose the most in seven years and consumer confidence reached a five-year high. U.S. stock markets were showing strong gains by mid-afternoon. European and Asian markets closed higher earlier……………………………………Full Article: Source

Break-even oil price bogeyman stalks gulf economies

Posted on 29 May 2013 by VRS  |  Email |Print

Gulf economies are buoyant. Despite regional trouble spots from Bahrain to Egypt to Syria, Gulf executives remain confident. But there’s one cloud peeking over the horizon that analysts and economists are starting to take note of: the rapidly rising “break-even” points of the oil producers whose revenues are driving the regional economy, including its burgeoning non-oil component.
Break even is the oil price point at which revenues from oil sales cover the cost of imports in the various Gulf countries. During the lean 1990s, when oil prices fell well below $50 per barrel, Gulf countries whittled their government budgets down to a nub and tightened their belts. An oil price between $45-$60 a barrel, depending on the country, was enough to break even……………………………………Full Article: Source

Oil probe that EU says mirrors Libor may reveal huge damage

Posted on 29 May 2013 by VRS  |  Email |Print

Oil-price manipulation may have wrought “huge” damage to consumers, the European Union’s antitrust chief said today, as he drew comparisons with EU investigations into rigging of bank rates including Libor.
While it’s too soon to draw conclusions from the May 14 raids on Royal Dutch Shell Plc (RDSA), BP Plc (BP/), Statoil ASA (STL) and Platts, EU Competition Commissioner Joaquin Almunia said both sets of probe target price manipulation through a reporting system……………………………………Full Article: Source

Trading the OPEC oil war: Gartman

Posted on 29 May 2013 by VRS  |  Email |Print

A shale boom in the United States makes a winning oil trade available closer to home, Dennis Gartman of The Gartman Letter said Tuesday. “You’re going to continue to see continued expansion,” he said on CNBC’s “Fast Money.”
Gartman added that the best plays would involve railroads and refiners as the domestic energy boom, and he said that OPEC would feel a squeeze.vv”If there were a way to sell OPEC short, I would try to find a way to sell OPEC short. I’m not sure how one does that,” he said……………………………………Full Article: Source

What? The price of gold has fallen?

Posted on 29 May 2013 by VRS  |  Email |Print

It’s time for all the guru’s, pundits, experts, Glen Beck and all the other teller of tales to stand up and face the music. All the bluster, all the endless diatribes telling the unwary public that unless they buy gold NOW, their financial future is about as stable as a Jaguar dealer in North Korea.
It’s so silly, until you get to substance of the issue-where you find that people have actually taken their advice and invested their hard earned dollars in their windbaggery……………………………………Full Article: Source

BAML forecast average 2013 gold price at $1,478/oz

Posted on 29 May 2013 by VRS  |  Email |Print

A lack of bullish macroeconomic drivers are weighing on gold and silver, prompting analysts at Bank of America Merrill Lynch Global Research to lower their 2013 average prices for gold and silver to $1,478 an ounce and $24.40 an ounce, respectively.
In a report, the analysts say a stronger U.S. dollar and no inflation are “headwinds” for gold and silver. Still, they add, there are pockets of demand which are preventing a “complete meltdown.” Even though gold prices are weaker, they say the gold bull market is just pausing……………………………………Full Article: Source

Hedge fund boss Baha sees gold at $3,000-$5,000

Posted on 29 May 2013 by VRS  |  Email |Print

Christian Baha, the head of Austrian fund firm Superfund and representative of the hedge fund industry in Oliver Stone movie Wall Street 2: Money Never Sleeps, is predicting that the gold price could rise to between $3,000 and $5,000 over the next five to 10 years.
Baha, who says he has more than half his personal wealth in gold and silver, either physically or in units in Superfund funds denominated in the precious metals, believes that an unprecedented phase of quantitative easing by central banks is driving a bubble in government bonds, but that gold offers real value……………………………………Full Article: Source

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