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Commodities Briefing 10.Jan 2013

Posted on 10 January 2013 by VRS |  Email |Print

The global oil sector is investing enough and there is sufficient oil supply, the head of the International Energy Agency said Wednesday and added that she hopes the high oil prices hampering economic recovery will fall. “The strange thing is that nobody can say the supply is not sufficient,” Maria van der Hoeven said. “I really do hope, but it’s a hope, that the prices will be adjusting in a different way.”
Except for a couple of months, Brent oil prices have been above $100 a barrel for two years, significantly increasing the bill for oil importers, while boosting the earnings of oil exporters. Organization of the Petroleum Exporting Countries’ oil-export revenues reached a record $1.1 trillion in 2011, according to the IEA………………………………………..Full Article: Source

Posted on 10 January 2013 by VRS |  Email |Print

OPEC had a relatively easy 2012 with oil prices holding above the $100/barrel mark despite a still fragile global economy. There were no major public disagreements over output policy between members, unlike in 2011 when the cartel’s June conference ended without an agreement on production levels and with Saudi Arabian oil minister Ali Naimi describing the meeting as the worst ever.
But the next couple of years could present some challenges to OPEC. One particular challenge will be the steep fall in US demand for imported oil, as highlighted on January 8 in the latest Short-Term Energy Outlook from the US Energy Information Administration, which is the statistics arm of the Department of Energy………………………………………..Full Article: Source

Posted on 10 January 2013 by VRS |  Email |Print

OPEC power will only be broken if the US and China cooperate in developing alternatives to oil for transportation. “The power of the OPEC cartel will only be broken if the US and China cooperate in developing alternatives to oil for transportation,” Institute for the Analysis of Global Security co-director Dr. Gal Luft said.
He said that this could be achieved by developing fuels based on natural gas and coal, such as methanol. “So long as the transportation industry is based on oil, OPEC will continue to sit in the driver’s seat of the global economy, no matter how much oil is produced in the world,” said Luft………………………………………..Full Article: Source

Posted on 10 January 2013 by VRS |  Email |Print

Moderate and slow recovery of the global economy will only allow for a modest increase in energy demand this year, the United Arab Emirates’ governor for the Organization of the Petroleum Exporting Countries said Wednesday.
“This modest economic growth will continue and will provide a little room for large increase in demand for energy. This year, the global oil market is expected to grow by just 800,000 barrels per day,” Ali Obaid al-Yabhouni said in a speech in Abu Dhabi. “The global demand is expected to grow by just 900,000 barrels per day….mainly from non-OECD countries,” he said………………………………………..Full Article: Source

Posted on 10 January 2013 by VRS |  Email |Print

About a decade ago, the theory of ‘peak oil’ stated that at some point in the near future, global oil production would peak, sending prices sky-high. But since then, the discovery of vast shale oil and gas reserves - many of them in the US - has led some to question whether that point has been pushed back, or indeed, will ever happen?
Seth Kleinman, Global Head of Energy Strategy at Citigroup, explained his view that peak oil theory has been “very much delayed”………………………………………..Full Article: Source

Posted on 10 January 2013 by VRS |  Email |Print

US oil production will jump by a quarter by 2014 to its highest level in 26 years, figures suggest. This is mainly because of the discovery of vast reserves of shale oil.
The Energy Information Administration (EIA) in the US also forecast average global oil prices would fall from $112 a barrel in 2012 to $99 in 2014. It said US oil imports would fall by a quarter between 2012 and 2014, because of rising domestic production and the discovery of shale gas………………………………………..Full Article: Source

Posted on 10 January 2013 by VRS |  Email |Print

The Middle East’s national oil companies appear to be facing significant challenges to their position in the global energy market.
The shale boom in North America, and the potential for another in China, are threatening to diminish the importance of Middle Eastern oil supplies. Indeed, the International Energy Agency is forecasting that the US will become the world’s largest oil producer within five years………………………………………..Full Article: Source

Posted on 10 January 2013 by VRS |  Email |Print

Thousands of investors betting on gold on hopes of a prolonged rally in the metal could be in for a disappointment this year. A healthy global economic outlook and stronger stock market prospects have taken some sheen off the metal. After returning 25-32 per cent a year from 2008 to 2011, gold could now turn volatile and even see a decline in prices, analysts said.
“Year 2013 looks to be a year of uncertainty and volatility for gold,” said Gnanasekar Thiagarajan, director at Commtrendz Research………………………………………..Full Article: Source

Posted on 10 January 2013 by VRS |  Email |Print

Gold may have over-reacted to minutes of the Federal Open Market Committee released last week and construed by markets to mean quantitative easing could wind down by year-end, said TD Securities in a commodity research note.
Gold fell on the news. The market may not stage a meaningful recovery in the short term with little U.S. economic data on the calendar this week and the Fed speakers scheduled to speak tending to be hawkish, they added………………………………………..Full Article: Source

Posted on 10 January 2013 by VRS |  Email |Print

China exerts a massive amount influence on commodity markets. It is said to account for 40 percent of base metal consumption and 23 percent of major agricultural commodities, according to an IMF working paper by Shaun Roache. It’s an even bigger market for commodities than the U.S.
Societe Generale’s head of commodities research, Michael Haigh writes, that the impact on gold was the most difficult to forecast. Their model suggests that a significant drop in Chinese PMIs (which they use as a proxy for a hard landing) would send gold prices surging 15 percent in the first quarter after a hardlanding to $1,963 per ounce. Gold he points out would be the only commodity to experience this initial rally. ……………………………………….Full Article: Source

Posted on 10 January 2013 by VRS |  Email |Print

The platinum group metals will be the best performer in the precious metals complex in 2013 as the supply deficit for the market continues to underpin the white metals, said a German investment bank on Tuesday.
Gold should have another positive year, but Deutsche Bank said in its commodities outlook that it is lowering its average price forecast following the lackluster impact of the Federal Reserve’s latest quantitative easing program and the possibility of the U.S. dollar firming. Also, it said, central banks will remain buyers of bullion, but they don’t anticipate an acceleration of buying in 2013………………………………………..Full Article: Source

Posted on 10 January 2013 by VRS |  Email |Print

The price of gold has been kept down by hedge fund redemptions. These redemptions will end in a week and after that a nasty hand that has been holding the price of gold down will be lifted. As we begin this new year news is starting to trickle out demonstrating that hedge funds as a whole have had a horrid performance last year.
According to incoming data nine out of 10 hedge funds failed to beat the S&P 500 last year. According to a recent report by Goldman Sachs their average return was 8% while the S&P 500 posted a 13% gain for 2012………………………………………..Full Article: Source

Posted on 10 January 2013 by VRS |  Email |Print

The recent sharp drop in gold price has caused the Asian physical demand to pick up. On Monday, the Shanghai Gold Exchange 99.99% purity gold contract’s trading volume jumped to a record high of 19,504.8kg. Chinese demand for gold generally rises before the Chinese New Year, which will begin on Feb 9.
According to the Hong Kong government, China imported 90.764 tonnes of gold in November, almost doubled from the 47.478 tonnes in October. Bloomberg calculated that during the first 11 months in 2012, gold shipments almost doubled from 392.564 tonnes a year ago to 720.091 tonnes………………………………………..Full Article: Source

Posted on 10 January 2013 by VRS |  Email |Print

Exchange traded funds give investors targeted exposure to areas of the commodities market, however, there are several risks that come with niche investing. “The widest-ranging commodities offerings lump together gold, natural gas, soybeans and other basic goods under the same ticker symbol. Then there are funds that focus on one major area of the sector, such as energy or agriculture,” Liam Plevin wrote for The WSJ.
ETFs also segment specialized areas of the commodity sector, giving an investor the option to invest in oil-services, platinum or livestock. The interest is there, as many of these funds have gathered over $1 million plus in assets………………………………………..Full Article: Source

Posted on 10 January 2013 by VRS |  Email |Print

Lyxor Asset Management has announced the launch of the Lyxor ETF MSCI ACWI Gold (GLDM), a new exchange-traded fund offering access to a global portfolio of gold mining and gold-related stocks. The ETF has been listed on the NYSE Euronext Paris and comes with a management fee of 0.50%.
The fund, which is based on a variation of the MSCI ACWI Gold Index, enables investors to gain exposure to the gold theme via mining companies whose fortunes are strongly tied to the price of the precious metal………………………………………..Full Article: Source

Posted on 10 January 2013 by VRS |  Email |Print

Tony Hall has set up Hall Commodities LLP with former colleague Arno Pilz five months after the pair left hedge fund Duet Commodities Fund Ltd.
Hall Commodities, based in London’s West End, the center of the capital’s hedge-fund industry, was incorporated on Dec. 10, according to filings with the U.K. Companies House. Hall and Pilz resigned from Duet in July. The fund started in July 2010, gaining 26 percent in 2011 before losing money in 2012, including nine of the 10 months to June………………………………………..Full Article: Source

Posted on 10 January 2013 by VRS |  Email |Print

As the European debt crisis shows no signs of ending experts are divided on whether the Eurozone is doomed or the project is viable, even if some of its member drop out of the euro. “The eurozone is headed for deeper, more intense, and much less retractable trouble in 2013. There is no foreseeable way for the region to recover as it exists today in its current form,” economic expert Margaret Bogenrief from ACM Partners said.
With Greece’s exit from the Eurozone looming and a lack of agreement between EU leaders on crisis fighting measures, the region’s economy was on the verge of collapse several times last year………………………………………..Full Article: Source

Posted on 10 January 2013 by VRS |  Email |Print

New Zealand commodity prices rose for a fifth straight month in December, led by a surge in pelt prices and gains for aluminium and beef, though a strong New Zealand dollar eroded the benefits to local producers.
The ANZ Commodity Price Index rose 1% in to be 7% up since July last year. The index is still 14% below its April 2011 peak. The NZD Commodity Price Index fell 0.1% “as the lift in the value of the kiwi dollar was greater than the rise in international commodity prices,” ANZ said………………………………………..Full Article: Source

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