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Commodities Briefing 15.Nov 2011

Posted on 15 November 2011 by VRS |  Email |Print

John StephensonSpeculators increased wagers on rising commodity prices to a seven-week high as signs of resilient U.S. growth boosted prospects for demand.

Money managers increased combined net-long positions across 18 U.S. futures and options by 5.3 percent to 840,972 contracts in the week ended Nov. 8, Commodity Futures Trading Commission data show. That’s the highest since Sept. 20. The Standard & Poor’s GSCI Index of 24 raw materials has jumped 12 percent since Sept. 30, rebounding from two straight quarters of losses………………………………………Full Article: Source

Posted on 15 November 2011 by VRS |  Email |Print

Nelson LouieMarket experts have reported that key commodity prices were broadly higher in October as macro-economic sentiment recovered for the month, which concluded with an EU summit agreement to require greater bank capital requirements and to increase the size of the region’s rescue fund.

Nelson Louie, global head of commodities in Credit Suisse’s Asset Management division, said: “The agreement reached by the EU summit temporarily improved investor sentiment which lent support to multiple asset classes, including commodities………………………………………Full Article: Source

Posted on 15 November 2011 by VRS |  Email |Print

The renewable energy share of the global energy mix could rise from 13% in 2010 to 18% in 2035, according to the International Energy Agency’s (IEA) 2011 World Energy Outlook.
The rise in renewable energy would be underpinned by subsidies rising from US$64 billion in 2010 to US$250bn in 2035, in the New Policies Scenario. In comparison, the fossil fuel subsidies in 2010 amounted to US$409bn………………………………………Full Article: Source

Posted on 15 November 2011 by VRS |  Email |Print

Oil prices rose about 5% last week to finish only a dollar short of regaining triple-digit status. Since dipping below $80 per barrel on Oct. 3, West Texas Intermediate (WTI) prices have increased almost 28%. This increase is nearly twice that of the S&P 500 Index, up 15% since Oct. 3, but reinforces a recent trend for oil prices – as equities go, so goes oil.
The EIA says “the recent strong relationship between oil and equity prices resembles that seen during the economic downturn and recovery in 2008-2010.” According to EIA data, crude oil and the S&P 500 Index have had a positive correlation in 12 of the past 13 quarters. A positive correlation had not occurred once in the previous 35 quarters. In fact, crude oil and equities experienced a negative correlation during five quarters over that time period………………………………………Full Article: Source

Posted on 15 November 2011 by VRS |  Email |Print

The Organisation of the Petroleum Exporting Countries (OPEC), said its forecast for global oil demand growth in 2012 remained unchanged at 1.2 million barrels a day mb/d, but noted that uncertainties in the world economic outlook for the coming year have increased due to the challenges facing the Organisation for Economic Cooperation and Development (OECD) economies.

In its latest Monthly Oil Market Report (MOMR) the 12-member group also projected global oil demand growth at900,000 barrels per day in 2011 - unchanged from its September figures, noting that demand in industrialised nations is seen dropping further “as a result of slowing economic momentum, particularly in the (European Union).”……………………………………..Full Article: Source

Posted on 15 November 2011 by VRS |  Email |Print

Richard Jones, deputy executive director of the International Energy Agency comments on oil prices, country-to-country partnerships to develop natural gas projects and the Gas Exporting Countries’ Forum.

Jones also discussed the differences between shale gas development in Europe and in the U.S. He spoke in interview in Oslo today. The IEA is an energy policy adviser to 28 industrialized nations including the U.S., Japan and Germany………………………………………Full Article: Source

Posted on 15 November 2011 by VRS |  Email |Print

A recent analysis by Julian Jessop, Chief Global Economist for London-based Capital Economics, comes down pretty firmly on the side of gold being, in effect, a currency - at least for the moment - and one which, as such, will continue to outperform other currencies, particularly while global economic turmoil persists, or indeed escalates. Indeed he sees gold as set to climb well above $2,000 - but on an unspecified timescale.
It can be seen as a universal currency as it is not issued by a government or other sovereign entity and even if its day to day use as a medium of exchange might be considered limited in, say, the retail sector, it may still be acceptable as payment for some particularly large transactions, or as collateral………………………………………Full Article: Source

Posted on 15 November 2011 by VRS |  Email |Print

There is no doubt that the European sovereign debt crisis is a major factor driving the global markets lately. The imminent Greek default and the loss of confidence that Italy can avoid contagion and its own severe debt crisis has toppled both governments and set the stronger Eurozone nations on a path to socialized bailouts and eventual monetization (printing trillions more Euros).
These actions may forestall immediate catastrophe but also create other serious economic problems, such as inflation, recession or both (stagflation) across the Continent………………………………………Full Article: Source

Posted on 15 November 2011 by VRS |  Email |Print

Recovering from the sharp fall of last month, Gold prices continued its upward momentum in October 2011. The increase in gold prices came as a result of the European debt escalation. Gold reclaimed its negative relation with the dollar but this meant that gold largely traded alongside with the “risk off” trade. However, this behavior was non persistent during times when debt crisis in the Euro zone intensified, and gold reclaimed its previous position.

Gold closed at $1718 on the London AM Fix, showing an increase of + 5.46%. Measured in Indian rupees, gold established an increase of +5.31%………………………………………Full Article: Source

Posted on 15 November 2011 by VRS |  Email |Print

Aluminum output may drop in the first half of next year as producers increase idled plants to as much as 15 percent of global capacity, said United Co. Rusal, the world’s largest supplier.

China, Europe and the U.S. may shut down plants, Rusal First Deputy Chief Executive Officer Vladislav Soloviev told reporters in Moscow. Unless prices rise from current levels, 10 percent to 15 percent of capacity may be shut, Soloviev said after Rusal reported earnings………………………………………Full Article: Source

Posted on 15 November 2011 by VRS |  Email |Print

The secondary aluminum market is divided even as nonferrous auto shred prices jumped 4 cents per pound last week after a big drop in U.S. ferrous scrap tags tightened up the supply of shredded scrap, some market sources said.
While scrap buyers at secondary aluminum alloy plants said other aluminum scrap tags were flat, some nonferrous auto shred prices—also known as twitch—spiked to 83 to 85 cents per pound from a prior range of 79 to 81 cents per pound………………………………………Full Article: Source

Posted on 15 November 2011 by VRS |  Email |Print

A global nickel surplus may soar in 2012 to the highest in four years as Europe’s debt crisis and a sluggish U.S. economy cuts demand, said Japan’s top producer.

Supply will likely exceed demand by 54,000 metric tons in 2012, the biggest surplus since 2008, said Toru Higo, Sumitomo Metal Mining Co.’s general manager of nickel sales and raw materials. Demand outstripped supply by 63,000 tons last year, the first deficit since 2006, before moving to a surplus of 11,000 tons this year, Higo said………………………………………Full Article: Source

Posted on 15 November 2011 by VRS |  Email |Print

Crude oil was the commodity to trade back in 2007-2008 when prices rocketed above $145 per barrel then dropped like a rock all the way back down to $35 per barrel leaving many investors and traders either greatly rewarded or dead broke.

Since then the focus of the world has moved to gold and silver as currencies spiral out of control with more and more reasons why individuals and entire countries should focus on owning physical metals rather than eroding currencies………………………………………Full Article: Source

Posted on 15 November 2011 by VRS |  Email |Print

Given the turmoil in Europe, what are the best ETF investing strategies? Several ETF experts and money managers share their market outlook and top picks.
Tahar Mjigal, co-portfolio manager at International Capital Management Corp. (ICMC) in Dallas. Debt-related problems with the PIIGS (Portugal, Italy, Ireland, Greece and Spain) were the catalyst of significant market volatility in August and September. The fear of defaults by Greece and Italy drove investors into their now-familiar “risk off” mode, resulting in a brief period of volatility and converging correlations similar to that of 2008………………………………………Full Article: Source

Posted on 15 November 2011 by VRS |  Email |Print

Global investment giant Pimco is seeking to capitalise on its wealth of experience in the fixed income market with the launch of an absolute return fund aimed at global credit markets.

The Dublin-domiciled Pimco GIS Credit Absolute Return fund will be managed by Mark Kiesel, managing director and head of corporate bond portfolio management………………………………………Full Article: Source

Posted on 15 November 2011 by VRS |  Email |Print

The idea of a Pan-African Exchange is being promoted by Bourse Africa Limited (BAL), a Botswana-based exchange, including at the International Convening on Commodity Exchanges in Africa, held in Addis Abeba, for two days starting on November 8, 2011.

BAL plans to launch such an exchange in May 2012, which will be a multi-asset class and commodity exchange, dealing in currency, bonds, commodities, and diamonds, and promoting a common technological hub where intra-African and international bilateral and multilateral trade will be conducted………………………………………Full Article: Source

Posted on 15 November 2011 by VRS |  Email |Print

Emerging-market currencies tumbled Monday as anxiety about the euro-zone debt crisis resurfaced, with Italy in focus. Growth-sensitive currencies among developing countries continue to be dominated by developments in the euro zone, with emerging European currencies suffering the brunt of the losses. The Hungarian forint hit a new all-time low against the euro Monday, as investors remain concerned about the country’s growth outlook and its links to western Europe.

Concerns as to whether Italy will be able to implement austerity measures successfully and grow enough to meet its debt obligations overtook markets, as Italian government bond yields ticked higher………………………………………Full Article: Source

Posted on 15 November 2011 by VRS |  Email |Print

Sterling dropped versus the dollar on Monday, tracking losses in the euro against the safe-haven U.S. currency as deep-seated concerns about the euro zone’s huge debt problems outweighed investor optimism over a new Italian government.

The pound fell more than 1 percent to hit a session low of $1.5891, triggering stops cited below trendline support around $1.5920. Traders cited sterling selling by macro funds and Eastern European names as investors booked profits on the pound’s broad gains so far this month………………………………………Full Article: Source

Posted on 15 November 2011 by VRS |  Email |Print

After years of political bickering, Australia has finally passed a carbon tax law in light of this month’s global climate talks in South Africa. As one of the most important environmental and economic reforms in the country’s history, the law will aim to cut emissions by at least 5 percent of 2000 levels (159 million tons) by 2020 in one of the world’s top 20 polluting countries.

The top 500 polluters in Australia will be required to pay a tax on their carbon emissions for each ton of carbon dioxide emitted from July 2012 onward. Through 2012, there will be a fixed carbon tax of A$23 ($23.78) per ton, followed by an emissions trading scheme to start in July 2015………………………………………Full Article: Source

Posted on 15 November 2011 by VRS |  Email |Print

U.S. President Barack Obama has closed the summit in his home state of Hawaii of the 21 member Asia-Pacific Economic Cooperation (APEC) group. APEC agreed on steps aimed at boosting growth and simplifying trade. Mr. Obama also discussed bilateral issues with China and Iran’s controversial nuclear program.

A U.S. statement said leaders agreed on a comprehensive set of measures designed to increase growth, create jobs and expand trade and investment in a region representing more than half of the world’s economic output and 44 percent of world trade………………………………………Full Article: Source

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