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Commodities Briefing 26.Oct 2012

Posted on 26 October 2012 by VRS |  Email |Print

Miner BHP Billiton PLC Thursday said it remains confident about the group’s long-term outlook and added that it expects urbanization and industrialization in China to continue to support growth in demand for commodities. Expects to play an important role in helping farmers increase food production.
Market volatility experienced during the last financial year will continue in the short term, as concerns surrounding the stability of the Eurozone and the concerns on China’s growth continue to weigh on market sentiment………………………………………..Full Article: Source

Posted on 26 October 2012 by VRS |  Email |Print

Commodity derivative speculators may face tougher curbs under compromise plans to overhaul the European Union’s financial market rules.
Governments may seek to restrict the number of commodity- derivative contracts that traders can enter into, according to a draft version of the rules prepared by Cyprus, which holds the rotating presidency of the EU. Such a requirement would go beyond a draft law published last year by Michel Barnier, the EU’s financial services chief………………………………………..Full Article: Source

Posted on 26 October 2012 by VRS |  Email |Print

OPEC will boost crude shipments next month as winter demand for heating oil and diesel climbs in the Northern Hemisphere, according to Oil Movements.
The Organization of Petroleum Exporting Countries will export 23.84 million barrels a day in the four weeks to Nov. 10, up 0.8 percent from 23.64 million a month earlier, the tanker- tracker said today in its weekly report. The data exclude Angola and Ecuador………………………………………..Full Article: Source

Posted on 26 October 2012 by VRS |  Email |Print

Suddenly, the world is awash in oil. Only a few months ago, traders and investors were fretting about whether tensions in the Middle East and production problems elsewhere would lead to a shortage of crude oil. Now, many are worried there may be too much.
Forecasters say that in the fourth quarter, global oil output will top demand by more than 630,000 barrels a day, the biggest surplus in four years. The jump is due to a confluence of events: Turmoil in the Middle East has subsided along with the production and transportation problems that had been stifling oil flows from the U.S., North Sea and Africa. Meanwhile, Saudi Arabia is pumping more oil to replace falling Iranian exports, keeping output from the Organization of the Petroleum Exporting Countries steady………………………………………..Full Article: Source

Posted on 26 October 2012 by VRS |  Email |Print

The world produced more oil in October as Libya, Iraq and Saudi Arabia pumped more crude and the United States continued to draw more oil from its vast shale reserves, the U.S. Energy Information Administration said in a bimonthly report.
The report is required by the Iran sanctions law President Barack Obama signed last year. Reuters obtained a copy ahead of publication………………………………………..Full Article: Source

Posted on 26 October 2012 by VRS |  Email |Print

During the month, the price of oil has declined by 7.5%. United States Oil (USO) also decreased by 7.3%. The decline in the price of oil in recent days may have had an adverse impact on energy companies’ stock such as Chevron Corporation (CVX).
What could have caused such a sharp drop in the price of oil? Moreover, will oil prices continue to fall in the weeks to follow? Let’s examine the recent developments in the oil market and try to figure what’s up ahead for oil………………………………………..Full Article: Source

Posted on 26 October 2012 by VRS |  Email |Print

Gold may outperform other commodities as the bull run in raw materials pauses amid slowing economies, while grains and oilseeds may jump on weather disruptions, according to participants at the World Commodities Week conference.
Commodities will likely lack direction for the next 12 months, meaning investors will focus more on relative-value trades, according to Tiberius Asset Management AG. Deutsche Bank AG favors precious metals and is neutral on oil and industrial metals, Michael Lewis, head of commodities research at the bank, said today at the conference in London. Bullion isn’t in a “bubble” at current prices, he said………………………………………..Full Article: Source

Posted on 26 October 2012 by VRS |  Email |Print

Gold rose above $1,700 an ounce on Thursday, a day after it fell under that, in reaction to encouraging United Kingdom GDP growth data and expectations the Bank of Japan will further loosen its monetary policy.
Bullion, a traditional inflation hedge, rose after data showed Britain posted its strongest quarterly economic growth in five years, although temporary effects may have masked a weaker underlying picture………………………………………..Full Article: Source

Posted on 26 October 2012 by VRS |  Email |Print

Runaway public spending combined with excessively loose monetary policy by the Federal Reserve and other global central banks will push gold to $5,000 per ounce within the next two years, noted investor Peter Schiff said Thursday.
A longtime bullion bull, the head of Euro Pacific Capital told Futures Now in an interview that despite a recent retracement, “gold’s got only one direction to go, and that’s higher.”……………………………………….Full Article: Source

Posted on 26 October 2012 by VRS |  Email |Print

Gold prices may reach all time high of $2,075 an ounce in December this year as mainland China’s gold buying from Australia rose sharply, said Saxo bank in a commodity snippet. Our recommendation is to buy gold now before the gold price escalates further higher, the bank added.
According to the Danish investment bank, yellow metal has jumped past coal as Australia’s second most beneficial physical export to China, with revenue up a whopping 900% for your first eight months of this year, bringing in $4.1 billion………………………………………..Full Article: Source

Posted on 26 October 2012 by VRS |  Email |Print

Under the terms of the 1993 government-to-government nuclear non-proliferation agreement (Megatons to Megawatts program), the United States and Russia agreed to commercially implement a 20-year program to convert 500 metric tons of HEU (uranium 235 enriched to 90%) taken from Soviet era warheads, into LEU, low enriched uranium (less than 5% uranium 235).
To date 463.5 metric tons of bomb-grade HEU have been recycled into 13,345 metric tons of LEU – enough material to produce fuel to power the entire United States for about two years………………………………………..Full Article: Source

Posted on 26 October 2012 by VRS |  Email |Print

Gold traders are the most bullish in three weeks as investors’ bullion holdings rose to a record on mounting speculation that central banks will add more stimulus to bolster economic growth. Fourteen of 26 analysts surveyed by Bloomberg expect prices to rise next week, nine were bearish and three were neutral.
Investors boosted holdings in exchange-traded products to an all-time high of 2,584.5 metric tons on Oct. 24, valued at $142.4 billion, data compiled by Bloomberg show. Hedge funds’ bets on a rally are near the biggest in more than a year, according to U.S. Commodity Futures Trading Commission data………………………………………..Full Article: Source

Posted on 26 October 2012 by VRS |  Email |Print

There is no argument that the evolution of the ETF industry has democratized an asset class that was once hard-to-reach by the average investor. With roughly 150 options, investors can now gain cheap and easy access to nearly every corner of the commodity universe.
And while there are a number of ETFs that offer access to a single commodity, some investors prefer to have broad-based exposure to the entire space. Enter the Dow Jones-UBS Commodity Index Total Return ETN (DJCI), a product from UBS that offers diversified exposure to a basket of 19 different futures contracts. It’s unique weighting methodology combined with its attractively low price tag certainly warrants investors to take a closer look………………………………………..Full Article: Source

Posted on 26 October 2012 by VRS |  Email |Print

As Bernanke and the Fed continue to print more money and debase the dollar, investors are becoming increasingly concerned with the potential impact this will have on inflation. This has led to many turning to commodity investments to help protect their portfolios.
Among the most popular inflation hedge investments are agricultural commodities, as food prices are among the first to feel the effects of inflation. As such, a number of big name investors have been recommending ag as the place to be for the coming years……………………………………….Full Article: Source

Posted on 26 October 2012 by VRS |  Email |Print

As exchange traded fund providers ramp up efforts to market the first physically backed diamond fund, some advisors believe the commodity’s unique characteristics will create pricing inefficiencies.
Portfolio managers contend that diamonds will be more difficult to package and price into the ETF structure, compared to other types of successful products based on precious metals………………………………………..Full Article: Source

Posted on 26 October 2012 by VRS |  Email |Print

Swiss commodity fund manager Tiberius Asset Management, said in its latest monthly commentary that the commodity market ended the third quarter mostly on positive territory with all major commodity indices posting gains during the period.
It said that the broadly diversified Dow Jones UBS Commodity Index gained +2.40%, outpacing the Rogers International Commodity Index (+1.35%) and the S & P Goldman Sachs Commodity Index (-0.23%). The slightly weaker performance of the latter two indices was mainly due to their higher weighting of crude oil, which proved to be one of September’s underperformers with -2.9% (WTI) and -0.4% (Brent), Tiberius reported………………………………………..Full Article: Source

Posted on 26 October 2012 by VRS |  Email |Print

The most recent round of currency battles is likely to end in a whimper rather than a bang, with major liquidity injections from central banks in the countries where the globe’s most important currencies originate the main reason they have stalled rather than sparked off, according to HSBC.
“With almost all countries seemingly having a preference for a weaker currency, the result has been a stalemate where no country gets what it wants. If the ‘currency wars’ were a sporting fixture, they would be described as a no score draw,” HSBC’s currency strategists wrote in a research note………………………………………..Full Article: Source

Posted on 26 October 2012 by VRS |  Email |Print

Special Administrative Region of China, Hong Kong, is now involved in the currency wars that take place around the world. Last week, the Hong Kong Monetary Authority (HKMA) conducted currency interventions, having sold its own currency in the amount of 603 million U.S. dollars in just one hour to stabilize the exchange rate of the Hong Kong currency against the U.S. dollar.
The measure was taken after the exchange rate of the Hong Kong dollar against the U.S. dollar fell below $7.75 per U.S. dollar, dropping to the level of 7.7367 during the trading session………………………………………..Full Article: Source

Posted on 26 October 2012 by VRS |  Email |Print

As California, environment stewards and the sixth largest economy in the world, prepares to launch the most extensive carbon market in North America Nov. 14, stakeholders can look to Europe to learn the dangers from selling too many unverifiable emission credits and permits.
The state plans to auction off 10 percent hand of the credits and hand out the others free of charge. California anticipates that businesses will pay some $1 billion over the next five years for the credits. The model is similar to Europe’s………………………………………..Full Article: Source

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