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Commodities Briefing 03.Nov 2011

Posted on 03 November 2011 by VRS |  Email |Print

Mr Henry DerwentAs uncertainty looms over the future of the Kyoto Protocol, the delegates of the Carbon Forum Asia 2011 met at Singapore in an attempt to iron out differences and arrive at new solutions. The sombre note was provided by the World Bank assessment that global carbon markets have stalled after five years of consecutive growth.
However, the global carbon-trading market had already touched $142 billion last year, a long way from the initial year of 2005………………………………………..Full Article: Source

Posted on 03 November 2011 by VRS |  Email |Print

Even more than the carbon tax itself, the central mechanism of the Gillard government’s clean energy bills now making their way through parliament is the international carbon trading market.
Although the carbon tax will cost Australians $9 billion in its first year, our greenhouse emissions continue to rise under the tax. We hit our target of a 5 per cent reduction mainly by buying carbon credits on the international market, which the government assumes will be functioning by 2016………………………………………..Full Article: Source

Posted on 03 November 2011 by VRS |  Email |Print

A staggering amount of money is flowing into credit as investors switch gears amid changing market conditions. Despite headwinds in Europe, investors now view much of the world’s debt as relatively safe, prompting them to put money into securities such U.S. Treasuries and emerging market bonds, according to data compiled by Société Générale.
That’s quite the reversal from the trend we saw at this time last year, when everyone was exiting credit to make a play in equity markets………………………………………..Full Article: Source

Posted on 03 November 2011 by VRS |  Email |Print

Commodity price volatility has detrimental effect on the public finances of developing countries, according to research conducted by two lecturers at the University of Auvergne in France.
The study said that commodity price instability was particularly affecting developing countries, whose export earnings mostly came from commodities and whose imports bills are dominated by food products. The authors say they found robust evidence that tax revenues in developing countries increase with the rise of commodity prices but that they are hurt by the volatility of these prices………………………………………..Full Article: Source

Posted on 03 November 2011 by VRS |  Email |Print

The end of October marks a major milestone for the world, as the global population is now at 7 billion people. Farmers jobs get harder and harder every day as the world’s population continues to rapidly grow. The United Nations estimates that by 2050, the global population will reach 9.3 billion and require twice as much food production.
Commodity prices recovered in October from a dismal September on a more stable economic outlook in Europe and reduced production estimates across the U.S. for corn, soybeans, and wheat………………………………………..Full Article: Source

Posted on 03 November 2011 by VRS |  Email |Print

Spot gold softened on Thursday, tracking the downbeat sentiment in riskier assets as investors remained worried about the euro zone’s debt crisis ahead of a Group of 20 summit.
Gold has been range-bound in the past week or so, with the threat of a potentially disastrous Greek default burnishing gold’s safe-haven appeal and fears of a liquidity crunch in case of a default keeping gains in check………………………………………..Full Article: Source

Posted on 03 November 2011 by VRS |  Email |Print

It’s been several weeks since I’ve written about gold and we have had a wild ride since the $1,910-$1,920 highs in August. At the time as we approached I forecasted a major correction was nigh and we were shorting the rise from $1,862-$1,910 prior to a huge $208 drop that took place over just a few days.
We covered our short at $1,725 and then gold rallied back to a double top at $1,920 and then fell back to $1,531. ……………………………………….Full Article: Source

Posted on 03 November 2011 by VRS |  Email |Print

The demand side for Silver has received a great deal of attention, with silver physical demand showing signs of life at the $30 mark, while ETP flows have been choppy, said Barclays Capital in a briefing.
However it is the supply side, with uninterrupted record levels of mine production since 2004 that have kept the market in surplus even when industrial demand has grown. Indeed, current price levels, even though a third below their intra-year highs, have supported healthy mine production growth………………………………………..Full Article: Source

Posted on 03 November 2011 by VRS |  Email |Print

I said before that the current pattern on the silver chart is an extremely bullish pattern. It is no ordinary flag. It is a pattern that often appears before a good goes parabolic. Provided that the silver price can breach the relevant resistance over the next couple of weeks, it will increase dramatically over the next couple of months.
This pattern on the silver chart has me convinced that silver will rise even faster than a lot of silver bulls are expecting. Let me give you an example of what is likely to come next, after this pattern. ……………………………………….Full Article: Source

Posted on 03 November 2011 by VRS |  Email |Print

Copper consumption growth from the worlds largest copper consumer China is set to decline in 2012 as the Chinese economy slows down as per data from Beijing Antaike Information Development Co.
Tight credit supply, slower export growth, less new-home starts, shrinking auto-sales and declining investments in rail road will cause copper demand growth to slow down in the next year, Antaike reported at their annual copper conference………………………………………..Full Article: Source

Posted on 03 November 2011 by VRS |  Email |Print

At the Metal-Pages’ Minor Metals Conference in Beijing Jay Roberge of Equitas Resources said there is no commodity in a greater supply shortfall than tantalum.
A shortfall of tantalum is significant because it is a critical metal. A resource is considered critical when its input is essential to the overall functionality of a product. The British Geological Survey, which has tantalum on its risk list, points out the such resources are needed to maintain an economy or lifestyle………………………………………..Full Article: Source

Posted on 03 November 2011 by VRS |  Email |Print

There could be a severe global oil crunch by 2015 due to drastic changes in the oil market fundamentals, a World Bank consultant told the 17th Annual Energy Conference of the Emirates Centre for Strategic Studies and Research (ECSSR).
Addressing the ECSSR conference in the UAE capital, Dr Mamdouh Salameh, Consultant on Oil and Energy Affairs for the World Bank, said: “Unfortunately, the current alignment of these fundamentals can only lead to a severe tightening of the oil market. Other major factors impacting on the global oil market are China and the declining influence of OPEC………………………………………..Full Article: Source

Posted on 03 November 2011 by VRS |  Email |Print

In the latest Deloitte periodical publication, Middle East Point of View, which hosts independent analysis and views from experts, an article titled ‘Back to the future: where next for 100-dollar oil’ states that global average demand for crude oil reached 86.6 million barrels a day in 2010, the highest level since 2007 and is set to increase by almost 2 million barrels a day each year over the next two years.
The article reiterates that, as a result, the price of oil had crossed the USD 100 threshold for the second time in two years. After factoring the impact of the situation in Libya and the ability of Saudi Arabia to cover most the production shortfall, oil has traded close to USD 100 after briefly peaking at USD 114. (Press Release)

Posted on 03 November 2011 by VRS |  Email |Print

Oil prices were heating up Wednesday on moderately increased risk appetite triggered by bullish oil calls from various financial groups, better-than-expected U.S. economic data, expectations of another round of quantitative easing and mounting European Union pressures on Greece to yield to conditions for its rescue plans.
“Investors feel a tad more certain that Greece will abide,” says Kingsview Financial trader Matt Zeman………………………………………..Full Article: Source

Posted on 03 November 2011 by VRS |  Email |Print

Getting a fair price for a barrel of oil is a key issue for exporting countries. This was one of the main factors that led to the establishment of the Organisation of Petroleum Exporting Countries (Opec). In 1960, oil was extremely cheap, not more than $2 per barrel.
Since then, oil prices have seen sharp fluctuations. Opec has constantly struggled to stabilise prices at fair levels that reflect the importance of oil as a source of energy and of revenue that can be utilised to develop producing countries………………………………………..Full Article: Source

Posted on 03 November 2011 by VRS |  Email |Print

Members of the Organization of Petroleum Exporting Countries who are producing above their mandated output quotas must cut oil production before discussing future decisions,Rafael Ramirez, Venezuelan Oil Minister said.
Ramirez said that uncertainty over the future of the global economy has increased since the last OPEC meeting when member countries failed to reach a consensus………………………………………..Full Article: Source

Posted on 03 November 2011 by VRS |  Email |Print

Secretary-General of the Organization of Petroleum Exporting Countries (OPEC) Abdullah al-Badri said that he doesn’t expect an oil price lower than $100 per barrel by the end of this year.
“The crude price is not expected to come down until the end of this year,” Badri told reporters on the sidelines of the 15th International Conference on Technology and Innovation in Oil and Gas Industry here in Tehran, adding that the price of $100 is “comfortable” for the consumer and the producing countries………………………………………..Full Article: Source

Posted on 03 November 2011 by VRS |  Email |Print

Those of you in your fifties (my decade) or older remember the Arab oil embargo of 1973 to 1974. That’s when tensions in the Middle East caused the price of crude oil to quadruple from $3.00 per barrel to $12 per barrel in a matter of months.
The gas lines at my local filling station stretched down the street and out of sight. In the last week of February 1974, the American Automobile Association reported 20 percent of American service stations had no gasoline at all………………………………………..Full Article: Source

Posted on 03 November 2011 by VRS |  Email |Print

The rapid expansion of the ETF industry has been one of the most important developments of the last several decades to financial professionals; as the lineup of exchange-traded products has surged past 1,300, financial advisors now have more tools in their toolkits than ever before to help construct client portfolios.
With these new financial products comes a responsibility to understand the various risk factors and nuances of exchange-traded products, and as the industry has expanded rapidly the amount of information to digest has swelled as well. ……………………………………….Full Article: Source

Posted on 03 November 2011 by VRS |  Email |Print

The emergence of exchange-traded funds (ETFs) has gone from strength to strength since their introduction in the U.K. a few years ago, and Morningstar’s ETF analysts have been there every step of the way to provide education, direction and independent research. But many investors are still wary of these securities, not least because of the bad press they’ve received of late in regard to transparency and even the advent of the odd ‘rogue trader’.
So let’s take it back to basics: What is an ETF?……………………………………….Full Article: Source

Posted on 03 November 2011 by VRS |  Email |Print

Greece is not only the cradle of democracy, but of drama. The latter in particular was in rich supply after George Papandreou, the country’s prime minister, hastily announced a plan for a referendum on the new bail-out package that had been approved at last week’s European Union (EU) summit.
First Mr Papandreou had to confront a hostile cabinet (although it has since endorsed the idea of a referendum). Then he faced the threat of a rebellion by his Panhellenic Socialist Movement (Pasok)………………………………………..Full Article: Source

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