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Commodities Briefing 12.Feb 2009

Investing in commodities
A blast of energy and commodity stocks
Commodities hiring blows hot - and cold
Deep freeze for Canadian commodities
China's exports suffer sharpest fall in 13 years
Japan wholesale prices fall for first time in 5 years
U.S. trade gap narrows to $39.9 bln in December
A superpower commodity oversupply
Oil plummets on global demand report
Oil demand to fall at fastest rate since 1982
IEA cuts world oil demand forecast again
U.S. sees OPEC's 2009 oil exports back over $400 billion
Credit crunch 'hits oil industry'
Venezuela says OPEC could further reduce oil production, aims for $100 a barrel
Russia seeks to unlock $25 bln China oil loan talks
Petrobras to invest $26bln this year
Energy prices 'will be cut soon'
Coal industry to Obama: Friend or foe?
Alt energy not the answer, says Saudi oil minister
Oil industry ready to work on global warming
Carbon trading: Crisis creates bonanza for polluting firms
Challenges ahead for European power and carbon trading
‘A perfect storm brewing for gold'--BMO
Gold ETFs glitter, but fail to draw investors
Gold funds find favour with investors
Gold soars to six-month high on investor demand for a haven
Gold: nothing succeeds like success
Steel demand 'collapses': ArcelorMittal
Copper leads base metals lower as Chinese demand slides
Commodity ETFs: When will the trend come back?
Yen higher as investors seek safety in Japanese currency
Australian dollar gains on jobs data; New Zealand’s strengthens
Euro remains top traveller currency
Mobius backs growth in emerging markets
ICE writes down investment in NCDEX
Oil trades near $36 after bigger-than-expected jump in supplies

Posted on 12 February 2009 by VRS |  Email |Print

From Globalpensions.com: There are an increasing number of plan sponsors, foundations and endowments making strategic allocations to commodities. According to Standard & Poors (S&P), at the beginning of 2008, 78 US funds had positions in commodities.

Of the 70 funds that S&P provides details for, the total dollar value of all allocations was US$6.4bn, putting the average allocation at 2.7% of the funds under management….. Full Article: Source

Posted on 12 February 2009 by VRS |  Email |Print

From Barrons.com: The economic outlook may be bleak for the next year or so. But that reality obscures the long-term bull cycle for natural-resource investments, thanks to a rising global population and limited supplies.

Investors have already stepped into the valuation gap created by the collapse of commodity prices and related stocks in the second half of 2008. A number of oil, natural gas, coal and other natural-resource stocks have rebounded from lows touched late in the fourth quarter….. Full Article: Source

Posted on 12 February 2009 by VRS |  Email |Print

From Efinancialcareers.co.uk: This time last year, commodities desks were happily expanding as other areas of financial services talked about cut-backs. However, recent redundancy announcements have shown the sector isn’t entirely immune, but do some job opportunities still remain?

The good news is that business still appears to be going fairly well. In the latest round of increasingly dire quarterly reports, the likes of JPMorgan and Morgan Stanley reported strong or record performance in commodities….. Full Article: Source

Posted on 12 February 2009 by VRS |  Email |Print

From Minyanville.com: One of the worst places for performing markets on the planet over the last year is the TSX Venture Exchange. From a high of 2735 in May 2008 to its current 902 level, the TSX Venture Index has a chart only a Canadian could love.

This former penny-stock playground is now the Canadian boulevard of broken dreams. The vast majority of TSX Venture Exchange companies are junior mining companies created in response to the recent commodity bull market. In hockey parlance, the TSX Venture Exchange is the farm team….. Full Article: Source

Posted on 12 February 2009 by VRS |  Email |Print

From Telegraph: China’s exports dropped by 17.5pc in value in January, compared to January last year. Although the timing of the Chinese New Year holiday meant there were five fewer working days in January, the statistics were far worse than feared. In terms of value, exports have nearly halved since last year.

Imports into China fell by a record 43.1pc in value, although the price of oil and other commodities may explain part of the drop….. Full Article: Source

Posted on 12 February 2009 by VRS |  Email |Print

From Bloomberg: Japan’s wholesale inflation dropped for the first time in more than five years as the global recession lowered the cost of oil and commodities.

Producer prices, the costs companies pay for energy and raw materials, fell 0.2 percent in January from a year earlier, the first decline since December 2003, the Bank of Japan said in Tokyo today….. Full Article: Source

Posted on 12 February 2009 by VRS |  Email |Print

From Industryweek.com: For the third consecutive month, the trade deficit narrowed to $39.9 billion in December, the Commerce Department reported on Feb. 11.The trade deficit fell 4.1% from $41.6 billion in November. The December gap of $39.9 billion was the smallest deficit since February 2003.

For the full-year 2008, the U.S. trade deficit fell 3.3% to $677.1 billion from the prior year. It was the second year in a row the shortfall has narrowed, after a decline of 7% in 2007. The last time there was a back-to-back annual decline was in 1990-1991….. Full Article: Source

Posted on 12 February 2009 by VRS |  Email |Print

From Fool.com: It seems that the U.S. and Russia share a common condition these days: an overabundance of natural gas. Indeed, as recently as five years ago, it appeared that natural gas demand in the U.S. was growing rapidly, and prices were climbing to such an extent that then-Fed Chair Alan Greenspan announced that he expected the U.S. to soon become a major importer of liquefied natural gas (LNG).

Unfortunately for those who invested on Mr. Greenspan’s belief, today’s world looks much different….. Full Article: Source

Posted on 12 February 2009 by VRS |  Email |Print

From : CNNMoney.com: Oil prices plummeted Wednesday after an international report said global demand for crude will continue to fall in 2009, re-igniting oversupply concerns.

The International Energy Agency reduced its predictions for demand to fall 84.7 million barrels per day in 2009, according to the monthly report….. Full Article: Source

Posted on 12 February 2009 by VRS |  Email |Print

From FT: Demand for oil will fall this year at the fastest rate since 1982, the International Energy Agency has forecast.

The rich countries’ energy think-tank has again cut sharply its prediction for world oil demand this year, and now expects it to average 84.7m barrels per day, down 1m b/d from last year, because of the steep downturn in the world economy….. Full Article: Source

Posted on 12 February 2009 by VRS |  Email |Print

From AFP: The International Energy Agency cut its forecast again for global oil demand this year on Wednesday, but warned about a future supply crunch because of current low investment levels.

The energy watchdog for industrialised nations forecast that global oil demand would measure 84.7 million barrels per day (bpd) on average in 2009 — 570,000 bpd less than its last forecast made in January….. Full Article: Source

Posted on 12 February 2009 by VRS |  Email |Print

From Reuters: The prospect for higher crude oil prices later in the year will boost OPEC’s oil export revenues above $400 billion for 2009, the U.S. government’s top energy forecasting agency said on Wednesday.

The U.S. Energy Information Administration revised up its estimate for OPEC’s oil export earnings for this year to $402 billion, about $15 billion more than the agency forecast last month….. Full Article: Source

Posted on 12 February 2009 by VRS |  Email |Print

From BBC: The banking crisis is going to hit exploration and development in the oil industry over the next 12 to 18 months, a report has warned. Oil and Gas UK blamed the situation on a combination of low oil prices and the freezing of capital markets.

The assessment comes after a survey of 75 companies. The organisation called for the industry and government to act….. Full Article: Source

Posted on 12 February 2009 by VRS |  Email |Print

From AP: Venezuela would like to see oil prices hit $100 a barrel and wants OPEC to further reduce oil production, officials said Wednesday.

Planning Minister Haiman El Troudi said that Venezuela is aiming for $100 a barrel, which would allow President Hugo Chavez to easily meet budget obligations and continue pumping billions of dollars into social programs for Venezuela’s poor….. Full Article: Source

Posted on 12 February 2009 by VRS |  Email |Print

From Reuters: A high-level Russian state delegation will travel to China next week in a bid to unlock a $25 billion loan that Moscow is seeking from Beijing as part of a bigger oil supply deal, two industry sources said.

China is considering lending the money to Russian state-controlled oil major Rosneft and pipeline monopoly Transneft in exchange for securing supplies for 20 years….. Full Article: Source

Posted on 12 February 2009 by VRS |  Email |Print

From AP: Brazil’s state-run oil company says it will invest about $26 billion this year. The president of Petrobras, Sergio Gabrielli, says the majority of those investments are destined for newly discovered offshore oil fields.

Up to 80 billion barrels of oil are thought to be in those fields, a figure that could make Brazil a top exporter of oil….. Full Article: Source

Posted on 12 February 2009 by VRS |  Email |Print

From BBC: Executives from major energy firms yet to cut prices in 2009 have said they are “optimistic” that gas and electricity bills will fall soon.

But senior figures from EDF Energy, E.On and Scottish Power did not tell MPs when such moves would be made, and Npower was non-committal on cuts….. Full Article: Source

Posted on 12 February 2009 by VRS |  Email |Print

From Reuters: President Obama appears committed to developing clean coal technology and his administration might not be as opposed to the fossil fuel as the industry feared, analysts and mining experts say.

Coal producers, blamed by environmentalists for causing global warming through carbon emissions, were wary of a new administration pledging to advance alternative energy sources….. Full Article: Source

Posted on 12 February 2009 by VRS |  Email |Print

From Forbes: Saudi Arabia’s oil minister, Ali Ibrahim al-Naimi, in a speech Tuesday night issued a warning against overzealous boosterism of non-fossil fuel energy sources in a time when oil prices have become “unsustainably” low.

“Promoting alternatives could chill investment in the oil sector,” he said, in a dinner address to the CERAWeek energy conference in Houston. “It would be a nightmare if alternatives don’t meet expectations.”…. Full Article: Source

Posted on 12 February 2009 by VRS |  Email |Print

From Nytimes.com: Confronted with a sharp change of priorities in Washington, international oil executives are expressing an eagerness to work with President Obama to fashion new policies to tackle global warming.

At an industry conference here this week, the executives struck a conciliatory tone on how to limit the emissions that are contributing to climate change, with many of them sounding like budding conservationists as they stressed energy efficiency and the need to develop renewable fuels….. Full Article: Source

Posted on 12 February 2009 by VRS |  Email |Print

From Socialistparty.org.uk: The hope of the bureaucrats who devised a European carbon permit trading system to tackle global warming was that polluting firms would have to pay for their anti-social actions, so letting ‘market forces’ encourage green behaviour.

However, due to the crazy market system, it is now clear that the worst environmental culprits, far from being made to pay up, are actually being paid by us to continue polluting….. Full Article: Source

Posted on 12 February 2009 by VRS |  Email |Print

From Jcis.com: Production cuts in the European manufacturing sector are making it cheaper for the industry to emit carbon dioxide (CO2), as demand for pollution rights - EU Allowances (EUAs) and Certified Emission Reductions (CERs) - falls.

As economic sentiment plunges towards record lows, according to EU figures, some of the largest companies in the world, in the chemicals, steel, cement and pulp and paper sectors, are idling plants to save costs….. Full Article: Source

Posted on 12 February 2009 by VRS |  Email |Print

From Mineweb.com: BMO Capital Markets predicted that gold will be a strong performer for at least the next three years. BMO Research forecasts gold to average US$925/oz in the second half of this year and in 2010 with spikes “likely easily topping US$1,000/z next year.

However, H1/09 is expected to be weaker with a trend around US$850/oz.”…. Full Article: Source

Posted on 12 February 2009 by VRS |  Email |Print

From Business-standard.com: Investors globally have found solace in gold in the last one year when major world economies slipped into recession.

Sample this: According to World Gold Council data, investment by exchange traded funds (ETFs) in gold was 150 tonnes in the third quarter (July to September-end)….. Full Article: Source

Posted on 12 February 2009 by VRS |  Email |Print

From Indiatimes.com: Gold has been a safe investment and now gold exchange traded funds (ETFs) are gaining popularity among investors in India.

Gold ETFs are passively managed mutual fund schemes under which the investors can buy and sell gold on the exchange….. Full Article: Source

Posted on 12 February 2009 by VRS |  Email |Print

From Bloomberg: Gold jumped to a six-month high as investors sought a safe harbor in precious metals on concern that the U.S. government’s plan to rescue banks may fail to revive the economy. Silver and platinum jumped to four-month highs.

The Standard & Poor’s 500 Index fell 4.9 percent yesterday after Treasury Secretary Timothy Geithner sketched out a $2 trillion plan to fix the financial system that left many unanswered questions about its mechanics….. Full Article: Source

Posted on 12 February 2009 by VRS |  Email |Print

From Mineweb.com: Listed gold stocks continue to lead the attempted recovery in global stock markets, supported on Wednesday by a dollar gold bullion price that moved to seven-month highs, above USD 945 an ounce.

Measured on an absolute basis, the market value of gold stocks listed around the world moved to well above USD 200bn, the highest level seen since October 2008, a month after erstwhile Wall Street investment bank Lehman Bros. filed for bankruptcy, triggering yet another stage of the most intense crisis in world credit and equity markets seen in decades….. Full Article: Source

Posted on 12 February 2009 by VRS |  Email |Print

From Thewest.com.au: ArcelorMittal, the world’s biggest steel group, reported a huge loss on Wednesday for the last quarter of 2008 and said it would slash production and jobs this year as demand plummets.

For the final three months of 2008, the group reported an operating loss of $US3.5 billion ($A5.35 billion) on falling demand and writedowns on stock in contrast to an operating profit of $US3.3 billion ($A5.04 billion) in the equivalent period of 2007….. Full Article: Source

Posted on 12 February 2009 by VRS |  Email |Print

From Theaustralian.news.com.au: Copper led base metals lower overnight after a slide in Chinese copper imports reignited fears about falling demand.

Further downside pressure stemmed from further investor disappointment over the lack of detail in Tuesday’s US financial rescue plan, traders said….. Full Article: Source

Posted on 12 February 2009 by VRS |  Email |Print

From Seekingalpha.com: In May 2008, commodities and their related exchange traded funds (ETFs) were booming. Oil and gold seemed unstoppable; food prices were causing people to hoard rice and it wasn’t unusual to see someone softly crying while they filled up their gas tank.

We wrote a report back then, which thoroughly covered the commodities area, from the broad-based funds to the single commodities. From that report, many commodities went on to hit record highs….. Full Article: Source

Posted on 12 February 2009 by VRS |  Email |Print

From Guardian: The yen rose against major currencies in safe-haven trades on Thursday, as investors avoided risk as Japanese stock prices fell on disappointment over financial rescue plans in the United States.

The yen was well-bid as a lower Nikkei stock average prompted Japanese investors returning from a public holiday on Wednesday to seek safety in the currency….. Full Article: Source

Posted on 12 February 2009 by VRS |  Email |Print

From Bloomberg: The Australian dollar rose for the first time in three days after employers unexpectedly added full- time workers last month, signaling the economy may avoid a recession. New Zealand’s currency advanced.

Australia’s currency also gained against Japan’s yen, halting a two-day loss, after the statistics bureau report showed the number of people employed climbed 1,200….. Full Article: Source

Posted on 12 February 2009 by VRS |  Email |Print

From Travelbite.co.uk: Despite the weakened pound, the euro and the US dollar continue to be the top currencies for UK travellers, according to the latest figures from International Currency Exchange (ICE). As the snow falls across the UK, ICE reveals the top 20 currencies for travellers in January.

“The top four currencies remain unchanged in January, while the number of orders received on our online currency service is up 28 per cent compared to December 2008,” confirmed Andrew Hamilton, head of marketing for ICE….. Full Article: Source

Posted on 12 February 2009 by VRS |  Email |Print

From Superreview.com.au: One of the leading experts on emerging markets, Franklin Templeton executive chairman Mark Mobius, has predicted that emerging markets and the so-called BRIC (Brazil, Russia, India, and China) economies will continue to be substantial drivers for investment returns.

Commenting on the adverse markets of 2008 and the outlook for 2009, Mobius said he expected emerging markets would continue to display relatively strong fundamental characteristics and record faster growth rates than their developed counterparts….. Full Article: Source

Posted on 12 February 2009 by VRS |  Email |Print

From Thehindubusinessline.com: Atlanta-based Intercontinental Exchange (ICE) has made a $16-million charge to write down in the value of its 8 per cent stake in the National Commodity and Derivatives Exchange of India.

ICE picked up ICICI’s 8 per cent stake in NCDEX at $37 million in 2006. NCDEX received a valuation of a little less than $500 million when ICICI Bank — one of the original and leading investors in the commex — sold its stake to ICE. …. Full Article: Source

Posted on 12 February 2009 by VRS |  Email |Print

From Bloomberg: Crude oil traded near $36 a barrel after dropping to the lowest in four weeks yesterday as a U.S. government report showed a bigger-than-expected increase in inventories.

Supplies rose 4.72 million barrels to 350.8 million barrels last week, the Energy Department said….. Full Article: Source

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