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Commodities Briefing 24.Nov 2008

Posted on 24 November 2008 by VRS |  Email |Print

From Ndtv.com: It was being forecasted till only a few months ago that crude oil would sell for $200 per barrel, but the same has now come crashing down to one-fifth of that level!

Having seen the crude prices slip from its peak of over $147 a barrel in July to below $50 late last week, the industry experts now believe that the most-keenly monitored commodity could see a level of $40 in the next few weeks, as demand slump is unlikely to subside in the current economic scenario….. Full Article: Source

Posted on 24 November 2008 by VRS |  Email |Print

From Business24-7.ae: With plummeting world demand for steel, more mills may opt to link future iron ore supply contracts to over-the-counter market prices rather than traditional term contracts, Deutsche Bank’s director of metals trading said.

Raymond Key said that he was encouraged by the increasing interest from higher production-cost steelmakers, especially in China, in linking supply contracts to an iron ore index price….. Full Article: Source

Posted on 24 November 2008 by VRS |  Email |Print

From Cattlenetwork.com: The oil market has tumbled for months on weak demand. after Thanksgiving, it’ll be suppliers’ turn to push back. Yet some market watchers doubt production cuts will boost prices much — and a few see further price drops.

anuary crude futures settled at $49.93 a barrel, down 12% for the week, a roughly $96 plunge since July, near a three-year low. The market has blasted through several potential low points on a steady drumbeat of negative indicators: U.S. demand for refined products is down 7% from the year-earlier level, the euro zone and Japan recently entered recession, and forecasters expect China’s growth rate to fall sharply….. Full Article: Source

Posted on 24 November 2008 by VRS |  Email |Print

From Commodityonline.com: Much of current debate on derivatives and financial instruments is focused on credit default swaps (CDS), and the rising shorts in Futures and options that partly led to the financial crisis. Unfortunately, the $5 billion exchange traded note (ETN) has been overshadowed and therefore not getting the attention it deserves.

ETN is unsecured debt instruments that pay a return linked to the performance of an index, currency or a commodity. In a similar arrangement to investing in bonds, ETN payments rely on full credit and faith of the institution backing the product….. Full Article: Source

Posted on 24 November 2008 by VRS |  Email |Print

From Thehindubusinessline.com: Despite many challenges such as shortage of fertiliser and delayed monsoon, the Government expects an agriculture growth of 4 per cent in 2008-09, similar to what it was last year.

Speaking at the seventh National Conference of Commodity Exchanges organised by the commodity markets regulator Forward Markets Commission, Mr Sharad Pawar, Ministry of Agriculture, Consumer Affairs and Food & Public Distribution, said that though the climatic conditions were unfavourable for a few crops, the Government expects the country to register an agriculture growth of about 4 to 4.5 per cent….. Full Article: Source

Posted on 24 November 2008 by VRS |  Email |Print

From FT: Cuts and delays to investment in Europe’s energy infrastructure caused by the financial crisis and the recession will weaken future energy security and undermine the fight against climate change, a leading consultancy has warned.

Projects including new wind farms, gas pipelines and electricity cables are already being put off or are likely to be deferred….. Full Article: Source

Posted on 24 November 2008 by VRS |  Email |Print

Rio Tinto Ltd. Chairman Paul Skinner said the company still expects demand for its key products to double by 2022 despite the current slowdown in demand.

Skinner said economic growth in China in the fourth quarter looked set to be slower than in the third quarter but in the long run China would remain the key driver of commodities demand. “We still expect global demand for our key products, including iron ore, copper and aluminium, to double by 2022,” he said….. Full Press Release: Source

Posted on 24 November 2008 by VRS |  Email |Print

From Btimes.com.my: Theory, with the US economy officially entering recession as its GDP contracted by 0.3 per cent QoQ in the 3Q2008, the US dollar (USD) should be weakening against other currencies in particular against those of the US major trading partners.

Surprisingly, a barrage of grim economic news has failed to fret the USD. Since the breakout of what we would term as the second-round explosion of the global financial crisis in mid-September 2008, the USD has actually raced to multi-year highs against virtually all currencies with the exception of the Japanese yen (JPY) and to a certain extent, the Chinese yuan (CNY)….. Full Article: Source

Posted on 24 November 2008 by VRS |  Email |Print

From Investmentnews.com: In the current economic maelstrom, exchange traded funds are beating mutual funds in the fight for investor dollars — a battle that will have long-term implications for the asset management industry.

In September and October, investors put $61 billion more into U.S. ETFs than they took out, while a net $126.7 billion flowed out of stock and bond mutual funds, according to Barclays Global Investors of San Francisco….. Full Article: Source

Posted on 24 November 2008 by VRS |  Email |Print

From Thehindubusinessline.com: The world financial market in general and commodity markets in particular are going through extremely uncertain times. The crisis of confidence is palpable. A big hit to global growth prospects turning into recessionary conditions has scared every market participant.

Stock indices and commodity prices are falling almost every day rather routinely. The bottom is still not in sight, although every fall raises expectation of proximity to the bottom….. Full Article: Source

Posted on 24 November 2008 by VRS |  Email |Print

From Themoscowtimes.com: The U.S. and European automobile industries are screeching to a halt, and they’re leaving behind a string of casualties — not all of which are obvious.

Prices for platinum, which 18th-century French monarch Louis XV is said to have called the only metal fit for a king, have fallen 66 percent from their high in March of $2,276 per ounce to as low as $769 last week. And while coronations have fallen off sharply in recent centuries, weakening demand from carmakers is the culprit behind platinum’s plummet….. Full Article: Source

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From AP: Russia’s ambassador to Cuba says his country’s oil companies are interested in searching for oil in deep Gulf of Mexico waters off of the Caribbean island.

Ambassador Mijail Kamynin’s comments appeared in the state-run newspaper Opciones on Saturday. Russian President Dmitry Medvedev is due to visit Cuba on Thursday…. Full Article: Source

Posted on 24 November 2008 by VRS |  Email |Print

From Resourceinvestor.com: While equity markets were once again bludgeoned unmercifully this week, gold and silver fared relatively better. Perhaps that is in part because the largest of the largest futures traders continued to have the lowest COMEX futures net short positioning in years.

As the world once again fell into an abyss of fear over the past week, the reasons for which are well documented elsewhere, investors are coming to the realization that a violent new bubble has been forming since July. …. Full Article: Source

Posted on 24 November 2008 by VRS |  Email |Print

From Commodities-now.com: President-elect Barack Obama can’t win. Coal associations are skeptical of his energy plans because he is pushing carbon cuts before the technologies to fully achieve such aims have matured. Environmentalists are also cautious and contend that his advocacy of “clean coal” does not make sense.

Coal will continue to be an integral energy source. Improving and developing the tools to make it cleaner does not contradict alternative energy producing methods. The reality is that long-term energy demand will trend higher and therefore necessitate a diversified fuel mix….. Full Article: Source

Posted on 24 November 2008 by VRS |  Email |Print

From WSJ: Copper may have to slide further before the price is low enough to trigger production cutbacks or returns to some kind of historical average that offers lasting support.

Nearby copper on the Comex division of the New York Mercantile Exchange rallied for much of this decade as world demand soared, especially as China developed infrastructure. The metal hit a record of $4.27 a pound in May….. Full Article: Source

Posted on 24 November 2008 by VRS |  Email |Print

From Stockpoint.com: Growing soybean demand and dwindling supplies have seed companies scrambling to boost production. Some have announced aggressive goals to produce more beans, with one company confident it can double yields in about two decades.

With another record-setting year for soybean exports recently announced and no sign of domestic use declining, officials from the Big Three seed companies — Monsanto, Pioneer and Syngenta — said it’s their job to make sure supply keeps pace with demand….. Full Article: Source

Posted on 24 November 2008 by VRS |  Email |Print

From Hpj.com: As farm commodity producers who also shop at the grocery store, we think it’s time all consumers are aware that the grocery industry is taking advantage of recent events, and their doing so is directly affecting all of us.

Earlier this year, as media reported high grain prices, food manufacturers were quick to raise prices, linking their increases to the cost of farm commodities, in addition to fuel. They targeted the production of ethanol, in particular, and waged an aggressive campaign asking Congress to rescind the renewable fuels mandate. …. Full Article: Source

Posted on 24 November 2008 by VRS |  Email |Print

From Nst.com.my: Venezuela will seek a cut in crude production of 1.0 million barrels per day by the end of the year at an OPEC oil cartel meeting in Cairo next weekend, Venezuelan Energy Minister Rafael Ramirez said Sunday.

The OPEC cartel, which produces 40 percent of the world’s crude oil, is scheduled to hold an extraordinary meeting on November 29 in Cairo, Egypt, amid speculation member nations will agree to cut output in a bid to boost plunging oil prices….. Full Article: Source

Posted on 24 November 2008 by VRS |  Email |Print

From Bdafrica.com: Oil marketers have come under the spotlight as global prices of the commodity dropped to a new low, triggering hopes among consumers currently facing inflated fuel costs.

At the close of trading at the New York Stock Exchange on Friday, crude prices had hit $49.62 — the lowest since May 2005….. Full Article: Source

Posted on 24 November 2008 by VRS |  Email |Print

From Oilweek.com: The effects of plunging oil prices on Alberta´s once red hot economy will stretch well beyond the oil laden province´s boundaries, touching everything from Ontario steel pipe producers to federal government coffers.

Crude prices settled below US$50 a barrel on the New York Mercantile Exchange for the first time in three years last week. That is only a third of its all-time high of $147 reached less than five months ago….. Full Article: Source

Posted on 24 November 2008 by VRS |  Email |Print

From Moneyweb.co.za: Gold bullion jumped nearly USD 60/oz on Friday, spurring wide, and heavy, buying of gold stocks; Barrick, the world’s biggest, rose 31% on the day.

It recorded intraday lows and highs of USD 742.93 and USD 801.92, respectively, and spurring heavy buying of listed gold stocks, from the majors to the juniors….. Full Article: Source

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