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Commodities Briefing - Archive | July, 2013

U.S. deepens scrutiny of banks’ roles in commodities

Posted on 31 July 2013 by VRS  |  Email |Print

Wall Street banks face the prospect of increased scrutiny of their commodity businesses as U.S. regulators and lawmakers on Tuesday pressed for a closer look at their roles in owning warehouses and in trading everything from oil to metals
Under pressure from a handful of lawmakers to explain why banks including JPMorgan Chase & Co. and Goldman Sachs have been allowed to own warehouses and trade physical commodities, regulators have scrambled this month to demonstrate that they are tackling the issue………………………………………..Full Article: Source

Senate panel opens probe of banks’ commodities businesses

Posted on 31 July 2013 by VRS  |  Email |Print

A U.S. Senate panel known for hard-hitting investigations of Wall Street and financial markets has launched a preliminary examination into potential conflicts of interest posed by banks’ role in physical commodity markets, according to people familiar with the matter.
The U.S. Senate Permanent Subcommittee on Investigations, led by Sen. Carl Levin (D.,Mich.), has sent information requests in recent months to banking giants J.P. Morgan Chase & Co., Goldman Sachs Group Inc. and Morgan Stanley, as well as their primary regulator, the Federal Reserve, one of the sources said………………………………………..Full Article: Source

Challenging a long-held assumption about commodities

Posted on 31 July 2013 by VRS  |  Email |Print

There’s no denying China’s massive economic growth over the past decade, as the country recorded an average GDP of more than 10 percent per year. In only seven years, China’s economy doubled; in 13 years, it tripled.
With this incredible expansion, China began to import commodities at an incredible pace. In 2000, the country imported only 70 million tons of iron ore; today, it’s more than 10 times that amount, at 763 million tons. Copper imports increased dramatically too, growing from 1.6 million tons in 2000 to more than 4 million tons per year today, according to BCA Research data………………………………………..Full Article: Source

Commodities are different (in a “full world”)

Posted on 31 July 2013 by VRS  |  Email |Print

JPMorgan has announced that it plans to exit the physical commodities businesses, while remaining committed to its historic roots in commodity financing and risk management, and to the precious metals business. Is this Jamie Dimon recognizing an unstoppable paradigm shift now taking place in the financial sector as policymakers finally find the political will to reign in the power of too big to fail banks?
This announcement comes in the wake of market manipulation accusations by the Federal Energy Regulatory Commission against Wall Street commodity dealers, including Barclays, which was ordered to pay a $487.9 million fine, and JPMorgan, where a $500 million settlement is rumored. Barclays denies wrong-doing and said it would fight the penalties………………………………………..Full Article: Source

What happens to oil markets if Iraq collapses?

Posted on 31 July 2013 by VRS  |  Email |Print

Oil production from Iraq may be in decline along with political stability in the country. The government aims to produce 9 million barrels of oil per day by the end of the decade. A weekend attack on an oil pipeline to Turkey, however, highlights some of the export restrictions that are keeping investors at bay.
Iraq’s oil production increased exponentially between 2010 and 2012. Without the external support keeping the country’s economic and political systems in check, however, the country may collapse under the weight of both domestic and regional pressures………………………………………..Full Article: Source

Oil prices slip to $103 per barrel ahead of Federal Reserve meeting, US jobs data

Posted on 31 July 2013 by VRS  |  Email |Print

The price of oil closed at a four-week low Tuesday as traders awaited comments from the U.S. central bank as well as data releases later in the week, including U.S. jobs figures.
Benchmark oil for September delivery fell $1.47 to finish at $103.08 per barrel on the New York Mercantile Exchange. That’s the lowest closing price since July 3. Brent crude, the benchmark for international crudes, fell 54 cents to end at $106.91 on the ICE Futures exchange in London………………………………………..Full Article: Source

OPEC fast facts

Posted on 31 July 2013 by VRS  |  Email |Print

The purpose of OPEC for members is to “co-ordinate and unify their petroleum policies in order to promote harmony and stability in the oil market.” OPEC members collectively supply about 40% of the world’s oil supply.
Together, OPEC members control about 75% of the world’s total proven crude reserves. OPEC member countries monitor the market and decide collectively to raise or lower oil production in order to maintain stable prices and supply………………………………………..Full Article: Source

OPEC oil export revenue hits $982bln

Posted on 31 July 2013 by VRS  |  Email |Print

Members of the Organisation of Petroleum Exporting Countries (OPEC), excluding Iran, recorded about $982 billion, or five per cent increase in net oil export revenue in 2012, according to recent estimates of the United States Energy Information Administration (EIA).
The Western energy watchdog noted that the amount was estimated to be the largest level over the 1975—2012 period. In its newly-released revenue fact sheet, the EIA estimated that Saudi Arabia earned the largest share of these earnings, $311 billion in 2012, or approximately 32 per cent of total OPEC revenues………………………………………..Full Article: Source

The hidden cause of rising gas prices

Posted on 31 July 2013 by VRS  |  Email |Print

By now, you have probably noticed that prices at the pump have been anything but kind. Gasoline prices have been steadily rising in the US as the summer months continue to heat up. While it is true that gasoline prices are typically higher during the warmer months as demand also rises, the current spike is also due to some behind the scenes issues that many consumers may not be aware of.
Believe it or not, ethanol has been one of the main culprits behind the higher cost of filling your tank. It started with the 2005 Clean Air Act, which mandated that refiners needed to blend a certain amount of ethanol with gasoline that was being produced………………………………………..Full Article: Source

Why there’s no such thing as a safe haven

Posted on 31 July 2013 by VRS  |  Email |Print

Investors who flocked to “safe haven” assets over the past several years suffered a rude shock in 2013. Government bonds, the security blanket of choice for investors traumatized by the global credit crisis, lost 2.2% in the first half of this year. Yet, this disappointing performance looks absolutely scintillating compared to gold bullion.
Gold, whose reputation resides in its ability to act as portfolio insurance in difficult times, went into free-fall in 2013 losing nearly a quarter of its value. The hefty returns racked up over the previous three years just evaporated. Unquestionably, more than one gold bug feels like they have splatted on a windshield………………………………………..Full Article: Source

Gold loss to platinum widening for best forecasters: Commodities

Posted on 31 July 2013 by VRS  |  Email |Print

In a year when almost all metals are falling, record car sales and mining strikes mean the best forecasters are favoring platinum over gold as investors lose faith in bullion as a store of value.
Platinum prices that were lower than gold in April, when bullion entered a bear market, cost 11 percent more on July 15, the most in almost two years. The current 8.5 percent premium will expand to an average 19 percent in the fourth quarter, according to estimates from the five most-accurate precious metals analysts tracked by Bloomberg over the past two years………………………………………..Full Article: Source

Gold premiums in India may go through the roof by Diwali

Posted on 31 July 2013 by VRS  |  Email |Print

The fees paid by jewelers to banks and other importers reached new heights as the fresh central bank curbs limited the supply of gold in India. The gold premiums jumped to more than double during the week, according to recent data released by the country’s trade body.
The gold imports, which stood high at 162 tonnes during the month of May, had plunged by 81% to reach nearly 31.5 tonnes during June. Gold premiums, which were as low as $4 per troy ounce during the last week have now shot up to levels of $10 per ounce over the London Gold Market cash price………………………………………..Full Article: Source

Why negativity toward gold bullion isn’t affecting physical demand

Posted on 31 July 2013 by VRS  |  Email |Print

Gold bullion prices fell below $1,200 an ounce by the end of June; now, they are trading above $1,300, down from well above $1,600 in January. Looking at this price action in the gold bullion market,investors are asking if the recent surge after making lows is just a rally based on short covering—investors who were short-closing their positions—or if it’s due to fundamental reasons.
I stand in the camp that believes the rise in gold bullion prices we are seeing is due to fundamental reasons. That said, the sell-off we witnessed in the precious metal prices could take some time to recover………………………………………..Full Article: Source

Bet on an oil surge with these 3 ETFs

Posted on 31 July 2013 by VRS  |  Email |Print

Oil production in America is booming, especially after the discovery of shale oil in regions of North Dakota and Texas. The development of these resources is now beginning to have a huge impact on the global hydrocarbon markets, as evidenced by a report from the Energy Information Association (EIA) which states that, last month, shale oil production had reached 7.4 million barrels per day.
Further, an estimate by the International Energy Agency (IEA) projects that the world’s largest economy will achieve shale oil production of 9 million barrels a day by 2018. In fact, some believe that the country will surpass Saudi Arabia in oil production by 2020, underscoring America’s dramatic rise up the oil charts……………………………………….Full Article: Source

Building an investment portfolio with ETFs

Posted on 31 July 2013 by VRS  |  Email |Print

For those who want to build an investment portfolio with exposure to the performance of a diversified group of assets, exchange traded funds (ETFs) are becoming an increasingly popular choice.
ETFs aim to replicate the performance of a particular index or asset by investing in its component parts. A standard S&P ASX 200 index ETF, for example, would effectively give you exposure to the 200 companies that make up the index through a single trade and for a tiny proportion of the cost of investing in them directly………………………………………..Full Article: Source

Scotiabank’s Commodity Price Index drops back in June

Posted on 31 July 2013 by VRS  |  Email |Print

After rallying in May, Scotiabank’s Commodity Price Index fell by 4.1% month-over-month (m/m) in June - the sharpest decline since late 2012. “The Index will be underpinned in July by a return to stronger oil prices in Western Canada and the beginning of another upswing in lumber and oriented strandboard (OSB) prices, after a sharp, seasonal inventory correction,” said Patricia Mohr, Scotiabank’s Vice President of Economics and Commodity Market Specialist.
“The All Items Index remains 1.7% above a year earlier, with Oil & Gas up +17.8%, Forest Products +1.5% and Agriculture +0.1% just offsetting a -13.6% decline in Metals & Minerals.” (Press Release)

Dollar rises as Fed meeting gets under way

Posted on 31 July 2013 by VRS  |  Email |Print

The U.S. dollar moved higher versus the euro and the Japanese yen Tuesday, extending a modest gain in the wake of data that showed consumer confidence fell more than expected in July while the Federal Reserve began a two-day monetary-policy meeting.
The ICE dollar index , a gauge of the greenback’s movement against six other major currencies, changed hands at 81.815, up from 81.663 late Monday in North America………………………………………..Full Article: Source

Rupee hits 3-week low, testing RBI’s resolve to defend currency

Posted on 31 July 2013 by VRS  |  Email |Print

The Indian rupee fell below the key psychological level of 60 to the dollar to a three-week low on Tuesday, posting its biggest fall in a month, as the central bank kept interest rates on hold and failed to announce any additional steps to defend the currency.
The rupee has now erased all gains since the Reserve Bank of India first announced steps to defend the rupee by withdrawing cash on July 15, and is within sight of a record low of 61.21 hit early this month……………………………………….Full Article: Source

Carbon credits market is neither free nor worth anything

Posted on 31 July 2013 by VRS  |  Email |Print

The paradox du jour: people who like free markets don’t want a carbon market, and the people who don’t trust capitalism want emissions trading. So why are socialists fighting for a carbon market? Because this “market” is a bureaucrat’s wet dream.
A free market is the voluntary exchange of goods and services. “Free” means being free to choose to buy or to not buy the product. At the end of a free trade, both parties have something they prefer………………………………………..Full Article: Source

Will California and Australia trade carbon credits?

Posted on 31 July 2013 by VRS  |  Email |Print

California’s greenhouse gas cap and trade program will basically merge with a similar program in Quebec in January. If a Tuesday announcement by the California Air Resources Board (CARB) is any indication, Australia may be next.
The announcement comes in the form of a Memorandum of Understanding (MOU) between CARB, which manages the state’s greenhouse gas emissions credit auction and trading program, and the Australian Government Clean Energy Regulator………………………………………..Full Article: Source

China’s spending on renewable energy may total 1.8 trillion yuan

Posted on 31 July 2013 by VRS  |  Email |Print

China’s spending to develop renewable energy may total 1.8 trillion yuan ($294 billion) in the five years through 2015 as part of the nation’s efforts to counter climate change, according to a government official.
China may invest another 2.3 trillion yuan in key energy-saving and emission-reducing projects, Xie Zhenhua, vice chairman of the National Development and Reform Commission, said today at a conference in Beijing. China stands by its pledge to cut carbon emissions per unit of economic output by as much as 45 percent before 2020 from 2005 levels, he said………………………………………..Full Article: Source

Regulators face scrutiny on banks’ commodities at senate hearing

Posted on 30 July 2013 by VRS  |  Email |Print

U.S. banks’ ownership and trading of physical commodities will face further scrutiny tomorrow when the heads of the Commodity Futures Trading Commission and Securities and Exchange Commission testify before lawmakers.
Senator Sherrod Brown, the Ohio Democrat who led a hearing on the issue last week, said he plans to question the CFTC’s Gary Gensler and the SEC’s Mary Jo White on their oversight when the two chairman appear before the chamber’s Banking Committee on implementation of Dodd-Frank Act reforms…………………………………Full Article: Source

The commodities market: A big bank love story

Posted on 30 July 2013 by VRS  |  Email |Print

The Fed loosened rules to allow banks to buy commodities, driving up everyday prices for consumers. Who the next chair is matters if these kinds of practices are ever to be stopped. Who becomes the next Federal Reserve chair matters, not only because of the implications for economic and monetary policy, but because the Fed remains one of the nation’s chief financial regulators.
There are dozens of policies, some we don’t even know about, over which the Fed wields critical influence. While the past year has seen a small but important shift toward tighter controls, particularly on the largest Wall Street institutions, all of that could change if President Barack Obama selects another deregulator in the Greenspan tradition…………………………………Full Article: Source

JPMorgan faces ‘hard sell’ in crowded market for commodity traders

Posted on 30 July 2013 by VRS  |  Email |Print

For third time in five years, one of the world’s biggest commodity trading desks is for sale. JPMorgan Chase & Co. said on Friday it would seek “strategic alternatives” for its physical oil, gas, power and metals trading division, the core of which is a group that’s already been through two ownership changes since 2008.
It was a surprise about-face for a bank that spent billions of dollars over the past five years assembling the largest physical trading platform on Wall Street…………………………………Full Article: Source

For the masters of commodities at JPMorgan, a sense of deja vu

Posted on 30 July 2013 by VRS  |  Email |Print

Fifteen years ago, a boom in global commodity trading was underway, and JPMorgan was late to the game. Trying to catch up with Wall Street rivals, JPMorgan recruited a young trader, Danny Masters. Within a few years, it had built a global platform that eclipsed its peers. At last it was a major player in markets from oil to metals.
Then it pulled the plug. Regulatory scrutiny in metals markets had tarnished its reputation; the gains from shipping oil around the world no longer seemed worth the risk. On Friday, history repeated itself…………………………………Full Article: Source

Oil futures liquidity could take hit from JP Morgan divestiture

Posted on 30 July 2013 by VRS  |  Email |Print

Friday’s news that JP Morgan Chase is considering either selling or spinning off its physical commodities trading business had a negligible effect on oil futures on Monday, but market experts argue that it could hamper liquidity going forward. Dennis Gartman, publisher and editor of the Gartman Letter, theorized that JP Morgan was being “pressured” to leave the physical commodity trading business.
“It’s sad that they are forced out by our government or forced out by public opinion,” Gartman said, adding that any reduction in the physical activity in the marketplace would reduce liquidity and lead to greater volatility as it relates to the oil futures market…………………………………Full Article: Source

OPEC’s oil exports revenue breaks record

Posted on 30 July 2013 by VRS  |  Email |Print

Revenue from petroleum exports in the Organization of the Petroleum Exporting Countries broke a new record in 2012 but the earnings of some members are declining amid higher budgetary needs, underscoring a deepening rift between producers benefiting from higher oil prices and those who don’t.
Mounting inequalities within OPEC come ahead of an expected debate later this year over whether it should formally cut its production for the first time in five years. In its annual statistical report, OPEC said its oil exports revenue, which include crude, natural-gas liquids and products, rose by 9.2% to $1.261 trillion in 2012, compared to a previous record of $1.155 trillion the previous year…………………………………Full Article: Source

OPEC exports jump to $1.26 trillion

Posted on 30 July 2013 by VRS  |  Email |Print

OPEC’s petroleum exports jumped in value by almost 10 percent in 2012 year-on-year and the producers’ GDP climbed 12 percent, according to the group’s latest report, an income surge that looks harder to repeat this year.
The gains, announced in OPEC’s Annual Statistical Bulletin 2013, reflect record prices and steadily climbing output last year from many members of the Organization of the Petroleum Exporting Countries. An increase in cash flow is a big advantage for producer countries…………………………………Full Article: Source

Iraq headed for 1st annual oil output drop in three years

Posted on 30 July 2013 by VRS  |  Email |Print

Iraq’s oil revival is stalling, and unless momentum is regained, Baghdad will report an output decline for 2013, its first after two years of robust gains, much to the relief of rival Gulf producers.
Swift work since 2010 at Iraq’s southern oilfields by the likes of BP, Exxon Mobil and Eni raised output by 600,000 barrels per day (bpd) to 2.9 million bpd in 2012, turning Iraq into the world’s fastest growing exporter…………………………………Full Article: Source

Will $100+ oil be a problem for the economy?

Posted on 30 July 2013 by VRS  |  Email |Print

“Higher Oil Prices Threaten Global Economy” – AP, March 10, 2011. This may be a headline of the distant past, but it was written at a time when crude oil traded just above $100/barrel. In fact, on March 10, 2011 crude oil ended the day at 102.58.
Oil above 100 usually captures the media’s attention one way or another. Some outlets consider it a sign of a strengthening economy, others a stone around the neck of car-driving consumers. Interestingly, this time around, 105 oil hasn’t tickled the media’s reporting need yet…………………………………Full Article: Source

Gold price recovery: New golden era or false dawn?

Posted on 30 July 2013 by VRS  |  Email |Print

The price of gold is rising after recent sharp falls. Is it becoming a solid investment again? Last week saw the price of gold climb strongly, bringing July’s total gains to around 10pc. Gold ”bugs” – those who are committed buyers – pointed to market data, including the prices of contracts by which traders speculate on gold’s future price, as evidence that ”a corner had been turned”. Is this really the case?
What has happened to the gold price? Having peaked in autumn 2011 at almost $1,900 an ounce, the price fluctuated between $1,600 and $1,800 for much of the next year, before beginning a sharp decline from October 2012. Last month it fell below $1,200…………………………………Full Article: Source

Is the rebound in gold funds already underway?

Posted on 30 July 2013 by VRS  |  Email |Print

Gold equities have been in the middle of a perfect storm for the past 18 months or so, sending share prices – and valuations – to historic lows in some cases. Issues over costs led to a significant disconnect between gold and gold miners in 2011 and 2012, so when bullion itself took a spectacular tumble earlier this year, gold funds fell from already depressed levels.
This, combined with the waning sentiment towards natural resources in general, has seen the HSBC Global Gold index fall more than 46 per cent since the beginning of 2012, with many gold funds not too far behind…………………………………Full Article: Source

Money managers take long position on gold, eye uptrend

Posted on 30 July 2013 by VRS  |  Email |Print

Money managers have increased their long bets on the yellow metal considering sharp rally seen in the metal over the past one week. The gold prices have shown uptrend in recent weeks, which prompted hedge funds to take long positions in recent data shared by the US commodities regulator.
The US Commodity Futures Trading Commission data showed that money managers increased their net-long position by 26% to 70,067 futures and options as of July 23. The fourth consecutive weekly gain is the longest streak since October. Bullish wagers across 18 U.S.-traded commodities gained 7.4 percent to 615,140. Investors more than doubled bets on lower corn prices to a record net-short holding…………………………………Full Article: Source

China’s base metals imports collapse: What does it all mean?

Posted on 30 July 2013 by VRS  |  Email |Print

A drop in China’s refined base metals imports in the first half of this year seems to support falling Purchasing Managers Index (PMI) results, suggesting the slowdown in China’s economy is set to continue. In the words of Yasuo Yamamoto, a senior economist at Mizuho Research Institute in Tokyo, this is “….starting to become more dangerous,” a Reuters article reports.
“China’s economic growth rate will probably fall below 7 percent in the fourth quarter this year and may fall under 6 percent in some quarter next year,” Wang Jian, a senior researcher with the China Society of Macroeconomics, a research body affiliated with the National Development and Reform Commission (NDRC), is also quoted as saying…………………………………Full Article: Source

Higher commodity prices needed to generate more mining deals - EY

Posted on 30 July 2013 by VRS  |  Email |Print

While low valuations, divestitures and cash-strapped juniors have set the stage for a buyer’s market, mining and metals companies aren’t necessarily biting.
In a report on mergers, acquisitions and capital raising in mining and metals for 1H13 made public Monday, EY suggests non-traditional investors—primarily state-backed investors and financial investors, such as private capital and investment funds—are “increasingly targeting the resources sector as valuation have plummeted, in an attempt to capture upside once confidence returns to the sector.”………………………………..Full Article: Source

With metals soft, two more Australian miners warn of likely writedowns

Posted on 30 July 2013 by VRS  |  Email |Print

Falling metals prices are exacting a heavier toll on Australia’s mining sector—once the engine of the country’s economy—with two midsize producers the latest to warn of hefty writedowns.
OZ Minerals Ltd., which runs one of the country’s largest copper mines, and gold producer Evolution Mining Ltd Monday warned of a combined hit to their bottom lines of up to 640 million Australian dollars (US$593 million). Each blamed sharp falls in prices of commodities like gold, Australia’s third-biggest export, as the U.S. edges toward tighter monetary policy and China’s economy cools…………………………………Full Article: Source

There are troubled currencies around the world on the brink of hyperinflation

Posted on 30 July 2013 by VRS  |  Email |Print

For academics, the term “troubled currency” might be a term of art. But for people who are faced with such a currency, they know a troubled currency when they see one. Today, this is the case for millions of people around the world – most notably in Iran, North Korea, Argentina, Venezuela, Egypt and Syria.
A troubled currency is one in which users have lost confidence. When users no longer think a currency will retain its purchasing power, they attempt to dump it for a stable foreign currency (or commodities)…………………………………Full Article: Source

Local currency drop worsens Afghan economic woes

Posted on 30 July 2013 by VRS  |  Email |Print

The continuing fall of the local currency has not only worsened the Afghan economy but also dampened the Afghan spirit to rebuild their country, particularly at a time when they are preparing for the pull-out of all foreign forces in 2014.
The recent fall of the afghani has caused concerns not only among government officials but also among ordinary Afghan people. “It is a cause of concern for everyone, particularly for the government employees and people whose incomes are paid in afghanis, “said Sayyed Massoud, a Kabul University lecturer…………………………………Full Article: Source

Carbon market helps cut emissions

Posted on 30 July 2013 by VRS  |  Email |Print

Substantial step taken to clean up environment and save energy. On July 18, one month after China launched its first pilot carbon-trading program in Shenzhen, Guangdong province, the city began consulting local businesses and government departments about its draft regulations for the project. The regulations emphasize that carbon credits are corporate assets.
The launch ceremony of the Shenzhen Emissions Trading Scheme saw Shenzhen Energy Group sell 10,000 metric tons of carbon credits to PetroChina International Guangdong at 28 yuan ($4.60) per ton. Hanergy Holding Group also bought 10,000 tons at 30 yuan per ton. Both businesses purchased the credits for investment purposes…………………………………Full Article: Source

Commodities: How the credit crunch has turned the equities relationship on its head

Posted on 29 July 2013 by VRS  |  Email |Print

A report by the Bank for International Settlements (BIS) released last week defies conventional wisdom to suggest commodities do not diversify investments at all. A new study released last week is causing a bit of a buzz in commodity markets.
Traditional wisdom dictates that investing in commodities is supposed to act as a portfolio “hedge” and reduce overall volatility. However, the report by the Bank for International Settlements (BIS) released last week suggests commodities do not actually diversify investments at all. “The popular view that commodities are to be included in one’s portfolio is not grounded,” said the study, by Marco J. Lombardi and Francesco Ravazzolo………………………………………..Full Article: Source

China wealth fund downgrades commodities

Posted on 29 July 2013 by VRS  |  Email |Print

China’s sovereign wealth fund has switched emphasis away from commodities to financial stocks in its overseas equity holdings over the past year. The investment shift by China Investment Corp is notable because the fund is uniquely placed to make a call about the global commodities market, with Chinese demand one of the biggest drivers of prices.
Since its establishment in 2007 CIC had focused most heavily on commodities. But the fund, which had $575bn of assets under management at the end of last year, changed tack as Chinese growth slowed………………………………………..Full Article: Source

Chinese economic slowdown threatening commodities prices

Posted on 29 July 2013 by VRS  |  Email |Print

A copper price collapse of more than 60 percent, zinc cut by up to a half and oil down to $70 a barrel. That’s the fate facing world commodity markets should China’s growth dip to 3 percent in the next three years — a scenario economists at Barclays Plc (BARC) are now examining.
They’re not the only ones building models based on a steep decline in growth in the world’s second-biggest economy. Nomura Holdings Inc. (8604) estimates a one-in-three chance of a sharp drop by the end of 2014, and Societe Generale SA sees a “non-negligible risk” of less than 6 percent growth this year and an outside chance of 3 percent average expansion for this half and next………………………………………..Full Article: Source

Oversold China catches the eye of investors

Posted on 29 July 2013 by VRS  |  Email |Print

A slowdown in China has hit its financial markets hard this year as fund managers cut exposure to the world’s second largest economy, but some investors say it may be time to jump back in.
The country’s downturn is being felt around the world. Energy and materials stocks have been hit, commodities prices are lower, and the currencies of China’s trading partners, including Australia, Taiwan and South Korea, have tumbled………………………………………..Full Article: Source

New dimensions of international oil markets

Posted on 29 July 2013 by VRS  |  Email |Print

The Organisation of Petroleum Exporting Countries (Opec) oil revenue is set to go down, suggest the US Energy Information Administraion (EIA). THe EIA noted that all Opec members excluding Iran, earned nearly $982 billion in net oil export revenues in 2012 - a 5.4 per cent increase from 2011.
After adjusting for inflation with 2005 dollars as a constant, Opec’s revenue increased by 3.2pc to $835bn in 2012, the EIA added. However, Opec’s sales revenue is now projected to tumble by 4.3pc in 2013 to $940bn and by further 3.9pc to $903bn in 2014, the EIA underlined………………………………………..Full Article: Source

Oil prices heading higher! Try this approach

Posted on 29 July 2013 by VRS  |  Email |Print

As an energy writer, the most common question I get from friends and family concerns the price of gasoline. Just the other day I was talking to my dad when he mentioned that gas prices back home in New York were now over $3.80 a gallon. I guess I need to stop complaining about local prices that have now shot up to more than $3.30 a gallon.
The bad news, which I had to relay to my dad, is that prices aren’t likely to go down again anytime soon. Worse yet, drivers probably should get ready for higher gas prices. Last week’s $0.12 jump could only be the beginning because a confluence of factors driving supply and demand are likely to push prices higher………………………………………..Full Article: Source

Iran’s high chance of winning OPEC chairmanship

Posted on 29 July 2013 by VRS  |  Email |Print

An Iranian lawmaker says chances are high for the Islamic Republic to assume the presidency of the Organization of the Petroleum Exporting Countries (OPEC).
“Iran is among the countries which, since the beginning of OPEC’s activity, has had an effective presence in the organization and enjoys a high level of expertise and experience compared to the other members of the organization,” said Hossein Amiri Khamkani, a member of the Economic Committee of Iran’s Majlis, on Saturday………………………………………..Full Article: Source

Saudi prince warns of waning need for OPEC crude

Posted on 29 July 2013 by VRS  |  Email |Print

Saudi Prince Alwaleed bin Talal told Oil Minister Ali Al-Naimi in an open letter that the kingdom won’t be able to raise production capacity to 15 million barrels of crude a day as planned, and that he disagrees with him over the impact of U.S. shale gas output.
The prince published the letter Sunday on Twitter, saying there’s a “clear and increasing decline” in demand for crude from members of the Organization of Petroleum Exporting Countries, particularly Saudi Arabia. The kingdom is now pumping at less than its production capacity as consumers limit oil imports, Alwaleed said………………………………………..Full Article: Source

World energy markets leaving EU behind

Posted on 29 July 2013 by VRS  |  Email |Print

The International Monetary Fund said it expects the European economy will remain in recession for 2013 and expand by less than 1 percent next year. That translates to lower demand for oil and natural gas. On strategic issues, EU leaders last week said they were concerned about the ability to defend the bloc’s national interests in the age of austerity.
With demand centers for energy resources shifting to Asian economies, and production gains continuing in North America, the European Union may find itself in desperate need of a revolution on many fronts if it wants to stay relevant in the international community………………………………………..Full Article: Source

Gold, silver rally will be short-lived; downside risks persist

Posted on 29 July 2013 by VRS  |  Email |Print

Four weeks into the third quarter of the year, global commodity markets are still groping for direction. A clutch of factors including demand and supply side issues, varying monetary policy stance of central banks, volatile exchange rates and geopolitics to name a few have created a sense of uncertainty.
There indeed are concerns over global growth. In the coming months, communication from central banks especially in advanced economies will have a far reaching impact on commodity markets with potential effect on volatility………………………………………..Full Article: Source

Lower gold prices a boon

Posted on 29 July 2013 by VRS  |  Email |Print

Jewellery sales are gaining momentum while gold coins and bars are in high demand in the wake of the plunge in the prices of the yellow metal this year, industry players say.
Major retailers and gold jewellers have redesigned their business strategies and are now comfortable with present gold prices, which resulted in strong double-digit sales during the first half of 2013. However, some shop owners and customers in Dubai and Sharjah have complained about a shortage of “Swiss brand” gold bars and coins in the market………………………………………..Full Article: Source

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