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Commodities Briefing 26.Jan 2009

Posted on 26 January 2009 by VRS |  Email |Print

From Guardian: OPEC could meet before March if Brent crude oil prices fall to below $40 per barrel, the group’s president was cited by Angolan weekly newspaper O Pais as saying.

Although Jose Botelho de Vasconcelos said he only expected the next gathering of the 12-member Organisation of the Petroleum Exporting Countries to take place, as planned, in Vienna on March 15, he added the group could meet sooner if oil prices suddenly dropped….. Full Article: Source

Posted on 26 January 2009 by VRS |  Email |Print

From FT: Global oil production is falling faster than market expectations as production cuts by Opec members coincide with a sharp slide in supplies from some producers outside the cartel, raising the prospect of a price rise.

In spite of the drop in supplies, oil prices remain stuck in the mid-$40 a barrel range depressed by weak consumption and worries about the economic crisis. However, traders in the physical oil market said supplies were now beginning to drop into balance with falling demand….. Full Article: Source

Posted on 26 January 2009 by VRS |  Email |Print

From Tehrantimes.com: Oil is expected to trade between $30 and $40 in 2009, according to professor of economics and international business, Stern School of Business, New York University, Nouriel Roubini.

Oil prices were among the key topics that were discussed during ‘The World in 2009 Executive Forum’, a one-day conference that was organised by Economist Conferences at the Madinat Jumeirah in Dubai….. Full Article: Source

Posted on 26 January 2009 by VRS |  Email |Print

From Zawya.com: Saudi petrochemical products are expected to suffer a huge fall in prices this year, but a recovery could begin next year, an industry expert said.

“The magnitude of the crisis could not be predicted since the prices of petrochemical products are plummeting worldwide,” said Sulaiman Bin Mohammad Al Mindeel, managing director of the Saudi Industrial Investment Group….. Full Article: Source

Posted on 26 January 2009 by VRS |  Email |Print

From Times Online: Royal Dutch Shell will leave no doubt that the recent golden age of the oil industry has ended when it reveals what could be the largest profit ever in Europe this week despite a drop of up to 50% in profits in the most recent quarter.

The sharp fall in the last three months of the year reflects the oil price, which has plummeted to $46 per barrel after reaching an all-time high of $147 last July. Exxon Mobil, Chevron Texaco and Conoco Phillips are expected to show precipitous declines this week when they reveal their end-of-year performance….. Full Article: Source

Posted on 26 January 2009 by VRS |  Email |Print

From FT: Petrobras, the Brazilian national oil company, is pushing ahead with plans to invest in Brazil’s newly discovered pre-salt oil deposits in spite of market conditions that have raised doubts over its ability to secure finance.

The company’s strategic plan for 2009-2013 - revealed on Friday after months of delays caused by the global credit crisis and volatile oil prices - calls for investment of $174.4bn, a substantial increase on the $112.4bn stated in its 2008-2012 plan….. Full Article: Source

Posted on 26 January 2009 by VRS |  Email |Print

From Theaustralian.news.com.au: Climate Change Minister Penny Wong has scoffed at Opposition claims that the Rudd Government has done nothing on developing clean energy sources, insisting it has already allocated $1 billion for development of renewable technologies and clean coal.

Senator Wong has also demanded that the Opposition back the Government’s planned carbon emissions trading system as the best way to create incentives to trigger investment in renewable energy sources….. Full Article: Source

Posted on 26 January 2009 by VRS |  Email |Print

From Iht.com: The price of gold has declined in dollars with that of other commodities, and has been pushed down by hedge funds that sold their gold holdings to raise cash in September and October. But in British pounds it is still at an all-time high, at 560 pounds per troy ounce compared to 450 pounds a year ago because of the recent dramatic slide in the British currency’s value.

Gold, the metal the wealthy around the world have hoarded for centuries, is recognized and valued all over the world, can be stored in underground vaults or in your wardrobe, and does not rely on complex financial instruments….. Full Article: Source

Posted on 26 January 2009 by VRS |  Email |Print

From Business-standard.com: Gold may advance further this week on increased demand from investors for the metal as a safe bet in the face of a deteriorating world economy and declining investors’ risk appetite for other asset classes.

In dollar terms, however, the yellow metal is likely to remain bullish to $940 an oz because of uncertainty regarding dollar and strong support in precious metals through exchange-traded fund (ETF). For example, gold holding in the SPDR Gold Trust, world’s largest gold-backed ETF, rose 1.6 per cent on Friday to 819.11 tonnes, equal to about four months of global mine production….. Full Article: Source

Posted on 26 January 2009 by VRS |  Email |Print

From Bloomberg: Gold prices rose to a three-month high, climbing past $900 an ounce in both New York and London for the first time since October, as global equity markets tumbled, boosting demand for a safe harbor. Silver also jumped.

Europe’s Dow Jones Stoxx 600 Index slumped as much as 2.6 percent to the lowest since April 2003 before rebounding. Tokyo’s Nikkei 225 sank 3.8 percent. This week, the MSCI World Index of shares slid 4.1 percent, while gold rose 6.7 percent….. Full Article: Source

Posted on 26 January 2009 by VRS |  Email |Print

From Theaureport.com: At this writing, gold is still 15% off its peak, at least in U.S. dollars. Yet at the same time, the metal is cruising at or near all-time highs against a host of other currencies, including the Swiss franc, British pound, Canadian dollar, Australian dollar, and Indian rupee.

That currency disparity means buyers around the world are prepared to pay much more for gold, relative to their own currencies, than is reflected in the New York spot market, which prices gold in dollars….. Full Article: Source

Posted on 26 January 2009 by VRS |  Email |Print

From Mineweb.com: Does gold hedge you against the dollar, bonds, or equities? The answer to that depends on where you are. The latest quantitative analysis for the World Gold Council produces some interesting results. Nothing, it appears, is what it seems.

Part of the World Gold Council’s investment service is a detailed quantitative analysis of gold’s correlation with a wide range of asset classes and commodities….. Full Article: Source

Posted on 26 January 2009 by VRS |  Email |Print

From Resourceinvestor.com: The resource industry and market review I have prepared are the result of several queries from investors and associates in the past few months about my feelings and beliefs regarding the current debacle and what the future holds. Unfortunately, most of us will be affected on one level or another.

It is my belief that the world always or ultimately operates on the fundamentals of supply and demand. To reinforce this, my understanding of the demand from the BRIC (Brazil, Russia, India and China) countries has always remained positive….. Full Article: Source

Posted on 26 January 2009 by VRS |  Email |Print

From AP: Withering cost cuts across the mining industry have left tens of thousands of people without jobs from the Arizona desert to the Andes - and there is a litany of evidence that the situation is growing worse.

International mining companies also have postponed or canceled projects and padlocked the gates to mines as consumers have cut spending on cars, jewelry and housing….. Full Article: Source

Posted on 26 January 2009 by VRS |  Email |Print

From Resourceinvestor.com: The power train technology in the Toyota Prius is the benchmark for the twenty-first century’s agenda to find an alternative energy system for passenger carrying vehicles.

The battery powered electric motor driven car, the external combustion engine (steam driven) car, and the internal combustion (diesel or gasoline engine fueled by liquid or gaseous hydrocarbons) driven car were all invented in the late eighteenth and nineteenth centuries, and the contest to determine which of these power trains would predominate to be mass produced in the twentieth century was won in stages by the internal combustion engine using primarily gasoline as a fuel….. Full Article: Source

Posted on 26 January 2009 by VRS |  Email |Print

From Times Online: What went wrong? The past few days should have been positive for the economy and the banking system but we were plunged into a mini-crisis.

I think I know. It is easy for pundits and opposition politicians to criticise but this is difficult stuff. Governments love precedent but there was not one here for, first, a rescue of the banking system and then measures to get damaged banks lending again….. Full Article: Source

Posted on 26 January 2009 by VRS |  Email |Print

From FT: Appetite for oil-based exchange traded commodities is rising as investors anticipate a rebound in global oil prices.

The market value of outstanding long oil ETCs, listed securities backed by a commodity, issued by ETF Securities surged to a record $670m (£490m, €522m) in the week ending January 16, a jump of $147m in just one week and the fastest rise since inception in 2005….. Full Article: Source

Posted on 26 January 2009 by VRS |  Email |Print

From Seekingalpha: The comfort hasn’t just appeared in the ETF indexes themselves, which are often influenced by the largest market-cap stocks; specifically, more individual utility stocks advanced rather than declined.

Similarly, more biotech stocks seem to be advancing than declining. And this has been taking place as the overall markets continue to test/retest the October/November lows….. Full Article: Source

Posted on 26 January 2009 by VRS |  Email |Print

From Reuters: India’s Multi-Commodity Exchange (MCX) will launch heating oil futures from Tuesday, its chief executive Joseph Massey said on Sunday.

“MCX has got permission from the regulator … and will launch heating oil futures from Jan. 27,” Massey told Reuters. “There will be monthly contracts with Mumbai as a delivery centre.”…. Full Article: Source

Posted on 26 January 2009 by VRS |  Email |Print

From Bloomberg: Corn rose for the second time in three days on speculation that hot, dry weather will reduce production in Argentina and Brazil, the two biggest exporters of the crops after the U.S.

Argentina’s corn harvest may drop as much as 40 percent to 12.5 million metric tons compared with 20.85 million last year and less than the U.S. government’s forecast for 16.5 million, the Buenos Aires Cereals Exchange said today. Crops in central Brazil are starting to suffer from a dry spell that already harmed plants in the south, the Agriculture Ministry said today….. Full Article: Source

Posted on 26 January 2009 by VRS |  Email |Print

From AP: China plans to raise the minimum state purchasing price for rice, the government’s planning agency said Saturday, aiming to boost farm incomes and encourage farmers to grow more grain.

The minimum purchasing price for rice will rise by an average of 16 percent this year, compared with an increase of 13 percent last year, the National Development and Reform Commission said in an announcement on its Web site….. Full Article: Source

Posted on 26 January 2009 by VRS |  Email |Print

From FT: Cocoa prices in London surged above £2,000 a tonne yesterday for the first time in almost 24 years. Liffe May cocoa futures, the market benchmark, jumped 2.9 per cent to £2,005 a tonne, the highest level since April 1985.

Cocoa gained more than 13.5 per cent on the week, helped by sterling’s weakness against the dollar and the euro, but also boosted by worries about low supplies from the Ivory Coast and Ghana, which together account for about 56 per cent of global cocoa production….. Full Article: Source

Posted on 26 January 2009 by VRS |  Email |Print

From FT: Chocolate prices in the shops are likely to rise further, hitting cash-strapped consumers, after wholesale cocoa prices in London jumped last week above the key £2,000 a tonne level for the first time in almost 24 years.

Premium chocolate brands, which typically use more cocoa, are likely to be the worst affected as any further rise in prices is expected to exacerbate the shift by consumers to cheaper brands to save money….. Full Article: Source

Posted on 26 January 2009 by VRS |  Email |Print

From Bloomberg: Sugar prices jumped to the highest in two months as India, facing a domestic shortfall of the sweetener, considered ways to relax rules on imports.

India, the world’s second-biggest sugar exporter, may purchase as much as 2 million metric tons this year, Adani Enterprises Ltd., the country’s biggest private trader of farm goods, said this week….. Full Article: Source

Posted on 26 January 2009 by VRS |  Email |Print

From Seekingalpha: Fears about the intensity of the global recession and renewed skepticism regarding the beleaguered financial sector fueled a flight to safety during the past holiday-shortened trading week.

President Obama’s inauguration offered only a brief respite from the dreadful economic and earnings data and pounding of the stock markets….. Full Article: Source

Posted on 26 January 2009 by VRS |  Email |Print

From Financialexpress.com: Financial services major UBS Investment Bank said it has entered into an agreement with crises-ridden insurance major American International Group to acquire its commodity index business for 150 million dollar.

The Swiss bank said in a statement that it has entered into a binding agreement to purchase the commodity index business of AIG Financial Products Corp, including AIG’s rights to the DJ-AIG Commodity Index….. Full Article: Source

Posted on 26 January 2009 by VRS |  Email |Print

From Goldseek.com: We are not going to belabor this point but it is deadly important. Private equity investors and professionals are pulling their money out of banks. A professional run on banks has begun.

If you have CDs or funds in banks that exceed six months of operating expenses remove them immediately. Your alternative is gold and silver related assets or Swiss franc Treasuries. If you need help email me or call 1-800-375-4188….. Full Article: Source

Posted on 26 January 2009 by VRS |  Email |Print

From Guardian: The International Monetary Fund (IMF) will cut its 2009 global growth forecast again, this time to between 1 percent and 1.5 percent, as economic conditions deteriorate further, an IMF official said on Sunday.

The IMF’s most recent forecast, made in November, was for growth of 2.2 percent. Since then, economic indicators have deteriorated to their worst levels in decades, with many of the world’s biggest industrial economies in recession….. Full Article: Source

Posted on 26 January 2009 by VRS |  Email |Print

From Bloomberg: Japan’s stock futures advanced after commodities prices and maritime shipping rates increased, boosting the outlook for shipping and materials companies.

U.S.-traded receipts of Mitsubishi Corp., Japan’s largest trading company, added 0.4 percent on Jan. 23 as oil prices surged to a two-week high and copper jumped 5.4 percent….. Full Article: Source

Posted on 26 January 2009 by VRS |  Email |Print

From Theglobeandmail.com: The final return numbers are in for 2008, and the average hedge fund loss was 12 per cent, according to Absolute Return magazine. Almost every strategy proved a loser in the dismal year that was, but a surprising result is that even though the commodity bubble burst hard, commodity fund managers managed to do okay.

Commodity Trading Advisors, a subspecies of commodity fund created by a regulatory quirk, finished the year with an average return of about 14 per cent, while straight commodity hedge funds eked out a 3.8 per cent return….. Full Article: Source

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