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Commodities Briefing 13.Dec 2012

Posted on 13 December 2012 by VRS |  Email |Print

Investment banks are cutting commodity staff for a second year and pay will probably drop for a third time as revenue declines, bonuses shrink and new regulations limit how much money traders can risk. Employees in commodity trading, sales and research at 10 top banks from Barclays Plc to UBS AG declined to 2,386 by September, from 2,612 at the end of 2011 and 2,777 a year before that, according to Coalition, a London-based research company.
Average compensation will retreat everywhere except Asia, said Tyler Jackson, the Singapore-based executive director of Options Group, which has recruited more than 10,000 financial-services workers over two decades………………………………………..Full Article: Source

Posted on 13 December 2012 by VRS |  Email |Print

If anybody is worried by the seeming weakness of China’s November trade data, then the commodity numbers should help reinforce the view that the recovery in the world’s number two economy is on track. Exports rose a disappointing 2.9% in November, well down on October’s 11.6% gain, while imports were flat versus October’s 2.4% rise.
For exports, there was probably a tailing off because Christmas orders were likely shipped in the prior two months, and the ongoing drag from recession in Europe and sluggish recovery in the US also would have been a factor………………………………………..Full Article: Source

Posted on 13 December 2012 by VRS |  Email |Print

Universe and criteria: 18 global commodities tracked by Bloomberg. The coffee “C” contract, the world benchmark for Arabica coffee, trades on the IntercontinentalExchange.
Worst Commodity: Coffee: -33%. “Abundant supply is the driving force in the market,” Claudio Oliveira, head of trading at Castlestone Management, told Bloomberg News. For example, Brazil, the largest coffee grower, has almost doubled its output in the past decade, producing another record crop this year………………………………………..Full Article: Source

Posted on 13 December 2012 by VRS |  Email |Print

Improving economic conditions in China and the US will increase demand by 865,000 barrels, agency forecasts. The International Energy Agency (IEA) has raised its estimates for oil demand next year but says soaring shale production in America should ensure there are no shortages in supply.
Improving economic conditions in China and the US is likely to result in about 865,000 barrels of extra crude demand during 2013, to reach total consumption to 90.5m barrels a day, according to the IEA’s latest oil report………………………………………..Full Article: Source

Posted on 13 December 2012 by VRS |  Email |Print

A new rivalry at the top of OPEC has emerged, pitting up-and-coming Iraq against undisputed oil cartel heavyweight Saudi Arabia. Having overtaken Iran as OPEC’s second biggest producer, a rejuvenated Iraq is beginning to worry Riyadh.
At Wednesday’s meeting of the Organization of the Petroleum Exporting Countries the opening salvos were fired in the struggle over who takes responsibility for cutting output if oil prices, comfortable for now at $109 (67.5 pounds) a barrel, start falling………………………………………..Full Article: Source

Posted on 13 December 2012 by VRS |  Email |Print

Opec, the oil producing cartel, has left its output target unchanged, despite concerns about oversupply in the market and soft oil demand as the global economy continues to show signs of weakness.
Ministers meeting in Vienna on Wednesday stuck with their ceiling of 30m barrels a day, which was set a year ago………………………………………..Full Article: Source

Posted on 13 December 2012 by VRS |  Email |Print

The U.S. is almost free of depending on imported energy and positioned to supplant Saudi Arabia as the world’s No. 1 producer of oil, whether crude costs $60 a barrel or twice that amount. Even if U.S. benchmark West Texas Intermediate oil drops 30 percent from the current $86 a barrel, oil companies will boost production as new technologies allow them to extract crude from so-called shale formations, said Ed Morse, the global head of commodities research at Citigroup Inc.
The nation, which was last self-sufficient when Harry S. Truman was president in 1952, met 83 percent of its energy needs in the first eight months of this year, according to the Energy Department in Washington………………………………………..Full Article: Source

Posted on 13 December 2012 by VRS |  Email |Print

UBS is retaining its forecast for gold to rise to an average price of $1,900 an ounce in 2013, the bank said. The bank’s 2013 silver forecast is $36.80 an ounce, not much different than UBS’ prior expectation of $36.90. UBS lowered its forecasts for platinum group metals, although it still looks for average prices to be higher than current levels.
Platinum is now expected to average $1,740 an ounce next year, compared to its previous forecast of $1,800. Palladium is seen at $780, compared to $825 previously………………………………………..Full Article: Source

Posted on 13 December 2012 by VRS |  Email |Print

“We have a six-month [gold price] target of $2,000 an ounce, but see scope as well for prices to rise to $2,400 an ounce by the end of 2014,” says the 2013 outlook from Bank of America Merrill Lynch metals strategists this morning, in contrast with the Goldman Sachs gold forecast for 2014 made last week.
“These targets reflect our view that the Fed will maintain mortgage purchases until the end of 2014 and will move to buy Treasuries following the end of Operation Twist in December 2012.”……………………………………….Full Article: Source

Posted on 13 December 2012 by VRS |  Email |Print

Most mainstream pundits seem to think the economy is recovering. The worriers can stop worrying, they say. The US has plenty of cheap oil. Unemployment levels are falling. The housing market is recovering. This is not time to buy gold, they say. The world is not going to end. You won’t need it.
All year long, we’ve heard analysts tell us that the bull market in gold was over. Most recently, Goldman Sachs’ top commodity man announced that gold will go down next year, as real interest rates once again turn positive………………………………………..Full Article: Source

Posted on 13 December 2012 by VRS |  Email |Print

We don’t often write on the gold market (unless it has to do with broader macroeconomic issues, industrial applications, or its role as a conflict mineral), but today something piqued our interest. Turns out South Africa gold mining is not nearly as lucrative — or safe — as it used to be.
Reuters reported that “gold production in South Africa has sharply declined in the last seven years, knocking Africa’s biggest economy off its perch as the world’s top bullion producer, a position it held throughout most of the 20th century.” That sounds like a pretty big deal………………………………………..Full Article: Source

Posted on 13 December 2012 by VRS |  Email |Print

We don’t often write on the gold market (unless it has to do with broader macroeconomic issues, industrial applications, or its role as a conflict mineral), but today something piqued our interest. Turns out South Africa gold mining is not nearly as lucrative — or safe — as it used to be.
Reuters reported that “gold production in South Africa has sharply declined in the last seven years, knocking Africa’s biggest economy off its perch as the world’s top bullion producer, a position it held throughout most of the 20th century.” That sounds like a pretty big deal………………………………………..Full Article: Source

Posted on 13 December 2012 by VRS |  Email |Print

Gold is holding above $1,700. And everyone says the economy is recovering. The worriers can stop worrying, say the pundits. The US has plenty of cheap oil. Unemployment is going down. Housing is going up. This is not the time to buy gold, they say. The world is not going to end. You won’t need it.
All year long, we’ve heard analysts tell us that the bull market in gold is over. Most recently Goldman’s top commodity man announced that gold will go down next year, as real interest rates once again turn positive………………………………………..Full Article: Source

Posted on 13 December 2012 by VRS |  Email |Print

A rise in the gold price to $2,000 an ounce by the end of 2013 and copper averaging $7,750/ton by Q4 that year are among the predictions of Francisco Blanch head of commodities research for Bank of America Merrill Lynch.
This is perhaps one of the more optimistic forecasts in a spate of reports from commodity analysts at major banks released at this time of the year – analyses which mostly, in the past, have tended to err on the conservative side………………………………………..Full Article: Source

Posted on 13 December 2012 by VRS |  Email |Print

Did the mining boom end in 2012, or didn’t it? Either way, the record prices are gone and the industry’s billionaire moguls stumbled. BHP Billiton and its chief executive Marius Kloppers also had a few hiccups during the year, but both retained number-one status at the end of 2012.
The year was tough for Australia’s resources companies - and anyone relying on them for income. The boom was declared over by federal Resources Minister Martin Ferguson and iron ore and coal prices crashed, hitting the major miners’ and the national bottom line………………………………………..Full Article: Source

Posted on 13 December 2012 by VRS |  Email |Print

Near the conclusion of each year, it is always interesting to examine the ETFs that have been the most successful gathering new assets. While funds with a larger asset base at the beginning of the year generally have an advantage over smaller sized funds, the metric is the best gauge of absolute ETF investor interest in a given year.
This year’s leaders list offers interesting data in terms of ETF usage trends. While many long-term ETF investors will be familiar with the majority of top performers, there are a few surprises………………………………………..Full Article: Source

Posted on 13 December 2012 by VRS |  Email |Print

The U.S. Commodity Futures Trading Commission defeated a federal court challenge to a rule requiring mutual funds with commodities investments to register with the agency.
U.S. District Judge Beryl Howell in Washington today rejected arguments by the U.S. Chamber of Commerce and the Investment Company Institute that the rule is unnecessary, and that the commission didn’t properly assess the costs and benefits when it approved the regulation in February………………………………………..Full Article: Source

Posted on 13 December 2012 by VRS |  Email |Print

Deutsche Bank will make steep staff cuts at its U.S. and European power and gas trading desks, with the departures of dozens of traders and its global head of commodities, David Silbert.
Several sources close to the situation said on Wednesday the bank was shrinking the workforce as part of an earlier announced plan to chop 1,500 positions in corporate banking to save billions of euros amid a profit slump due to the euro zone crisis……………………………………….Full Article: Source

Posted on 13 December 2012 by VRS |  Email |Print

With the euro zone debt crisis is far from over, a new strategy has been put forward to alleviate the strain currently faced by households and consumers across the continent. Consultancy firm Strategic Decisions Groupis urging Europe’s leaders to adopt a dual currency approach as an alternative to the greater fiscal integration that is currently being discussed at EU summits.
Managing director of its Europe and Middle East arm, Mazen Skaf, says that struggling countries should be given the flexibility to introduce national currencies alongside the euro………………………………………..Full Article: Source

Posted on 13 December 2012 by VRS |  Email |Print

There’s always a difference in the markets between “de facto” (”in practice”) and “de jure” (”in law”), and recent announcements regarding international reserve currencies would seem to reflect that difference.
Word came out in mid-November that the IMF is likely to reclassify the Australian dollar and Canadian dollar as “official” reserve currencies. While this is indeed a significant development, it seems more a reflection of reality than a major prospective change………………………………………..Full Article: Source

Posted on 13 December 2012 by VRS |  Email |Print

Deutsche Bank co-Chief Executive Officer Juergen Fitschen and Stefan Krause, the firm’s chief financial officer, are subjects of a tax probe involving the sale of carbon-emission certificates that led to five arrests and police raids on the lender’s Frankfurt offices.
Fitschen and Krause’s approval of value-added tax statements for 2009 is being reviewed by prosecutors, Deutsche Bank said today in an e-mailed statement. Any errors in the document were corrected in a timely manner, the bank said. Prosecutors say the correction was too late, the lender said………………………………………..Full Article: Source

Posted on 13 December 2012 by VRS |  Email |Print

Vietnam has been implementing a lot of CDM (clean development mechanism) projects with 164 projects recognized by the international community, ranking the fourth in the world.
The carbon market is seen as the major tool reducing CO2 emissions, one of the four kinds of gas that cause greenhouse effects. The market has been supported by the four main mechanisms stipulated in the Kyoto Protocol – the clean development mechanism (CDM), the joint implementation (JI) and Reducing Emissions from Deforestation and Forest Degradation (REDD)………………………………………..Full Article: Source

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