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Commodities Briefing 25.Jan 2013

Posted on 25 January 2013 by VRS |  Email |Print

Up to 233 billion barrels of oil has been discovered in the Australian outback that could be worth trillions of dollars, in a find that could turn the region into a new Saudi Arabia. The discovery in central Australia was reported by Linc Energy to the stock exchange and was based on two consultants reports, though it is not yet known how commercially viable it will be to access the oil.
The reports estimated the company’s 16 million acres of land in the Arckaringa Basin in South Australia contain between 133 billion and 233 billion barrels of shale oil trapped in the region’s rocks………………………………………..Full Article: Source

Posted on 25 January 2013 by VRS |  Email |Print

The Organization of Petroleum Exporting Countries will reduce shipments through to early February as late winter demand fails to materialize in Asia, according to tanker tracker Oil Movements.
The group that supplies about 40 percent of the world’s oil will export 23.7 million barrels a day in the four weeks to Feb. 9, down 150,000 barrels, or 0.6 percent, from the previous period, the researcher said today in an e-mailed report. Shipments normally climb at this time of the year with the last phase in winter demand in the northern hemisphere, according to the consultant. The figures exclude Angola and Ecuador………………………………………..Full Article: Source

Posted on 25 January 2013 by VRS |  Email |Print

Deutsche Bank has revised up its Chinese oil demand growth projection for the year to about 5% at 468000 bl/day in comparison to 392000 bl/day for the past year.
“Our China economists believe that key drivers of this year’s economic recovery will be corporate and infrastructure investments, which should prove positive for raw materials demand.” the Bank said in a report. Chinese oil demand ended the year on a high note as data for the final months of 2012 reflected a sharp recovery………………………………………..Full Article: Source

Posted on 25 January 2013 by VRS |  Email |Print

The coal industry has taken a beating in recent years. The discovery of natural gas in the U.S. has reduced the role of coal in the electric power industry: In 2012, the demand for coal has declined and coal companies, such as Arch Coal, have suffered from this drop in consumption. So, is it time to count out coal? I think this sentiment is premature.
During 2012, the consumption of coal in electric power industry declined compared to previous years: in the first nine months of 2012, total consumption reached 615 million short tons; during the same time in 2011, consumption reached 722 million short tons………………………………………..Full Article: Source

Posted on 25 January 2013 by VRS |  Email |Print

Gold will rally this year and into 2014 as U.S. Federal Reserve policy makers will probably maintain asset purchases for two more years to buttress the recovery of the largest economy, according to Morgan Stanley.
The metal, which rose for a 12th year in 2012, may average $1,830 an ounce in the final quarter from $1,715 in the first, $1,745 in the second and $1,800 in the third, analysts Peter Richardson and Joel Crane said in a report today. Prices will be supported by investment and central-bank buying, they wrote………………………………………..Full Article: Source

Posted on 25 January 2013 by VRS |  Email |Print

India’s $27 billion gold loan market is undergoing a shakeout, with the new norms being put in place by the stock market regulator and the apex bank. With gold demand from India rising from 462 tonnes in 2000 to an estimated 1,079 tonnes in 2012, both gold exchange traded funds and gold loans have come under the scanner.
The Securities and Exchange Board of India, the country’s stock market regulator, has proposed allowing gold exchange traded funds (ETFs) to park up to 20% of their gold holdings with commercial banks. The move aims to put the gold corpus of ETFs to productive use and help curb India’s huge gold imports………………………………………..Full Article: Source

Posted on 25 January 2013 by VRS |  Email |Print

Copper traders are bullish for a third consecutive week as the fastest expansion in Chinese manufacturing in two years boosts confidence that the biggest buyer of the metal is leading a global recovery.
Eleven analysts surveyed by Bloomberg expect prices to rise next week, six were bearish and a further five were neutral. ETF Securities Ltd. said $28 million went into its ETFS Physical Copper exchange-traded product last week, the most since its introduction in 2010………………………………………..Full Article: Source

Posted on 25 January 2013 by VRS |  Email |Print

2013 is shaping up to be an interesting a year for iron ore. As prices hit US$150/t in January – an 80% increase over the lows in September of last year – optimism briefly returned to the market. In the Pilbara, BHP Billiton’s Jimblebar expansion remains on track for first production in the March 2013 quarter and the company expects to reach a production rate of 183Mt in FY2013, up 5% from 2012.
Rio Tinto is targeting production of 290Mt by early 2014, compared to 253Mt in 2012. FMG has restarted the development of its Kings deposit and remains committed to reach 155Mtpy production this year………………………………………..Full Article: Source

Posted on 25 January 2013 by VRS |  Email |Print

Despite recent hiccups in gold prices, if you’re investing in commodities, it is still the best, safest bet, according to Morgan Stanley’s commodities team led by Hussein Allidina. Silver offers a little more risk and reward than gold; Allidina expects it to outperform gold in 2013.
The report also favors soybeans and corn as demand for them is accelerating faster than supply. However, the report warns commodities investors away from aluminum and sugar, two commodities that are acutely oversupplied at the moment………………………………………..Full Article: Source

Posted on 25 January 2013 by VRS |  Email |Print

China boosted imports of several premium agricultural commodities in 2012, as an emerging middle class and growing wealth in the country continues to guide a shift in consumer tastes.
Purchases of coffee, cocoa powder and olive oil by the world’s most populous nation all reached record levels last year………………………………………..Full Article: Source

Posted on 25 January 2013 by VRS |  Email |Print

Prices are expected to remain high this year for many major commodities, according to research from the US Department of Agriculture and the National Restaurant Association. NRA’s 2013 Restaurant Industry Forecast states that in 2012 higher food prices continued to squeeze operators’ bottom lines and they will likely increase again in 2013.
“After jumping 8.1 percent in 2011, the strongest annual increase in more than three decades, average wholesale food prices rose by more than 2 percent in 2012,” said Hudson Riehle, senior vice president of the association’s Research & Knowledge Group. “During the last six years, we’ve seen average wholesale food prices jump nearly 30 percent with the only decline – a 4 percent drop – occurring in 2009, so rising food costs have and will continue to be a challenge for restaurant operators.”……………………………………….Full Article: Source

Posted on 25 January 2013 by VRS |  Email |Print

The United States is becoming a global standout for rising commodity demand, which is likely a sign of underlying economic growth, the Financial Times reports. As the U.S. economy is picking up steam, it is pushing up demand for everything from copper to corn and crude oil, according to commodities traders interviewed by the Times.
“The U.S. is doing very nicely. Demand is up,” said one New York commodities executive………………………………………..Full Article: Source

Posted on 25 January 2013 by VRS |  Email |Print

The best currencies to invest in for 2013 come from Asia, South America, Australia - but not the United States. The Federal Reserve’s misguided insistence on a loose monetary policy, ongoing resistance to government spending cuts, and another increase in the U.S. debt ceiling will all conspire to boost inflationary pressures and restrain the value of the U.S. dollar.
That will, of course, impact domestic market performance and cut into real returns on dollar-denominated investments - but it will also provide major opportunities for U.S. investors who can target issues denominated in the strongest foreign currencies………………………………………..Full Article: Source

Posted on 25 January 2013 by VRS |  Email |Print

Price of a permit to emit a tonne of carbon fell to €2.81 after an EU vote against a proposal to support the struggling market. The European Union’s flagship climate policy, its emissions trading scheme (ETS), saw the price of carbon crash to a record low on Thursday after a vote in Brussels against a proposal to support the struggling market.
The price of a permit to emit a tonne of carbon dioxide fell 40% at one point to €2.81 today, far below its record high of €32, before recovering to more than €4 later in the day………………………………………..Full Article: Source

Posted on 25 January 2013 by VRS |  Email |Print

The collapse of Europe’s controversial market for carbon emissions rights is “an extremely serious” matter and an EU Comission proposal to freeze a related auction for 2013-2015 is simply a “patch” for the problem, a French economist warned lawmakers on Wednesday.
“We are in an extremely serious situation regarding the development of the European quotas market,” Christian de Pertuis told the French Senate’s finance commission in a hearing………………………………………..Full Article: Source

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