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Commodities Briefing 30.Dec 2008

Posted on 30 December 2008 by VRS |  Email |Print

From AP: During the first six months of 2008, commodities looked to be the savior of investors who were losing money in the stock market. In the second half, particularly for those who had invested in oil, futures contracts were their undoing.

At the start of 2009, commodities have little appeal. Most analysts expect prices to remain under pressure as worldwide demand continues to wane for basic materials of all kinds….. Full Article: Source

Posted on 30 December 2008 by VRS |  Email |Print

From Reuters: Just a year ago the debate about grain prices was simple: how high was high? Huge global demand for grains, governments hoarding food, climate fears amid droughts, storms and floods — basically every bullish factor one could imagine hit the markets.

The psychology of short supplies carried over to other commodities as well, especially industrial metals as China and India drew in a rapidly rising share of materials as their economies raced to modernize and transform….. Full Article: Source

Posted on 30 December 2008 by VRS |  Email |Print

From Businessweek.com: You would expect gold to be a great investment in 2009 if the U.S. dollar remains under pressure because the Federal Reserve embraces a more accommodative monetary policy than those adopted by other key central banks.

But there’s a sticking point: The market remains more concerned about deflation than inflation in the near term, weakening one of the more compelling rationales to buy gold….. Full Article: Source

Posted on 30 December 2008 by VRS |  Email |Print

From Economic Times: While gold could outperform other commodities in 2009, things might start looking up for metals and crude as well by the middle of next year, according to analysts. Among agro commodities, sugar, soybean and rubber along with a few spices could generate interest.

Gold has performed well in comparison to commodities such as base metals and crude oil as well as other asset classes like equities, debt, realty and bank fixed deposits….. Full Article: Source

Posted on 30 December 2008 by VRS |  Email |Print

From Thehindubusinessline.com: The extreme volatility of commodity prices in world trade over the past year in particular is one more reflection of the turbulence in the global economy.

While some of these price changes may have their origin in financial markets rather than in changes in real demand and supply, they nonetheless have major effects upon producers and consumers….. Full Article: Source

Posted on 30 December 2008 by VRS |  Email |Print

From Telegraph: The oil price gyrated wildly in 2008, hitting an all-time high above $147 a barrel on July 3 – followed by four-year lows. The big question now is: Where next?

Until the credit crunch saw global markets freeze, demand for oil had been rocketing, mainly because of rapid development in countries such as India and China….. Full Article: Source

Posted on 30 December 2008 by VRS |  Email |Print

From Reuters: Oil prices may rebound to around $100 per barrel between 2010 and 2015, International Energy Agency Chief Economist Fatih Birol predicted on Monday.

Birol told an energy conference that he saw downward pressure on oil prices in 2009 but said he expected prices to move up again in 2010 with a recovery in the world economy….. Full Article: Source

Posted on 30 December 2008 by VRS |  Email |Print

From Livemint.com: The problem is that few believe Opec will follow through on its cuts, although the cartel claims it has already cut 1.7mbpd of the initial 2 million it pledged in September.

Saudi Arabia, the most influential member of the Organization of the Petroleum Exporting Countries (Opec), is targeting an oil price of $75 a barrel. It’s not likely to reach that goal in 2009….. Full Article: Source

Posted on 30 December 2008 by VRS |  Email |Print

From Bloomberg: Oil futures may rebound from their worst year to average $60 a barrel next year as OPEC makes record production cuts to counter the deepest economic slump since World War II.

The forecast, the median of 33 analysts compiled by Bloomberg, represents a 50 percent gain from yesterday’s $40.02 closing price….. Full Article: Source

Posted on 30 December 2008 by VRS |  Email |Print

From FT: Concerns about escalating tensions in the Middle East sent oil prices sharply higher on Monday on fears of supply disruption and offered support to gold, US Treasuries and the Swiss franc as investors sought havens.

Benchmark US crude climbed as much as 12 per cent to $42.20 a barrel and gold touched its highest level for more than two months as Israeli aircraft attacked targets in the Gaza Strip for a third day….. Full Article: Source

Posted on 30 December 2008 by VRS |  Email |Print

From Indexuniverse.com: ETF Securities, a leading provider of commodity-based exchange-traded products in Europe, is entering the U.S. market.

The London-based company has more than $6.5 billion in assets under management and more than 100 different products trading in Europe. It has resolutely stayed away from the U.S. market, however, until now…. Full Article: Source

Posted on 30 December 2008 by VRS |  Email |Print

From Fool.com: Exchange-traded funds (ETFs) have been one of the fastest-growing investment products in recent years. Their trading flexibility and low expenses have attracted millions of investors to their doors.

But as more and more of these funds are being rushed to market, expenses on some ETFs have begun to creep up. In fact, some ETFs now charge more than many actively managed mutual funds. Why are some of these funds so expensive? ….. Full Article: Source

Posted on 30 December 2008 by VRS |  Email |Print

From Bloomberg: The biggest-ever decline in commodities turned Pierre Andurand and Chris Levett into this year’s heroes for investors.

Andurand’s $1.1 billion BlueGold Capital Management LLP hedge fund in London almost tripled between its February debut and November by betting on higher oil prices in the first half of 2008 and then reversing the strategy, the 31-year-old manager said. ….. Full Article: Source

Posted on 30 December 2008 by VRS |  Email |Print

From Haaretz.com: History will remember 2008 as the year all financial assets, except for government bonds, plummeted by tens of percentage points. This has been a terrible year for investors the world over. 2009 will be no picnic, either.

Economies around the world are sinking into recessions one after the other, and investors are wary of risks. People used to look for the highest profits, but now all investors want is not to lose, and only afterwards to gain a few percentage points on their liquid assets….. Full Article: Source

Posted on 30 December 2008 by VRS |  Email |Print

From FT: European shares climbed on Monday as stronger crude oil prices supported commodity stocks, in spite of many traders remaining away from their desks ahead of the new year.

The FTSE Eurofirst 300 rose 0.8 per cent to 810.37 bringing its losses for the year to 47 per cent as pain from the financial sector rippled into the real economy. This compares with gains of 1.6 per cent in 2007, 16 per cent in 2006 and 22 per cent in 2005…. Full Article: Source

Posted on 30 December 2008 by VRS |  Email |Print

From Hardassetsinvestor.com: Back in February of 2008, tight supplies were forecast in the cocoa market, along with higher prices. Analysts called for a 14% rise in cocoa prices in the U.S., which would have pushed prices up to $2,325/tonne.

They underestimated the move: Despite the broader pullback in financial markets, cocoa in NY was sitting at $2,626/tonne on Friday, December 26. If NY cocoa hangs tight, it could end the year some 30% up - an outstanding performance given the other pricing trends in commodities right now….. Full Article: Source

Posted on 30 December 2008 by VRS |  Email |Print

From Bloomberg: The pound may rebound from its worst year on record against the euro as investors start betting on a recovery in the U.K. economy, according to the world’s biggest currency traders.

The U.K. currency will strengthen 14 percent against Europe’s common currency next year, after depreciating about 24 percent in 2008, based on the median forecast of 42 analysts and strategists surveyed by Bloomberg….. Full Article: Source

Posted on 30 December 2008 by VRS |  Email |Print

From Reuters: Noncommercial or speculative investment funds on the New York Mercantile Exchange decreased their net short natural gas futures exposure by about 8,200 contracts for the week ended Dec. 22, the Commodity Futures Trading Commission said in a report on Monday.

The report showed funds holding 154,613 net short futures, down 8,221 contracts from the previous week’s total of 162,834….. Full Article: Source

Posted on 30 December 2008 by VRS |  Email |Print

From Reuters: Oz Minerals, which mines industrial and precious metals in Australia and Laos, was given another two months to persuade lenders to refinance $560 million in debt as it tries to raise cash by selling assets to combat sharp falls in metals prices.

The company, whose shares were suspended November 28 after dropping 85 percent from their January price, was due by the end of Monday to refinance a $140 million loan and a syndicated credit line of which $420 million has been drawn….. Full Article: Source

Posted on 30 December 2008 by VRS |  Email |Print

From Mineweb.com: The world’s biggest bank by market value, the Industrial and Commercial Bank of China, gave gold traders a 23-minute bonanza that cost the bank last week.

A computer glitch at the Industrial and Commercial Bank of China gave gold traders a 23-minute bonanza that cost the bank dearly last week, sparking a debate on Monday as the bank reclaimed the windfall….. Full Article: Source

Posted on 30 December 2008 by VRS |  Email |Print

From The Age: The Australian dollar is higher after the escalation of tensions in the Middle East caused commodities prices to rise and the US dollar to weaken. The Australian dollar was trading at $US0.6882/86, up from Monday’s close of $US0.6864/68.

During the morning, the local unit moved between $US0.6851 and $US0.6906….. Full Article: Source

Posted on 30 December 2008 by VRS |  Email |Print

From Guardian: The dollar rose against the euro on Monday, reversing early losses in a late surge as investors snapped up the greenback in thin trading after the single currency failed to sustain gains fueled by fighting in the Middle East.

The conflict had earlier prompted a flight to traditional safe-havens such as the Swiss franc and gold. It also led to euro buying and spurred demand for oil, as well as commodity currencies such as the Australian and Canadian dollars….. Full Article: Source

Posted on 30 December 2008 by VRS |  Email |Print

From Bloomberg: Copper declined in London after stockpiles jumped to the highest in nearly five years as a global slowdown cuts raw material demand.

London Metal Exchange-monitored inventory jumped by 5,250 metric tons yesterday, to 336,700 tons, the highest since Feb. 9 2004. The stockpiles have increased 71 percent this year while copper prices are down 56 percent, heading for the first annual decline since 2001….. Full Article: Source

Posted on 30 December 2008 by VRS |  Email |Print

From Reuters: India pepper futures ended higher on Monday on short-covering after trading weak all day, analysts said. Pepper prices have fallen close to six percent last week on demand worries and continuous new crop arrivals.

Prices were weak all day as low export demand coupled with fresh arrivals weighed, Kunal Shah, an analyst with Nirmal Bang Commodities said, adding the trend for the near-term was bearish….. Full Article: Source

Posted on 30 December 2008 by VRS |  Email |Print

From Bloomberg: Canada’s dollar rose for the first time in three days as crude oil advanced on bets a conflict between Israel and Hamas could disrupt supplies and gold climbed as investors sought a haven.

“People are keeping an eye on what’s happening in the Middle East,” said George Davis, Toronto-based chief technical analyst at RBC Capital Markets. The increase in crude oil prices is “underpinning the Canadian dollar,” he said….. Full Article: Source

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