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Commodities Briefing 19.Feb 2009

Posted on 19 February 2009 by VRS |  Email |Print

From Telegraph.co.uk: The world’s fund managers have begun to glimpse the first green shoots of recovery and are betting that a powerful rebound in China will revive demand for commodities and lead global industry out of slump.

The latest Merrill Lynch survey of investors shows the highest level of optimism since the credit crunch began, fuelled by tentative hopes that the global cycle is slowly starting to turn….. Full Article: Source

Posted on 19 February 2009 by VRS |  Email |Print

From FT: Goldman Sachs, Wall Street’s largest commodities dealer, yesterday told clients to bet on falling returns from commodities, including crude oil, warning that the shape of the futures curve will trigger further losses to investors in the asset class.

The shape of the futures curve is crucial to the profitability of commodities indices. In addition to the spot return, commodity index investors obtain a separate return – the roll yield – as they roll trades over each month, just before the futures contract expires. …. Full Article: Source

Posted on 19 February 2009 by VRS |  Email |Print

From Dailyreckoning.com.au: Commodities are now beginning to be appreciated and understood by investors. After all, they are the key to the financial world. Friends and family tell me that they don’t follow commodities but always want to discuss investing.

After a few minutes of conversation they make the connection to oil, interest rates, gold and the value of the dollar - and as this year is proving once again everything hinges on commodities….. Full Article: Source

Posted on 19 February 2009 by VRS |  Email |Print

From IHT: Despite falls in the prices of oil and other commodities since last summer, the pressure to limit the role of investors in commodity markets is intensifying in the United States, not abating.

And the administration of President Barack Obama has found itself being pushed further down this road than it might choose….. Full Article: Source

Posted on 19 February 2009 by VRS |  Email |Print

From Commodityonline.com: The economic downturn has hit almost all major commodities except gold which is seen as a safe haven investment in times of crisis.

Despite the stimulus packages announced by OECD and emerging economies, the prevailing mood is one of fear and anxiety as base metals and energy sector whose recovery depends to a greater extent on stimulus packages continues to be hit by subdued sentiments….. Full Article: Source

Posted on 19 February 2009 by VRS |  Email |Print

From FT: Despite the flat price weakness on crude oil, the contango on the expiring spread continues to narrow, in a pattern very similar to the previous expiry. The convergence of the expiring contract is now being done pre-expiry on a narrowing of the spread rather than post-expiry on a flat price basis.

This re-enforces our view that the extreme contango on the WTI contract is primarily due to market distortions created by the USO WTI ETF. This cancer to the oil markets is however not yet over as positions in the USO were increased further yesterday and now reach 93′000 WTI April Futures contract….. Full Article: Source

Posted on 19 February 2009 by VRS |  Email |Print

From Forbes: Venezuela says OPEC could slash oil production in March with the aim of pushing world crude prices back up toward $70 a barrel.

Oil Minister Rafael Ramirez says the 13-member cartel has been unable to stabilize prices because the market is still oversupplied….. Full Article: Source

Posted on 19 February 2009 by VRS |  Email |Print

From Bloomberg: Crude oil traded below $35 a barrel in New York after an industry-funded report showed that U.S. stockpiles climbed amid falling fuel demand.

The American Petroleum Institute said yesterday that inventories rose 1.6 million barrels last week to 345.8 million barrels….. Full Article: Source

Posted on 19 February 2009 by VRS |  Email |Print

From Reuters: U.S. Energy Secretary Steven Chu said on Wednesday he will encourage OPEC to promote stable crude oil prices, as the producer group prepares for its March 15 meeting.

“Price stability for oil prices is good around the world. Every country would want price stability,” Chu said in telephone conference call with reporters. “Certainly, you know, I can do what I can do to encourage OPEC countries to promote price stability.”…. Full Article: Source

Posted on 19 February 2009 by VRS |  Email |Print

From Reuters: After oil prices crashed to $10 (seven pounds) a barrel in 1998, they more than tripled two years later as lower investment and higher demand strained supply.

The signs are the industry, now reeling from a $100 crash, is still locked in a cycle of boom and bust….. Full Article: Source

Posted on 19 February 2009 by VRS |  Email |Print

From FT: Gold surged towards the $1,000 mark on Wednesday as concerns about the global economy led investors to look for a safe haven while European crude oil prices sank below the $40-a-barrel mark for the first time this year .

Gold reached a fresh seven-month high of $984.65 a troy ounce, up 1.6 per cent on the day, with strong investor inflows into exchange traded funds making a challenge on the record $1,030.80 set in March look increasingly likely. …. Full Article: Source

Posted on 19 February 2009 by VRS |  Email |Print

From Industrysearch.com.au: Oil prices tumbled Tuesday along with equities markets as investors worried about weakening energy demand in a stalling global economy.

New York’s main futures contract, light sweet crude for delivery in March, sank to 34.93 dollars a barrel, down 2.58 dollars from its close Friday….. Full Article: Source

Posted on 19 February 2009 by VRS |  Email |Print

From Reuters: By opening its first LNG plant and sealing a 20-year oil supply deal with China, Russia has taken huge steps this week toward its long-held aim of expanding its influence in Asia’s hungry energy markets.

To cement this role, Moscow may still need the help of international partners with the expertise to develop complex oil and gas projects and the financial clout — especially in the case of China and Japan — to drive such plans to conclusion….. Full Article: Source

Posted on 19 February 2009 by VRS |  Email |Print

From IHT: Call it planning ahead. While China’s exports plunge and millions of laid-off workers hunt for jobs, the country’s big state companies are spending billions of dollars securing access to oil and other scarce resources the country will need in coming decades.

The $25 billion energy agreement signed late Tuesday by China and Russia was the biggest of several deals signed this month, with state financial backing, that are expanding Beijing’s overseas resources base at a time when most banks elsewhere are not lending and most governments are barely scraping by….. Full Article: Source

Posted on 19 February 2009 by VRS |  Email |Print

From Reuters: Already trapped in a tailspin as earnings plunge and a global recession curtails passenger and freight traffic, Asian airlines face yet another challenge — figuring out how to pay for their greenhouse gas emissions.

Green groups, governments and passenger bodies are piling on the pressure for airlines to rein in carbon pollution, and to have their emissions included in a broader U.N. climate pact….. Full Article: Source

Posted on 19 February 2009 by VRS |  Email |Print

From Reuters: Australia’s Climate Change Minister Penny Wong said on Thursday the government remained committed to its carbon trading plans, despite growing calls for the scheme to be reconsidered or replaced with a carbon tax.

Australia has promised to introduce carbon trading in July 2010 as part of its efforts to fight global warming and cut greenhouse gas emissions by at least 5 percent by 2020….. Full Article: Source

A SQUARE’s report on recent webinar on carbon-led investing - with voice-over (which non-A SQUARE subscribers can purchase individually) can be accessed here:
http://www.opalesque.com/asquare/509/Webinar_Carbon_Led_Investing.html

Posted on 19 February 2009 by VRS |  Email |Print

From Nationalpost.com: Stephen Harper and Barack Obama have both said they are open to the idea of a common “template” when it comes to energy and the environment.

But what if the plan Mr. Obama raises Thursday is a carbon tax, an idea Mr. Harper dismissed as an “economic catastrophe” that would “screw everybody” when it was proposed by Liberal leader, Stéphane Dion, during last fall’s federal election?…. Full Article: Source
A SQUARE’s report on recent webinar on carbon-led investing - with voice-over (which non-A SQUARE subscribers can purchase individually) can be accessed here:

http://www.opalesque.com/asquare/509/Webinar_Carbon_Led_Investing.html

Posted on 19 February 2009 by VRS |  Email |Print

From FT: Investors in Europe and North America went on an extraordinary shopping spree for gold coins and bars in the final quarter of last year, snapping up 148.5 tonnes, a jump of 811 per cent compared with the same period in 2007, as the collapse of Lehman Brothers led a massive increase in safe haven buying.

This rush into physical gold by western investors pushed global retail investment up almost 400 per cent to 304.2 tonnes, according to the industry-backed World Gold Council, which released its fourth-quarter Gold Demand Trends report on Wednesday….. Full Article: Source

Posted on 19 February 2009 by VRS |  Email |Print

From Thisismoney.co.uk: Gold has proved a winner for investors in recent years. We explain the best ways to invest in gold through funds, Exchange Traded Commodities (ETCs), bullion and coins

Gold was the clear winner again in 2008 - trouncing all other asset classes for the second consecutive year and the third time since 2005. …. Full Article: Source

Posted on 19 February 2009 by VRS |  Email |Print

From Reuters: Gold firmed to a fresh seven month high in Europe on Wednesday as investors spooked by the outlook for the financial system bought gold and bullion-backed exchange-traded funds as a safe store of value.

Holdings of the world’s largest gold-backed ETF, the SPDR Gold Trust, leapt to a record high above 1,000 tonnes on Tuesday as fears of a deepening global recession and the prospect of inflation fuelled buying….. Full Article: Source

Posted on 19 February 2009 by VRS |  Email |Print

From Reuters: Gold edged closer to $1,000 an ounce on Wednesday, appealing to more people as a store of value, while other commodities from oil to grains were pressured by a weak economy and strong dollar.

“We believe this is purely a flight to safety, with people desperate to put their money somewhere they can get liquidity and get their money back,” said Daniel Smith, analyst at London’s Standard Chartered, referring to gold….. Full Article: Source

Posted on 19 February 2009 by VRS |  Email |Print

From Bi-me.com: Gold for April delivery surged in Dubai Wednesday to set a new record of US$974.7 on the Dubai Gold and Commodities Exchange, the highest since the Exchange began trading in 2006.

The precious metal, which is on a record setting spree for the last few sessions, shot up by US$ 5.50 in early trading compared to yesterday close, in tandem with the continuous rise of gold in global markets….. Full Article: Source

Posted on 19 February 2009 by VRS |  Email |Print

From FT: Gold holdings at the world’s largest bullion-backed exchange-traded fund jumped above 1,000 tonnes for the first time, the latest indication of investor demand for bullion amid increasing financial turbulence and economic slump.

The SPDR Gold Trust holdings have risen 228.6 tonnes so far this year, to a record 1,008.8 tonnes late on Tuesday, absorbing in the first seven weeks of the year about 10 per cent of the world’s annual mine gold output. …. Full Article: Source

Posted on 19 February 2009 by VRS |  Email |Print

From Mineweb.co.za: The numbers for 2008 are in, and we can now quantify just how rough the year was for commodity spot markets. So far in 2009, the results are much better, though that’s not the case across the board.

Out of our basket of 14 hard and soft commodities, only coal and gold finished 2008 in positive territory. Coal was up 12.6 percent due to a relatively strong first half of the year, while gold rose nearly 6 percent during the year as many investors concerned about rapidly devaluing assets fled to a safe haven….. Full Article: Source

Posted on 19 February 2009 by VRS |  Email |Print

From Hardassetsinvestor.com: Pure antimony metal is silver gray/white and brittle. Although actually a metal antimony is also termed a metalloid. (A metalloid displays the characteristics of both a metal and a non-metal.) In addition, it has four allotropes (see Gallium: A Slippery Metal), of which two (yellow antimony and black antimony) are neither stable nor metallic.

Indeed, yellow antimony, which only occurs at temperatures below -80°C, is extremely explosive!…. Full Article: Source

Posted on 19 February 2009 by VRS |  Email |Print

From Forbes: Aluminium fell to its lowest level since October 2002 on Wednesday, as concerns over dwindling demand were reinforced by further bad news for the car industry and a rise in inventories to record levels.

However, copper rose as physical stocks of the metal posted their first big fall since October….. Full Article: Source

Posted on 19 February 2009 by VRS |  Email |Print

From Resourceinvestor.com: China has recently become very active in seeking out what at first impression look to be resources of just “base metals” in developed countries such as Australia and Canada and by aggressively buying into or enlarging existing positions in one of the world’s largest mining conglomerates, London and Melbourne based Rio Tinto plc

I have been trying to sound an alarm for years about the critically short supply of technology metals, almost all of which are byproducts of base metal mining, or the mining of relatively abundant metals; even if some of them, such as titanium, are not as easily produced as the classical base metals….. Full Article: Source

Posted on 19 February 2009 by VRS |  Email |Print

From AFP: Concern was increasing in the European Union Wednesday over currency turbulence in eastern Europe nations hard-hit by the economic crisis, as Hungary revived calls for a massive EU aid plan.

The European Commission said it was concerned by the volatility of eastern European currencies, several of which have fallen sharply in recent days amid fears of capital flight….. Full Article: Source

Posted on 19 February 2009 by VRS |  Email |Print

From Theage.com.au: The Australian dollar was higher at noon after Japanese yen selling helped push the currency back above $US0.6400.

The dollar was recently trading at $US0.6407/12, up from Wednesday’s close of $US0.6399/02….. Full Article: Source

Posted on 19 February 2009 by VRS |  Email |Print

From Theoptionsinsider.com: How do investors and traders cope with a market that has fallen more than 40% in just one year and survive until greener pastures return?

Many traders have lived to tell the tale by trading both the long and short sides, or by taking a longer-term inverse (contra) Exchange-Traded Funds (ETFs) as a portfolio hedge. And it’s the contras that have insulated them against the big slides….. Full Article: Source

Posted on 19 February 2009 by VRS |  Email |Print

From Bankinvestmentconsultant.com: Fee-based financial planners are keen on exchange-traded funds. As investors move to fee-based financial planners, rather than those paid per transaction, those planners have become more comfortable recommending exchange-traded funds, according to Strategic Insight.

And as a result, ETF sales will grow by more than 50% over the next year years, catapulting the $725 million industry to more than $1 trillion, Strategic Insight predicts….. Full Article: Source

Posted on 19 February 2009 by VRS |  Email |Print

From Reuters: The Shanghai Futures Exchange, China’s sole metals futures bourse, plans to kick off steel-product futures trading next month to provide a hedge to the world’s largest steel-making country.

The exchange, also the largest of China’s three futures-trading platforms in terms of volume, plans to start the new contracts on March 9, brokers familiar with the situation said on Wednesday….. Full Article: Source

Posted on 19 February 2009 by VRS |  Email |Print

From Alibaba.com: Energy, metals and grains prices plunged on Tuesday, sending a key commodities benchmark to 6-1/2-year lows, as investors became increasingly worried about the world’s failing fight against recession.

The Reuters-Jefferies CRB index, which tracks commodity futures across 19 markets, fell 4.6 percent to its lowest level since June 2002 as raw materials other than gold fell with stocks. Gold prices hit 7-month highs as investors sought a safe store of value….. Full Article: Source

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