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Commodities Briefing 26.Feb 2013

Posted on 26 February 2013 by VRS |  Email |Print

A weaker than expected China growth number and finality on the Italian election is giving commodities new life. The market is rebounding on the thought that despite the efforts of Wen Jiabao to slow the housing market in China, perhaps not all economic stimuli will fall to the wayside.
Oil imports into China jumped 7.5 percent over one year ago levels. China’s manufacturing growth hit a four-month low in February, HSBC PMI hit 50.4 for the month, down from a final 52.3 in January. The figure was seasonally adjusted to take account of the Lunar New Year holiday that fell in the middle of the month………………………………………..Full Article: Source

Posted on 26 February 2013 by VRS |  Email |Print

As the price of oil fluctuates, the price of gasoline prices at the pump will also fluctuate. Given the numerous factors affecting global supply and demand for oil, the price of gasoline should be expected to continue the meaningful volatility observed in 2012.
The Organization of the Petroleum Exporting Countries currently consists of 12 countries. Saudi Arabia, with oil production of approximately 8.8 million barrels per day, is the leading oil-producing country in OPEC. OPEC was initially formed in September 1960 and is currently headquartered in Vienna, Austria………………………………………..Full Article: Source

Posted on 26 February 2013 by VRS |  Email |Print

BNP Paribas expects the price of crude oil to be broadly unchanged on-year through 2014, but with wild swings likely in mid-year as the Organization of the Petroleum Exporting Countries makes moves to balance the market in the face of U.S. supply growth. In its first forecasts for 2014, published Monday, BNP Paribas said it expects supply-demand challenges to balance each other out and financial conditions to become less supportive of any material move higher in the price of crude.
But as bottlenecks ease in the U.S., and the price-supportive environment afforded by a weak dollar and loose monetary policy reverse with economic improvement, OPEC is likely to respond with supply cuts in order to defend a price floor commensurate with the financial needs of its Gulf member states………………………………………..Full Article: Source

Posted on 26 February 2013 by VRS |  Email |Print

The price of natural gas (short-term delivery) changed direction and rose last week. Based on the recent EIA report, the withdrawal from storage was close to the five-year average withdrawal. This news may have contributed to the rally in natural gas prices by the end of the previous week. Following the change in direction of the price of natural gas, will it continue to rally?
During the previous week, the future price of Henry Hub (short-term delivery) rallied by 4.38%. Moreover, United States Natural Gas (UNG) also increased by 3.3%………………………………………..Full Article: Source

Posted on 26 February 2013 by VRS |  Email |Print

China, primed by government spending to boost growth, will need enough copper every month to circle the globe more than 100 times. The nation required 4.2 million kilometers (2.6 million miles) of copper cables in December, the most in nine months, to satisfy demand for electric grids, housing, autos and exports.
That’s enough to go around the 40,075-kilometer equator about 105 times. Manufacturing and exports are growing at the fastest pace in two years, while cars are selling like never before in China, the world’s most-populated country and responsible for about 40 percent of world copper consumption………………………………………..Full Article: Source

Posted on 26 February 2013 by VRS |  Email |Print

With gold prices falling, investors are struggling with the question of whether the decline is a temporary lapse in an ongoing bull market or a sign of more trouble to come. In 2011, gold rose above $1,900 per ounce. As of Friday afternoon, it was trading at $1,575. In the last month alone, gold prices have slipped by 6.8 percent. Even with the recent dip, however, gold is still up 67 percent over the past five years.
Gold’s recent decline has a number of root causes. For starters, investors are slowly regaining confidence in the stock market. Gold prices, by contrast, tend to rise when investors are feeling bearish about stocks………………………………………..Full Article: Source

Posted on 26 February 2013 by VRS |  Email |Print

Russia and Kazakhstan expanded gold reserves for a fourth straight month in January, while Azerbaijan acquired bullion for the first time in more than three years, as central banks sought to diversify their assets.
Russian holdings climbed 12.2 metric tons to 970 tons last month after gaining 8.5 percent over 2012, according to International Monetary Fund data. Kazakhstan’s hoard grew 1.5 tons to 116.8 tons, following last year’s 41 percent expansion, data on the IMF website showed. Azerbaijan’s holdings rose 1 ton, the first gain since May 2009, when it held 64 ounces………………………………………..Full Article: Source

Posted on 26 February 2013 by VRS |  Email |Print

Over the past five calendar years we have seen gold either complete an intermediate cyclical top or bottom in each February. My forecast was for February 2013 to be no different and for gold and silver to make trough lows this month.
With that said, I did not expect the drop in gold to go much below $1,620 per ounce at worst, but in fact it has. Where does that leave us now on the technical patterns and crowd behavioral views?……………………………………….Full Article: Source

Posted on 26 February 2013 by VRS |  Email |Print

In the last five years, we have seen the start of the decline of the developed world and the real impact of the economic rise of China on that world. What lies ahead? James Wolfensohn, the ex-president of the World Bank gave a short lecture recently in which he forecasts what the world’s cash flows would be like in 2030:
For the last century and far more, 80% of the world’s cash flowed to what we know as the developed world where 20% of the people lived. Twenty percent of the cash flow went to the underdeveloped world where 80% of the world’s population lived………………………………………..Full Article: Source

Posted on 26 February 2013 by VRS |  Email |Print

Gold’s price cycle has probably turned as the recovery in the U.S. economy gathers momentum and investment holdings collapse, according to Goldman Sachs Group Inc., which reduced forecasts for the metal.
The bank cut its three-month target to $1,615 an ounce from $1,825 and lowered the six- and 12-month forecasts to $1,600 and $1,550 from $1,805 and $1,800. Goldman reversed an assumption exchange-traded products holdings will expand in 2013, analysts Damien Courvalin and Jeffrey Currie wrote in a Feb. 25 report………………………………………..Full Article: Source

Posted on 26 February 2013 by VRS |  Email |Print

The day’s biggest mover was US platinum bar, dropping 2 percent to settle at $1,614 per ounce on Feb. 22, 2013. Japanese platinum bar fell 0.5 percent last Friday. Chinese platinum bar gained 0.3 percent. US palladium bar prices saw a 0.9 percent decline.
The price of Chinese palladium bar finished the market day up 0.6 percent per gram. The price of Japanese palladium bar remained essentially flat………………………………………..Full Article: Source

Posted on 26 February 2013 by VRS |  Email |Print

The worst of a turn bearish by hedge funds on agricultural commodities may be over after spreading into all major contracts – although, for a second week, being focused on corn and sugar derivatives. Managed money, a proxy for speculators, in the week to last Tuesday – unusually - cut its net long exposure to futures and options all 13 major grain, livestock, oilseed and soft commodity contracts monitored by Agrimoney.com.
The extent of the turn bearish was, in its extent, even worse than in the previous week, when cotton and soymeal saw improved net long positions – meaning long holdings, which benefit when prices rise, outnumber short bets, which profit when values fall………………………………………..Full Article: Source

Posted on 26 February 2013 by VRS |  Email |Print

Morgan Stanley today announced the launch of a new fund, the MS Discretionary Plus UCITS Fund, under its FundLogic Alternatives plc umbrella. The fund, which provides exposure to the Mesirow Absolute Return Plus Strategy, is the last in a series of four CTA strategies to be made available in a UCITS format through Morgan Stanley’s partnership with Equinox Fund Management LLC, a U.S.-based multi-manager, specializing in constructing portfolios of multiple Commodity Trading Advisor programs.
This latest addition diversifies Morgan Stanley’s offering of CTA strategies, which currently comprises of a fully transparent and systematic strategy providing exposure to the broad class of managed futures, a short to medium-term pattern recognition program and a long-term trend following program………………………………………..Full Article: Source

Posted on 26 February 2013 by VRS |  Email |Print

If you were expecting calm in the currency markets this week after a rush of news over the past several days, you’re likely to be disappointed.
For starters, the usual month-end round of economic reports is coming. “Friday is the big day with PMIs, flash euro area February inflation, U.S .auto sales and January personal consumption and income figures,” says Marc Chandler, chief currency strategist at Brown Brothers Harriman………………………………………..Full Article: Source

Posted on 26 February 2013 by VRS |  Email |Print

Before any British citizens start complaining about global warming, they really ought to stop in gratitude for the last episode: The retreat of the glaciers flooded what is now the North Sea basin and filled the English Channel.
Their history since William the Conqueror has had a one-way flow of invading armies; without climage change, the Brits might be speaking French and having to contend with someone else’s dysfunctional and occasionally disrobed royal family………………………………………..Full Article: Source

Posted on 26 February 2013 by VRS |  Email |Print

Despite continued rising demand pressures from emerging markets, many natural resources still operate on a cyclical bias. For example, natural gas demand and prices generally rise in the winter as more people begin to heat their homes. Conversely, when the weather is warmer, natural gas supplies build and prices drop.
Aside from natural gas, sugar has presented some of the most cyclical returns in recent years. For investors looking for a quick trade or perhaps those waiting for the right time to build a long-term position, now could be your chance………………………………………..Full Article: Source

Posted on 26 February 2013 by VRS |  Email |Print

Germany’s carbon dioxide emissions from industry and power stations in 2012 stood at 450 million tonnes, unchanged from the previous year, the Federal Environment Agency (UBA) said on Monday.
UBA president Jochen Flasbarth told Reuters the volume was virtually the same because a higher rate of coal-burning in power generation plants was offset by lower industrial CO2 emissions due to an economic slowdown in the euro zone………………………………………..Full Article: Source

Posted on 26 February 2013 by VRS |  Email |Print

Businesses in California paid slightly more than expected during the state’s second carbon auction, with emissions permits for this year selling at $13.62 (£8.99) per metric tonne.
California’s Air Resources Board on Friday confirmed that all of the nearly 13 million 2013 carbon permits sold at $2.91 above the $10.71 reserve price. Analysts said the results suggested the world’s second-largest carbon market is in rude health………………………………………..Full Article: Source

Posted on 26 February 2013 by VRS |  Email |Print

Go through any household in a western industrialized nation and chances are good you’ll find at least one product that reads: “Designed in the USA. Assembled in China.” But how does this impact global CO2 emissions and climate negotiations?
When measuring the CO2 emissions of countries, a lot of attention is focused on the CO2 directly emitted by each country. However, the emissions associated with consuming products that are manufactured elsewhere is rarely taken into consideration. This concept is referred to as “carbon leakage” as carbon dioxide is not accounted for in the country of consumption, but leaked to the country of production………………………………………..Full Article: Source

Posted on 26 February 2013 by VRS |  Email |Print

A downturn in China’s investment cycle could push down global prices for some commodities, such as iron ore, by up to 12%, according to new study by Standard & Poor’s Ratings Services (S&P).
In a study entitled “The Investment Overhang: If China’s Investments Dip, Commodity Prices May Slip” released on Feb 25, S&P found a strong correlation between movements in China’s investment-to-GDP ratio and prices for commodities such as iron ore and coal………………………………………..Full Article: Source

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