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Commodities Briefing 24.Oct 2012

Posted on 24 October 2012 by VRS |  Email |Print

Commodities declined, erasing this year’s advance, on speculation that demand for energy, industrial metals and some agricultural products will slump because of the sluggish global economy.
The Standard & Poor’s GSCI Spot Index (MXWD) of 24 raw materials fell 1.4 percent to settle at 639.3 at 4 p.m. New York time. Earlier, the gauge touched 635.1, the lowest since Aug. 3. The measure also erased 2012 gains in May and July. The last annual drop was in 2008………………………………………..Full Article: Source

Posted on 24 October 2012 by VRS |  Email |Print

U.S. oil output is surging so fast that the United States could soon overtake Saudi Arabia as the world’s biggest producer. Driven by high prices and new drilling methods, U.S. production of crude and other liquid hydrocarbons is on track to rise 7 percent this year to an average of 10.9 million barrels per day. This will be the fourth straight year of crude increases and the biggest single-year gain since 1951.
The boom has surprised even the experts. “Five years ago, if I or anyone had predicted today’s production growth, people would have thought we were crazy,” says Jim Burkhard, head of oil markets research at IHS CERA, an energy consulting firm………………………………………..Full Article: Source

Posted on 24 October 2012 by VRS |  Email |Print

For all the hot air relayed on U.S. foreign policy last night, neither candidate spent much time talking about what’s actually worrying the Middle East. ‘Oil’ is the quick answer: OPEC faces a triple dilemma over the short, medium and long term, none of which have good outcomes for the cartel.
The short term is simple; prices are likely to correct into 2013 below price bands that are deemed economically and politically comfortable. That strikes on OPEC’s medium term problem; the geological cost of production is now structurally out of sync with the geopolitical cost of survival……………………………………….Full Article: Source

Posted on 24 October 2012 by VRS |  Email |Print

Iran threatened on Tuesday to halt all its oil exports if the West’s antinuclear sanctions on the country are strengthened, apparently in the hope that such a warning would spook the international petroleum market by raising prices and reminding the world of Iran’s potential to wreak havoc with the global economy.
But the threat, made by Rostam Qasemi, Iran’s oil minister, at the World Energy Forum, a conference in Dubai, United Arab Emirates, appeared to have no impact. In a possible reflection of how steeply Iran’s influence in the market has eroded, oil prices fell to a three-month low………………………………………..Full Article: Source

Posted on 24 October 2012 by VRS |  Email |Print

Oil prices fluctuated Tuesday as the impending restart of a North American pipeline balanced fears that Syria’s conflict might spread beyond its borders and jeopardize oil supplies.
Benchmark oil for December delivery was down 26 cents to $88.39 a barrel at late afternoon Bangkok time in electronic trading on the New York Mercantile Exchange after briefly venturing above $89 earlier in the day………………………………………..Full Article: Source

Posted on 24 October 2012 by VRS |  Email |Print

An OPEC panel Tuesday reviewed potential candidates to replace the group’s departing secretary general, but it couldn’t agree on a preferred candidate to head the organization, two delegates said.
The panel’s lack of a clear recommendation for who should lead the organization into the future highlights the challenges facing the increasingly fractious Organization of the Petroleum Exporting Countries, whose members produce more than a third of the world’s oil supply………………………………………..Full Article: Source

Posted on 24 October 2012 by VRS |  Email |Print

Germany’s biggest bank Deutsche Bank raised its 2013 and 2014 forecasts for gold and silver, citing support from stimulus measures by central banks such as the United States Federal Reserve.
According to Deutsche Bank, the gold price could exceed to $2,200 a ounce in 2013. the bank lifted its 2013 gold price outlook by 3% to $2,113 per ounce and its 2014 forecast by y 11.1% to $2,000/oz. The German bank similarly advanced its 2013 price forecast on silver by 3% to $44/oz and its 2014 outlook by 11.1% to $40/oz………………………………………..Full Article: Source

Posted on 24 October 2012 by VRS |  Email |Print

After eight weeks of consecutive increases, gold’s net speculative length fell last week. A decline, Standard Bank attributes to “Investor uncertainty over the ability of QE3 to support prices and/or the longevity of Fed’s open-ended commitment to easing.”
Indeed, the bank wrote in daily commodities note that this uncertainty is “weighing on gold”, adding that it expects this week’s data from the CFTC to show further weakening, although, it cautioned, “we should see some stability as the gold price moves towards $1,700.”……………………………………….Full Article: Source

Posted on 24 October 2012 by VRS |  Email |Print

As gold prices hit a 2012 record of $1,787.40 per ounce on Friday, Bank of America Merrill Lynch analysts said the precious metal could soar to $3,000 or even $5,000 over the longer-term.
“We will be focusing in on gold. Ultimately we think gold can trade between $3,000 and $5,000 an ounce going forward,” MacNeil Curry, head of foreign-exchange and rates technical strategy at BAML, told CNBC’s “Worldwide Exchange.” “Certainly not within the next few months, but on a long-term basis we are on a well-defined uptrend, and we have got more to run before that runs its course.” (Press Release)

Posted on 24 October 2012 by VRS |  Email |Print

This year’s annual gathering of producers, consumers, traders and investors during London Metal Exchange week will be remembered for being a sanguine affair. There was an undercurrent of unease amongst market participants, though the takeaway messages from our meetings were not as downbeat as one might have anticipated.
The biggest question marks were over the demand outlook. Visibility on order books is very low indeed and there is huge uncertainty around the growth trajectory of China’s economy………………………………………..Full Article: Source

Posted on 24 October 2012 by VRS |  Email |Print

When it comes to commodity investing, there are a few big players that tend to gather the majority of investor attention. Futures products like crude, gold, and natural gas gobble up headlines while others like sugar and aluminum tend to fall by the wayside.
Commodities like zinc and tin have far more practical industrial use than something like gold, yet their respective volumes come nowhere near the coveted precious metal. For those investors looking to make a commodity play that brings you closer to the ground in an economic sense, there are a number of strong options available……………………………………….Full Article: Source

Posted on 24 October 2012 by VRS |  Email |Print

Oil ETFs dumped again today as the United States Oil Fund ETF dropped 2.83% and the oil spot price dropped 2.90% to close at $86.57 per barrel. Energy ETFs followed along the same path, as the Energy Select Sector SPDR ETF dropped 2.33% as well. Natural gas ETFs were the only winners today in the energy sector after the United States Natural Gas Fund gained 2.03%.
Today was a big loss for equity markets and oil ETFs and energy prices as well, as oil ETFs and energy ETFs typically rise and fall with stock market and economic growth and contraction………………………………………..Full Article: Source

Posted on 24 October 2012 by VRS |  Email |Print

Goldman Sachs Group Inc said on Tuesday the bank’s senior management had never “seriously” looked at spinning off all or part of its commodities business, as the bank faces tougher regulations that restrict its trading.
The Wall Street Journal reported on Tuesday that Goldman had held “preliminary internal discussions” in recent years about splitting off its commodities business. The newspaper cited people briefed on the discussions in its report………………………………………..Full Article: Source

Posted on 24 October 2012 by VRS |  Email |Print

At the presidential debate on Monday night, Mitt Romney, the Republicans’ nominee, repeated his promise to brand China a currency manipulator and to rebalance the trade relationship between the two countries.
“I’ve watched year in and year out as companies have shut down and people have lost their jobs because China has not played by the same rules, in part by holding down artificially the value of their currency,” Mr. Romney said………………………………………..Full Article: Source

Posted on 24 October 2012 by VRS |  Email |Print

I’ve been warning of a slowdown in China for some time, but there isn’t much room for argument any more. The official figures now have growth at 7.4% and some, such as Marc Faber of the Gloom, Boom and Doom Report, suspect it may be more like 4%.
More telling are some of the non-official numbers. Komatsu’s sales of excavators to China fell by 43% year-on-year in August (marking the 16th consecutive monthly decline). If sales of excavators are falling, you can assume that activity in areas in which excavators operate is also falling. Goodbye supercycle………………………………………..Full Article: Source

Posted on 24 October 2012 by VRS |  Email |Print

The European Commission has proposed an Emissions Trading System (ETS) ban on €440 million of Kyoto-era carbon credits from non-EU countries such as Russia, which have not signed up to a second Kyoto commitment period.
The document, which EurActiv has seen, says Emission Reduction Unit credits, or ERUs, “issued from 1st January 2013 in respect of projects in host Parties without new quantified emissions targets in place shall not be held in accounts in the Union registry.”……………………………………….Full Article: Source

Posted on 24 October 2012 by VRS |  Email |Print

The price local pollutors pay for carbon credits to offset their greenhouse gas emissions has taken another dive. Prices for some of the most commonly-traded UN-backed carbon credits, mainly from Russia and Ukraine, are down 30% in recent days.
The collapse in prices, which were already at record lows, came after the European Union signalled on Friday that it may ban its pollutors from purchasing the credits………………………………………..Full Article: Source

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