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Commodities Briefing 27.Nov 2012

Posted on 27 November 2012 by VRS |  Email |Print

The recent softening of global metal and mineral commodity prices is merely a bump in the road and the so-called commodity super cycle is set to resume, albeit at a more subdued rate, Australia-based commodities investor group RFC Ambrian said in a research note Monday.
“There is no doubt that commodity markets have fallen back from peak levels, but we believe we are still well and truly in the super cycle and that the recent decline in demand is just a bump in the road,” it said. Growth would continue in the BRIC countries (Brazil, Russia, India and China) and this would drive demand for commodities in the future, it added………………………………………..Full Article: Source

Posted on 27 November 2012 by VRS |  Email |Print

Growth in China has slowed from a peak of more than 14 percent in 2007, according to the International Monetary Fund (IMF), to an estimated 7.8 percent this year. The sharp deceleration has changed the outlook for commodities and the companies that produce them.
The impact on prices can be seen in the Thomson Reuters Jefferies CRB commodities index, which plunged from a peak of 473 points in July 2008 to a trough of 200 in December that year. It recovered to 370 points in April last year before falling to 307 last week………………………………………..Full Article: Source

Posted on 27 November 2012 by VRS |  Email |Print

A huge part of this call was attributed to the slowdown in the Chinese economy and its longer-term goal of rebalancing the economy. But some commodities are sure to outperform others in the coming years. We drew on Morse’s report to put together the price targets for 18 key commodities and highlighted some key risks that could boost prices or deliver a massive blow.
Citi is bearish on Brent prices and thinks the oil market is in the process of normalizing……………………………………….Full Article: Source

Posted on 27 November 2012 by VRS |  Email |Print

During November, the price of oil has increased by 2.4%. United States Oil (USO) also rose by 1.7%. The recent rally in the price of oil may have been stemmed, in part, by the recent tensions in the Middle East.
The rise in oil prices may have also had a positive impact on energy companies’ stock, such as Exxon Mobil Corporation (XOM). Will oil prices continue to rise? Let’s examine the recent developments in the oil market and try to figure what’s next for crude oil………………………………………..Full Article: Source

Posted on 27 November 2012 by VRS |  Email |Print

Rising non-OPEC supply and weak demand growth will exert downward pressure on oil prices in 2013, the Centre for Global Energy Studies stated. In its report CGES said that oil prices are currently being supported by the world’s need to rebuild inventories from the very low levels they reached by late 2011 and, more recently, by rising geopolitical tensions in the Middle East.
“With inventories now recovering, downward pressures on oil prices are beginning to emerge,” CGES said………………………………………..Full Article: Source

Posted on 27 November 2012 by VRS |  Email |Print

Global demand for crude is growing so strongly that the world needs “every single drop of Canadian oil,” the International Energy Agency’s chief economist said on Monday, playing down fears that growing U.S. production could hit Canadian exports.
Fatih Birol said that even if U.S. output rises as much as the agency expects, the country would still need to import four million barrels a day and that Canada is an obvious supplier………………………………………..Full Article: Source

Posted on 27 November 2012 by VRS |  Email |Print

ConocoPhillips is in the middle of a long-standing streamlining programme, so there was little surprise on Monday when it announced the disposal of a chunky $5.5bn asset – its stake in Kazakhstan’s vast Kashagan field.
But the buyer’s name came as a shock. Given the enthusiasm of president Nursultan Nazarbayev (pictured) for Kazakhs to own more of the country’s mineral wealth, it had been expected that ConocoPhilips might sell to a Kazakh state group – for example, KazMunaiGas, the energy company, which expressed an interest only last month. Instead the purchaser is ONGC, the Indian state oil group………………………………………..Full Article: Source

Posted on 27 November 2012 by VRS |  Email |Print

Top gold producer China aims to produce between 420 and 450 tonnes of the precious metal in 2015, up about 25 percent from 2011, while consumption may reach 1,000 tonnes by then, the Ministry of Industry and Information Technology said on Monday.
China is already the main consumer of a range of commodities, including copper, coal and iron ore, and the world’s second-largest gold consumer after India has to import large quantities of bullion to satisfy domestic demand………………………………………..Full Article: Source

Posted on 27 November 2012 by VRS |  Email |Print

Chile is a country that will offer investors Latin American and commodity exposure in one play. The iShares MSCI Chile Index allows exposure to the growth in Asian markets indirectly, as Chile is a top exporter of minerals and copper.
The latest data out of Chile indicates that economic activity increased at an annualized rate of 5.7% during the third quarter. A moderation in growth is expected due to a decline in exports because of the global economic slowdown……………………………………….Full Article: Source

Posted on 27 November 2012 by VRS |  Email |Print

Perhaps the most practical commodity sector, as many of its products enjoy inelastic demand around the world. As such, this segment has always been given a fair amount of investing attention.
Because there are so many different futures in the ag world, ETFs have become one of the most effective and popular ways to play this broad commodity sector. After enduring one of the worst droughts in U.S. history, agriculture ETFs are taking another hit as they have been trending downward since September……………………………………….Full Article: Source

Posted on 27 November 2012 by VRS |  Email |Print

Uranium has been hammered by the supply-and-demand cycle that affects all commodities, sending prices of the radioactive metal from $100 a pound five years ago to around $43 today. Yet the phase of declining prices for uranium appears set to change, which should fuel a heady rebound in both the underlying commodity and the ETFs that track it.
It’s easy to see why demand has been weak, particularly following last year’s Fukushima disaster in Japan that caused many countries to question their commitment to nuclear power………………………………………..Full Article: Source

Posted on 27 November 2012 by VRS |  Email |Print

The ETF world is set for another historic jump as the Chinese are eyeing gold funds on their local exchanges. As its gold market continues to grow, China is set to surpass India’s gold consumption this year, opening the opportunity for gold ETFs that have dominated U.S. exchanges.
The Shanghai Gold Exchange (SGE) also has plans to launch an interbank market in the next few weeks as demand for this precious metal continues to surge………………………………………..Full Article: Source

Posted on 27 November 2012 by VRS |  Email |Print

The Hong Kong Exchanges and Clearing’s (HKEx’s) recent £1.4bn purchase of the member owned London Metal Exchange (LME) certainly raised a few eyebrows. At 180 times trailing net income, it ranked as the most expensive of any bourse deal above $1bn since 2000, according to data compiled by Bloomberg.
However, the HKEx has no doubts that it was the right move. In one fell swoop this staid domestic player has been catapulted into the global league of exchanges. What now?……………………………………….Full Article: Source

Posted on 27 November 2012 by VRS |  Email |Print

The Commodity Futures Trading Commission on Monday sued the owner of the prediction market and betting website Intrade, alleging that the company allowed unauthorized trading by U.S. customers.
The civil suit, filed in U.S. District Court in Washington, D.C., said Intrade offered trading to U.S. customers on the future prices of commodities such as gold and crude oil despite a 2005 agreement not to offer trades on those and other items………………………………………..Full Article: Source

Posted on 27 November 2012 by VRS |  Email |Print

While Intrade is best known for offering a prediction market for gamblers to bet on the outcome of elections — and, as a byproduct, an ever-changing set of odds for who will win those elections — you don’t see that side of the business mentioned anywhere in the complaint. Instead, again and again, you find reference to Intrade letting U.S. residents gamble on things already under the coverage of financial markets and their regulators: commodity prices, market movements, economic data and so on.
That reflects the CFTC’s original 2005 complaint against Intrade, which focused on its offering of “commodity option contracts” and made specific mention of Intrade bets on gold and oil prices, currency exchange rates and interest rates………………………………………..Full Article: Source

Posted on 27 November 2012 by VRS |  Email |Print

Since September, the Currency Wars have escalated. It isn’t just because of the seminal monetary events of the Federal Reserve’s QE III “unlimited” and the ECB’s OMT “Uncapped”. It is highly likely, more about the fact that China announced its eleventh agreement that effectively bypasses using the US dollar with China’s strategic trading partners.
The latest agreement with Russia places trading oil, in non-US dollars, into the spotlight. The infamous petrodollar has had its destructive profile raised………………………………………..Full Article: Source

Posted on 27 November 2012 by VRS |  Email |Print

China blamed quantitative easing for damaging emerging economies and rejected Brazil’s proposal of using world trade rules to compensate for currency misalignments, during a debate at the WTO on Monday.
“We, together with many other countries, have been critics of this irresponsible and beggar-thy-neighbour policy,” China’s deputy permanent representative to the World Trade Organization, Zhu Hong, said, referring to the monetary stimulus policy often shortened to QE………………………………………..Full Article: Source

Posted on 27 November 2012 by VRS |  Email |Print

Currency markets retrenched as last week’s best performers suffered and haven currencies benefited from stronger demand.
The Swedish krona, the Norwegian krone and the euro were among the G10 winners last week versus the US dollar, each gaining more than 1.2 per cent against the dollar since November 19………………………………………..Full Article: Source

Posted on 27 November 2012 by VRS |  Email |Print

CO2 reduction attributed to growth in renewables, but greater dependence on coal threatens targets as nuclear is phased out. Germany has reduced its greenhouse gas emissions significantly in recent years as it has pushed forward a renewable agenda leading Europe into an age of wind and solar power.
In the past year, the country’s CO2 emissions fell by 2.4% compared with 2010, according to figures released by Germany’s Federal Environment Agency (UBA)………………………………………..Full Article: Source

Posted on 27 November 2012 by VRS |  Email |Print

Prime Minister Nguyen Tan Dung has approved a plan to manage greenhouse gas emissions and establish a carbon trading scheme. The carbon reduction plan is included in Viet Nam’s commitment to implement the United Nations Framework.
Convention on Climate Change and other international conventions on environmental protection adopted by Viet Nam. The plan is also part of work on developing a low-carbon economy for green and sustainable development………………………………………..Full Article: Source

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