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Commodities Briefing 05.Dec 2012

Posted on 05 December 2012 by VRS |  Email |Print

Derivatives regulators from major trading centres promised on Tuesday to minimise cross-border clashes over their new rules to rein in risks in the $640 trillion sector and give industry extra time to adjust.
World leaders agreed in 2009 to increase transparency by requiring swaps contracts to be recorded, cleared and traded on electronic platforms by the end of this month, but not all countries are ready………………………………………..Full Article: Source

Posted on 05 December 2012 by VRS |  Email |Print

The Swiss cabinet on Monday rejected a motion that would force mining companies and private commodity trading houses to declare payments made to resource-rich countries.
The decision puts the traditionally neutral country at odds with the United States and the European Union, both of which are pursuing tough new rules for oil, gas and mining companies aimed at reducing corruption………………………………………..Full Article: Source

Posted on 05 December 2012 by VRS |  Email |Print

OPEC will probably keep its output quota unchanged for a second successive meeting next week as members judge prices high enough to cover their spending needs, according to a Bloomberg survey.
All 17 analysts in the survey conducted from Nov. 29 through yesterday said there will be no change to the collective ceiling of 30 million barrels a day agreed on almost a year ago………………………………………..Full Article: Source

Posted on 05 December 2012 by VRS |  Email |Print

Pop quiz: When is the next OPEC meeting? You may be excused for drawing a blank.If you care to put it in your holiday season calendar, the next meeting of the Organization of Petroleum Exporting Countries is Dec. 12. Yet the gathering is eliciting the attention of few.
The institution that could once instill fear in oil markets with mere whispers is now lucky to elicit a polite yawn when delegates from its 12 member states assemble in the festive city of Vienna………………………………………..Full Article: Source

Posted on 05 December 2012 by VRS |  Email |Print

During November, the price of oil has only slightly rose despite its high volatility. The recent tensions in the Middle East may have contributed to the rise in volatility in oil prices. Will oil prices continue to rise in the weeks to follow or will it come down to the low 80s?
Let’s examine the recent changes in the oil market, review how the price of oil may have affected oil companies, and try and figure what’s next for oil in the weeks to come………………………………………..Full Article: Source

Posted on 05 December 2012 by VRS |  Email |Print

It is less than a month to bid farewell to the chaotic 2012 and enter 2013, which is expected to be relatively calmer for the oil market, also a chief driver of the world economy.
The recent slightly lower revision of the global crude price projections by various global forecasters is predominantly backed by the indication of slowing demand growth, while some improvements in the supply prospects………………………………………..Full Article: Source

Posted on 05 December 2012 by VRS |  Email |Print

Asia could account for up to 90 per cent of oil exports from the Middle East in the future, said the International Energy Agency (IEA). The agency said that it expects energy trade between the Middle East and Asia to grow in years to come as the US moves towards energy self-sufficiency.
US consumers and industrial end-users have been able to enjoy relatively cheap energy on the back of increasing oil and gas production as well as energy efficiency standards in the US………………………………………..Full Article: Source

Posted on 05 December 2012 by VRS |  Email |Print

World Gold Council’s India office believes Indian demand for gold bullion in 2012 will end up reaching approximately 800 metric tons, a substantial increase from earlier estimates of 650–750 tons.
While India’s government has been trying several tactics to reduce gold bullion imports, the earlier drop in demand has not led to a sustained decline for gold prices. According to Cekerevac, in spite of lower than normal gold bullion demand by Indian buyers, gold prices are expected to remain extremely strong………………………………………..Full Article: Source

Posted on 05 December 2012 by VRS |  Email |Print

Gold analysts at the Certified Gold Exchange are projecting that gold will surpass its all time record high price of $1,920 per ounce in 2013 based on several economic factors that are strengthening gold’s fundamentals.
Gold is positioning itself to break past its all time record high price of $1,920 per ounce in 2013 as several economic factors continue to strengthen the precious metal’s fundamentals. The upcoming fiscal cliff, unstable US Dollar and rising safe-haven demand have caused many investors to shift away from dollar-backed assets in exchange for physical gold throughout 2012………………………………………..Full Article: Source

Posted on 05 December 2012 by VRS |  Email |Print

Gold hasn’t been trading like a safe haven lately, leaving investors to wonder whether it still is one. “The volatility that the price of gold has seen lately gives the illusion that it is not a safe haven, but in reality investors still view it as a place to protect their wealth,” said David Beahm, vice president at precious-metals investment firm Blanchard & Co.
That’s tough to believe, however, given the steep drops the precious metal has suffered in recent sessions………………………………………..Full Article: Source

Posted on 05 December 2012 by VRS |  Email |Print

2001 and 2002 were turning points for gold, silver and crude oil prices. In 2001, gold prices began a trend in which the commodity mounted a rocket headed towards north; that rocket is still being propelled and viewed in the current light, gives one the impression that it is a rocket that would be fired for perpetuity.
Gold prices dating before 2000 had its share of ups and downs in contrast. Silver too began on an upward journey in 2002 along with crude oil. However, they had to retreat in 2009 as the economic slow-down bit………………………………………..Full Article: Source

Posted on 05 December 2012 by VRS |  Email |Print

Gold futures slumped to a four-week low as a stalemate in U.S. budget talks drove commodities lower. Silver, platinum and palladium also dropped. Twenty-two of 24 raw materials in the Standard & Poor’s GSCI Spot Index fell. Democrats and Republicans have four weeks left before more than $600 billion in tax increases and federal spending cuts are triggered.
If the so-called fiscal cliff isn’t averted, the U.S. will face a recession, according to the Congressional Budget Office………………………………………..Full Article: Source

Posted on 05 December 2012 by VRS |  Email |Print

I own gold and I own silver. I own all the precious metals, especially gold and silver. I’m not sure I would buy right now. Gold has gone up 12 years in a row, which is extremely unusual for any asset, at least in my experience. I don’t know any asset that’s gone up 12 years without a down year except gold. Gold has had only one decline over 30 percent in those 12 years. That, too, is extremely unusual.
Plus, if you look at the open interest from the CFTC, the speculators have been piling into gold. The number of call options is more than twice the put options. All the signs are that there’s too much speculation in gold right now………………………………………..Full Article: Source

Posted on 05 December 2012 by VRS |  Email |Print

“This is the definition of a silver shortage – nothing to do with the physical amount of the substance being in deficit, but people’s psychological intention not to sell. The extent to which a shortage is developing is witnessed by the extent of backwardation.”
That’s what Ned-Naylor Neyland wrote in a recent commentary (thanks to GATA for bringing it to our attention). He is the Investment Director at Cheviot Asset Management, one of the UK’s largest independently owned investment firms………………………………………..Full Article: Source

Posted on 05 December 2012 by VRS |  Email |Print

If you invest in any commodity ETF that tracks futures contracts instead of the actual commodity itself, you have to watch the contango.
Case in point: Take a look at two ETFs that trade oil futures contracts - the US Oil Fund (USO), which tracks WTI (West Texas intermediate) crude oil and the US Brent Oil Fund (BNO), which tracks Brent crude oil………………………………………..Full Article: Source

Posted on 05 December 2012 by VRS |  Email |Print

Polish commodity exchange Towarowa Gielda Energii is nearly ready to launch a natural gas exchange, once a few minor regulatory requirements have been met, TGE chief executive Ireneusz Lazor said Tuesday.
However, people close to the market deregulation process say many suppliers and consumers in the local market remain reluctant to trade on the new platform………………………………………..Full Article: Source

Posted on 05 December 2012 by VRS |  Email |Print

The world’s first glass futures landed in Zhengzhou Commodity Exchange on Dec.3. The benchmark price of the first glass futures was 1420 yuan per ton. The contract prices tumbled as soon as the market opened, with the price of major contract 1305 falling 7.18 percent to 1319 yuan per ton.
The trading volume of all contract types varying in nine months totaled 720 thousand hands, among which the trading volume of major contract 1305 was nearly 700 thousand hands, accounting for 97 percent. The positions held were nearly 80 hands. All these mark an unusual trading condition of a new type of futures in the domestic market………………………………………..Full Article: Source

Posted on 05 December 2012 by VRS |  Email |Print

Standard Chartered aims to double revenue from its commodities business in the next four years, tapping its substantial emerging markets client base to strengthen its hand and opening a new trading office in China.
In a year that has seen European banks such as UBS and Natixis pull back from commodities, London-headquartered Standard Chartered has been taking advantage of its strong presence Asia and other fast-growing emerging markets to fill the gap……………………………………….Full Article: Source

Posted on 05 December 2012 by VRS |  Email |Print

An old joke in the commodities world was that futures traders never took holidays between the fifth and ninth business days of each month. Why? Because that is when money tracking commodity indices sell expiring futures contracts and replace them with new ones. Front-running the so-called “index roll” became a monthly meal ticket for active traders.
“I loved doing that,” a multibillion dollar commodity fund manager recently told me. “Those were the good old days.”……………………………………….Full Article: Source

Posted on 05 December 2012 by VRS |  Email |Print

Trade giants China and South Korea have agreed to utilise their currency swap valued at $59 billion to boost the use of yuan and won in bilateral trade, Seoul’s finance ministry and central bank said on Tuesday.
Central banks of the world’s largest and seventh largest exporters will begin lending trading firms yuan and won through banks from later this month for use in settling trade bills, the Ministry of Strategy and Finance and the Bank of Korea said in a joint statement………………………………………..Full Article: Source

Posted on 05 December 2012 by VRS |  Email |Print

Unfavorable foreign-exchange rates are marring the results of more big U.S. companies, as their expanding operations abroad expose them to the swings of a growing number of currencies beyond the euro and British pound.
But don’t expect those companies to hedge their currency risk more than they already do. That’s because hedging is costly and can damage results more if a company makes the wrong bet………………………………………..Full Article: Source

Posted on 05 December 2012 by VRS |  Email |Print

How’s this for a statistic: currency fluctuations resulted in $22.7 billion in aggregate losses during the third quarter for some of the biggest U.S.-based multinationals.
That’s the word from FiREapps, a provider of software that helps corporations manage their foreign currency exposure. Wolfgang Koester, the firm’s founder and chief executive says that while more and more corporate leaders are becoming cognizant of currency impacts, they remain myopic when it comes to considering just which currencies they need to worry about………………………………………..Full Article: Source

Posted on 05 December 2012 by VRS |  Email |Print

Global cotton output in 2013/14 may fall for the second consecutive season resulting in the smallest output in four years. .Lower cotton prices and increased attractiveness of competing crops will decrease the production of global cotton by 11% to 23.2 million tons, according to International Cotton Advisory committee (ICAC).
Production is expected to fall sharply in the United States and Turkey, where competition with grains and soybeans is strong. Smaller crops are also projected in China, Pakistan, Central Asia and Francophone Africa………………………………………..Full Article: Source

Posted on 05 December 2012 by VRS |  Email |Print

OECD says not curbing greenhouse gases will have disastrous impact on quality of life, particularly for people in poor countries. Green growth is the only way forward for rich and poor countries alike to achieve sustainable development because of tremendous economic and livelihood losses from severe climate change and the depletion of natural resources, a thinktank said on Tuesday.
The Development Co-operation report 2012 by the Organisation for Economic Co-operation and Development (OECD) calls for radical changes to an economic model in which rapid growth has come at a price for the environment and many of the world’s poorest people………………………………………..Full Article: Source

Posted on 05 December 2012 by VRS |  Email |Print

Environmental Protection Administration (EPA) Deputy Minister Yeh Shin-cheng said Tuesday that carbon trading schemes are at the top of the priority list for Taiwanese observers at the U.N. climate summit (COP 18) in Doha, Qatar.
They are also keeping a close eye on progress regarding the Kyoto Protocol, the Green Climate Fund and the Cancun Agreement, Yeh said. A 54-member delegation that includes experts and officials from the Ministry of Foreign Affairs, Ministry of Economic Affairs, Ministry of Transportation and Communications and Council of Agriculture, which arrived in Doha Dec. 1, has participated in several meetings on the sidelines of the summit………………………………………..Full Article: Source

Posted on 05 December 2012 by VRS |  Email |Print

California carbon rose to the highest level in almost two months as more companies were seen trading allowances and on speculation that Edison International (EIX)’s San Onofre nuclear power plant will remain shut next year.
Futures based on California carbon allowances for 2013, the first year of compliance under the state’s cap-and-trade program, jumped 8.6 percent yesterday to $13.20 a metric ton, the most since Oct. 19, data compiled by CME Group Inc. (CME)’s Green Exchange show………………………………………..Full Article: Source

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