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Commodities Briefing 24.Mar 2009

Posted on 24 March 2009 by VRS |  Email |Print

From Bloomberg: Michael Aronstein, the strategist who predicted last year’s commodities collapse, is putting 20 percent of the money he manages into raw materials in a bet that prices have bottomed.

Aronstein started buying metals, agriculture and energy futures this month for the $115 million fund he helps manage at Oscar Gruss & Son Inc. in New York…..Full Article: Source

Posted on 24 March 2009 by VRS |  Email |Print

From Reuters: Hedge fund interest in commodities has been cyclical despite the recent rebound in oil, metals and grains prices and there is no evidence fund managers are pouring money into the sector like a year ago, a senior broking official at Swiss bank UBS said on Monday.

“There’s been a tremendous amount of interest in precious metals, in agriculture and energy — but it’s been cyclical,” said Alex Ehrlich, UBS’s global head of prime broking services, speaking at the Reuters Private Equity and Hedge Funds Summit in New York…..Full Article: Source

Posted on 24 March 2009 by VRS |  Email |Print

From Business-standard.com: Commodity markets in the developing nations, hit by the global slowdown, may see a revival of demand in a quarter or two due to the measures taken by various governments across the world to counter the recession, says brokerage house Karvy Comtrade.
“One can expect revival of demand for commodities in a quarter or two due to the proactive measures by central banks across the world to counter the recession,” the Hyderabad-based brokerage house said in its monthly report…..Full Article: Source

Posted on 24 March 2009 by VRS |  Email |Print

From Forbes: A U.S. plan to help purge banks of toxic assets helped key commodities like oil and copper soar alongside equities Monday as investors bought into such raw materials anticipating inflation.

Prices of gold, the safe haven investors count on in times of trouble, fell as the appetite for risk-taking grew…..Full Article: Source

Posted on 24 March 2009 by VRS |  Email |Print

From IHT: Chinese shares climbed Monday for a sixth straight session on higher commodity prices and hopes a weaker U.S. dollar might help exporters.

The benchmark Shanghai Composite Index gained 44.39 points, or 2 percent, to close at 2325.48. The Shenzhen Composite Index for China’s smaller second exchange jumped 2.3 percent to 769.35…..Full Article: Source

Posted on 24 March 2009 by VRS |  Email |Print

From Commodityonline.com: At the time of writing this piece, India’s BSE Sensex has climbed by 313 points or 3.50 percent to 9,273 while much of the last week it was struggling to overcome the 9000 level resistance.

On the other hand there was plenty of cheerful news on the commodities front. India’s leading commodity bourse, MCX recorded its highest ever daily turnover of 32,000 crore plus largely aided by rising interest in gold and crude oil…..Full Article: Source

Posted on 24 March 2009 by VRS |  Email |Print

From BBC: Global trade flows are set to shrink by 9% during 2009, according to a forecast by the World Trade Organization (WTO). Hardest hit will be developed nations, where trade is set to fall 10%. Poorer countries will see exports fall 2-3%.

The WTO blames the deepening recession for the downturn, but says trade could be “a potent tool” for recovery. It would be the biggest drop in trade since World War II, said WTO Director-General Pascal Lamy, who called on global leaders to fight protectionism…..Full Article: Source

Posted on 24 March 2009 by VRS |  Email |Print

From Sovereignsociety.com: Crude oil prices recently hit a bottom in this bear market at $33.87 and prices are up 15% since the beginning of the year. That’s a bullish sign for commodity bulls who received a much needed price jolt last week following the dollar’s big decline.

OPEC has also been busy cutting supplies, mainly Saudi Arabia and, to a lesser extent, Russia, a non-OPEC member. But will depressed natural gas prices follow suit?….Full Article: Source

Posted on 24 March 2009 by VRS |  Email |Print

From Guardian: The question that plagues those of us who support the idea of a green new deal is this: where will the money come from? The proposal seems sound enough: as the world economy contracts, governments create millions of new jobs by investing in environmental measures.

We’ll need a massive carbon army to insulate and improve houses, build renewable power plants and manufacture energy-efficient devices. In principle it appears to solve two problems at once…..Full Article: Source

Posted on 24 March 2009 by VRS |  Email |Print

From Guardian: Barack Obama today declared the billions of dollars he is planning to spend on renewable energy projects off-limits to the usual bartering over the next few weeks with Congress.

The president, on the first day of a week-long blitz aimed at selling his ambitious $3tn (£2tn) spending budget, said the $129bn allocated for encouraging the use of solar power, hybrid cars and renewable energy projects would not be subject to any of the usual wheeling and dealing between the White House and Congress…..Full Article: Source

Posted on 24 March 2009 by VRS |  Email |Print

From Indiatimes.com: Oil has convincingly broken the $50-barrel resistance and the contango — the premium that a far month contract quotes to the front month because traders are willing to store oil for a better price in the future — has narrowed to over 3% (at 3 pm local time) on commodity bourse MCX.

However, momentum traders — who buy and sell a commodity at predetermined levels — are hoping a situation that prevailed in December presents itself again in the event of oil failing to breach the next resistance of $55…..Full Article: Source

Posted on 24 March 2009 by VRS |  Email |Print

From Hardassetsinvestor.com: The price for a one-time open market transaction for immediate delivery of a specific quantity of product at a specific location where the commodity is purchased “on the spot” at current market rates.

The spot price is relatively unimportant in global oil markets. Most refiners purchase oil with the help of long-term contracts, either one-off privately negotiated contracts or contracts from an exchange…..Full Article: Source

Posted on 24 March 2009 by VRS |  Email |Print

From Reuters: Without a sustained rise in oil prices, Venezuela’s economy will stall or contract this year, especially after the spending cuts socialist President Hugo Chavez announced at the weekend.

Chavez’s liberal use of soaring oil revenues, soft credits and lower sales tax has endeared him to poorer supporters and fed a consumer boom in recent years.
http://www.reuters.com/article/GCA-Oil/idUSTRE52M7QT20090323″ target=”_blank”>Source

Posted on 24 March 2009 by VRS |  Email |Print

From Reuters: Global oil demand in 2009 is expected to fall off by 1.7 million barrels per day (bpd) due to the economic recession, said Alan Gelder, vice president of downstream oil with consultant Wood Mackenzie.

That compares with a forecast from the U.S. Energy Information Administration for a drop in global oil demand of 1.38 million bpd in 2009…..Full Article: Source

Posted on 24 March 2009 by VRS |  Email |Print

From WSJ: So has oil definitely bottomed out? Crude oil futures in New York rose 3% to $53.79, their highest level since the end of November. And that comes a week after OPEC opted against further output cuts, a move plenty of people—including OPEC heavyweights—figured would send crude prices tumbling again.

What’s behind the crude rally? A host of factors. OPEC didn’t announce additional cuts, but has shown unusual discipline in enforcing its existing production cuts…..Full Article: Source

Posted on 24 March 2009 by VRS |  Email |Print

From Abc.net.au: The overwhelming allure of finding a cost-effective approach to solving the critical global environmental problem of climate change led to the adoption of market mechanisms under the international Kyoto Protocol.

The Commonwealth Government, in turn, has elected to harness the legal innovation of the tradeable emissions unit, within a capped carbon trading system, to reduce our national emissions and avoid dangerous climate change…..Full Article: Source

Posted on 24 March 2009 by VRS |  Email |Print

From Businessgreen.com: The push to impose a floor price on carbon credits gained fresh momentum today with the release of a new report from PricewaterhouseCoopers which argues that a so-called “hybrid” carbon tax-and-trade scheme would provide firms with the certainty they require to invest in low-carbon technologies.

The report assesses the merits of various carbon pricing mechanisms and concludes that there is a strong case for a hybrid model that combines the flexibility of cap-and-trade schemes with the certainty of a carbon tax by imposing a floor and ceiling price on carbon allowances…..Full Article: Source

Posted on 24 March 2009 by VRS |  Email |Print

From FT: Steelmakers and power companies will pay substantially less for coking and thermal coal from April 1 after the first deals in the annual negotiations settled for a price cut of up to 60 per cent.

The reduction is the first for the annual contracts since 2003 and signals further pressure for a large price drop in iron ore prices, which are being negotiated between Chinese steelmakers and global miners, Vale of Brazil, Rio Tinto and BHP Billiton…..Full Article: Source

Posted on 24 March 2009 by VRS |  Email |Print

From IHT: Renewed buying on Wall Street sapped some of the recent demand for gold on Monday. The precious metal fell moderately, while energy futures rose.

Gold prices declined amid increased appetite for risk on Wall Street as investors cheered the administration’s latest steps to help troubled banks…..Full Article: Source

Posted on 24 March 2009 by VRS |  Email |Print

From Ninemsn.com.au: Gold steadied on Tuesday as investors took a more than 1 percent fall the previous day on renewed hopes for the U.S. banking sector as an opportunity to buy gold back, keeping prices stuck in a narrow range.
Gold was at $941.15 per ounce, up 0.4 percent from New York’s notional close on Monday. Gold fell more than 1 percent on Monday as investors moved away from safe-haven investments amid a rally on Wall Street sparked by a U.S. government plan to help purge banks of their toxic assets…..Full Article: Source

Posted on 24 March 2009 by VRS |  Email |Print

From Commodityonline.com: The S&P Goldman Sachs Commodity Index grew 8.8% last week on the back of decline in the US Dollar against all major currencies. EURO, the single largest constituent of the US Dollar index, rose from 1.297 to a high of 1.3737 on Thursday.

The weakness in the USD prompted a rally in the commodities across the board which led to Gold touching a high of $967 yesterday from an intra week low of $882…..Full Article: Source

Posted on 24 March 2009 by VRS |  Email |Print

From Morningstar.ca: February was another brutal month to be long in equities. Market participants were blitzed with streams of negative economic data , reports of massive job losses , and rumors of bank nationalization .

To make matters worse, market confidence was all but shattered as the market balked at the $787 billion stimulus plan signed into law by President Obama and greeted the administration’s budget with a healthy dose of skepticism…..Full Article: Source

Posted on 24 March 2009 by VRS |  Email |Print

From Investopedia.com: Clean energy from renewable sources like the wind, sun and ocean waves, while promising, are likely to take several years before they reach a critical mass. An alternative for investors to consider is natural gas.

Yes, natural gas is a fossil fuel, but it does offer the advantage of having a cleaner reputation than oil. Let’s look at how investors can take advantage of recent natural gas price declines to near seven-year lows…..Full Article: Source

Posted on 24 March 2009 by VRS |  Email |Print

From Commodityonline.com: Thanks to China and the Red Reserve’s steps, global base metal prices are set to see new heights now.

China has decided to go ahead with its plans to make use of the recession and prices fall, and stock base metals so that it can boost its future projects. This move has helped the prices of metals to go up…..Full Article: Source

Posted on 24 March 2009 by VRS |  Email |Print

From Fool.com: The currency that comes to mind is the Candian Dollar. Canada has a lot of gold, oil and industrial commodities. So basically exchanging a US dollar for a Canadian dollar is like buying a GLD or USL ETF at very cheap prices.
As the price of these commodities increases, we would expect Canada to generate huge current account surpluses again. If Canada does not start outright printing then the canadian currency is the place to be…..Full Article: Source

Posted on 24 March 2009 by VRS |  Email |Print

From Time.com: Investors keen to protect their precious cash have sought security in all the usual places in recent months. The U.S. dollar, the Swiss franc and the Japanese yen — each with a history as a safe haven — have all provided homes for nervous depositors’ cash.

But as the economies of those three countries flounder, it’s time to look around, and smart investors think they’ve discovered a new harbor to protect them from the choppy economic seas. “The best safe haven currency,” analysts at banking giant HSBC wrote in a research note this month, is Norway’s. According to HSBC’s reading, right now the Norwegian krone is “probably the best currency in the world.” ….Full Article: Source

Posted on 24 March 2009 by VRS |  Email |Print

From Timesonline.co.uk: China’s central bank governor has issued a bold proposal to overhaul the global monetary system and one day replace the dollar as the world’s main reserve currency with the International Monetary Fund’s (IMF) Special Drawing Right

Zhou Xiaochuan, governor of the People’s Bank of China, argued that what he called a super-sovereign reserve currency would not only eliminate the risks inherent in currencies such as the dollar, which are backed only by the credit of the issuing country and not by gold or silver, but would also make it possible to manage global liquidity…..Full Article: Source

Posted on 24 March 2009 by VRS |  Email |Print

From Mysinchew.com: Malaysia hopes to maintain its commodity exports at 16.94% of the total export market although in value term it will be less than the record high achieved last year.

“I think RM112 billion export for commodities this year is not achievable anymore but we hope to maintain our export market share with all the programmes that we have,” said Plantation Industries and Commodities Minister Datuk Peter Chin Fah Kui…..Full Article: Source

Posted on 24 March 2009 by VRS |  Email |Print

From Bloomberg: Ghana, the world’s second-biggest cocoa producer, will set up a commodity exchange to stabilize prices for farmers and steady food supplies in the West African nation, the Securities and Exchange Commission said.

The exchange, to be based either in the capital, Accra, or the second-biggest city, Kumasi, may be established next year, Emmanuel Ashong-Katai, head of research and market development at the Accra-based commission, said in an interview on March 20…..Full Article: Source

Posted on 24 March 2009 by VRS |  Email |Print

From Reuters: The U.S. Commodity Futures Trading Commission on Monday said it approved new regulations that give the government more oversight over exempt electronic trading facilities where institutional investors buy and sell commodities.

The policy change allows the CFTC to better track trading in certain contracts on exempt electronic platforms like the Atlanta-based IntercontinentalExchange, which trades a host of energy contracts with little government oversight unlike the regulated New York Mercantile Exchange that is owned by CME Group…..Full Article: Source

Posted on 24 March 2009 by VRS |  Email |Print

From Forbes: China’s Securities Regulatory Commission has given its approval in principle to trading in early rice futures, the Zhengzhou Commodity Exchange (CZCE) said on Monday.

In an emailed statement, CZCE said that it will solicit public opinions about technical details of the trading by Thursday this week before officially launching the new product…..Full Article: Source

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