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Commodities Briefing 12.Apr 2013

Posted on 12 April 2013 by VRS |  Email |Print

The world’s top oil forecasters this week all cut their 2013 oil demand forecasts due to subdued economic growth, with the figures showing increasing similarity in the views of producers and consumers.
The International Energy Agency (IEA) on Thursday trimmed its global oil demand growth estimate, which followed similar moves by the U.S. Energy Information Administration (EIA) and the Organization of the Petroleum Exporting Countries (OPEC). A growing resemblance in the outlook of the IEA, which represents 28 industrialised countries, and producer group OPEC contrasts with past disagreements……………………………………..Full Article: Source

Posted on 12 April 2013 by VRS |  Email |Print

U.S. oil demand is expected to trend lower in 2013 while China will account for much of the oil demand growth, OPEC said in its monthly report.
The Organization of Petroleum Exporting Countries said in its report for April that the U.S. economy was on the road to recovery. It said first quarter economic growth was around 2.5 percent to 3 percent. The cartel said, however, that the forecast for crude oil demand was uncertain because of budgetary concerns in the United States……………………………………..Full Article: Source

Posted on 12 April 2013 by VRS |  Email |Print

OPEC kept its world oil demand forecasts for 2012 and 2013 virtually unchanged yesterday, with China expected to contribute the most to growth while industrialized countries appeared to be headed for a decline.
The Organisation of Petroleum Exporting Countries (OPEC) expects world demand to reach 88.87 million barrels per day (mbpd) this year, slightly higher than its previous forecast in March of 88.83 mbpd……………………………………..Full Article: Source

Posted on 12 April 2013 by VRS |  Email |Print

The International Energy Agency has revised down its estimate of European oil demand for the second consecutive month and warned that the Cypriot bailout is weighing on the continent’s demand for oil.
“Every time the weakness of Europe’s economy or the severity of its debt crisis has hit the news, that has tended to translate into a small hit to oil consumption,” said Antoine Halff, head of the IEA’s oil markets division……………………………………..Full Article: Source

Posted on 12 April 2013 by VRS |  Email |Print

Changing oil market dynamics appear set to reduce the wide price differential between Brent crude oil and WTI that developed within the past few years, the Energy Information Administration said in its latest Short-Term Energy and Summer Fuels Outlook.
These global benchmark crude oil grades are also expected to generally decrease in price from the averages seen last year, while US natural gas prices move well above the historic lows recorded last April……………………………………..Full Article: Source

Posted on 12 April 2013 by VRS |  Email |Print

Saudi Arabia’s petroleum ministry foresees a bigger improvement in oil demand this year than the world’s three best-known forecasting agencies, including OPEC.
Saudi Arabia, OPEC’s largest producer, expects world demand to rise about 1 million barrels a day this year, and exceed 90 million barrels a day “for the first time in history,” Ibrahim al-Muhanna, an adviser to Saudi Oil Minister Ali al-Naimi, said yesterday in Kuwait……………………………………..Full Article: Source

Posted on 12 April 2013 by VRS |  Email |Print

Wall Street is unhappy with the performance of ExxonMobil’s share price. In the race of Big Oil share prices, Chevron is clearly winning. The discussion of relative share price performance is recently focusing on two things that distinguish the two oil giants. Unlike ExxonMobil, Chevron opted to stay out of Iraq and hasn’t yet purchased a US shale gas company. This begs the question: Who was right?
Wall Street is notorious for taking a short term, even quarterly, view. ExxonMobil has made a business out of taking the long view……………………………………..Full Article: Source

Posted on 12 April 2013 by VRS |  Email |Print

Deutsche Bank has downgraded its gold price forecast for 2013 by 12% to $1,637/oz; this compares with the average 2012 price of $1,669/oz; implying the first down year for gold since 2001. “Our new forecast for 2014 is $1,810/oz, down 5% from our previous estimate.” the Bank said in a report.
Deutsche Bank has meanwhile, upgraded its long-term price forecast for gold to $1,300/oz from $1,025/oz. The Bank has based this new estimate on the economics of gold production, specifically marginal production costs……………………………………..Full Article: Source

Posted on 12 April 2013 by VRS |  Email |Print

Despite global economic uncertainty, Goldman expects gold to fall to $1,450 an ounce by the end of 2013, and to $1,270 an ounce by the end of 2014. While major US equity indexes continue to push into uncharted territory, commodities have taken a backseat so far this year. As investors keep pouring into stocks and increasing their overall risk appetites, safe haven assets like gold have faltered.
Year-to-date, gold has dipped just over 7%, while the S&P 500 has jumped over 11% during the same time period……………………………………..Full Article: Source

Posted on 12 April 2013 by VRS |  Email |Print

If you want a lesson on how to manipulate gold prices, you need only look at what Goldman Sachs Group Inc. (NYSE: GS) has been doing over the past few months. Goldman set the table by predicting a turn in gold prices back in December 2012, which no doubt contributed to the precious metal’s 5% decline in the first two months of the year.
At the end of February, Goldman issued a research report that said the big Wall Street bank had soured on the yellow metal, and dropped its three-month target for gold prices from $1,825 an ounce to $1,615, its six-month forecast from $1,805 to $1,600, and its one-year outlook from $1,800 to $1,550……………………………………..Full Article: Source

Posted on 12 April 2013 by VRS |  Email |Print

Copper is a key manufacturing input, used in everything from electrical wiring to air conditioning units. The copper price has been stable within a range of $7,300-$8,600 per tonne over the past year. Copper prices are down by 8% since the start of 2013 to around $7,550 per tonne, down 25% from the record high in early 2011.
As the copper industry’s annual gathering in Chile ends we look at what is likely to happen to copper prices over the next few years……………………………………..Full Article: Source

Posted on 12 April 2013 by VRS |  Email |Print

Global apparent steel use will increase by 2.95% to 1,454 Mt in 2013, following growth of 1.2% in 2012, according to World Steel Association. In its Short Range Outlook for Steel in 2013-14, released on Thursday, worldsteel said that demand will grow further by 3.2% in 2014 to reach 1,500 Mt.
The worldsteel Economics Committee met 6-7 April 2013 in Dusseldorf, Germany. Commenting Hans Jürgen Kerkhoff, Chairman of the worldsteel Economics Committee said, “2012 was a challenging year for the steel industry with apparent steel use increasing at the slowest rate since 2009 when demand declined by -6.5%……………………………………..Full Article: Source

Posted on 12 April 2013 by VRS |  Email |Print

Asia-Pacific countries are the best-placed to supply the region’s future commodity demand, but rather than encouraging mining it appears they are making it harder for explorers and producers.
Virtually every key resource-rich nation in the region slipped in annual rankings compiled by the Fraser Institute, a Canadian-based free-market think-tank that surveyed 742 mining companies for its report, released in February. And it’s not just that Asian commodity producers slipped, the results showed that Indonesia was the worst mining jurisdiction, and was joined in the bottom 10 by Vietnam and the Philippines……………………………………..Full Article: Source

Posted on 12 April 2013 by VRS |  Email |Print

Indian investment demand in paper gold during the last financial year slowed to its lowest level since its launch in 2007, as falling prices and a decline in the precious metal’s safe-haven appeal damped investor appetite.
The assets under gold exchange-traded funds grew only 18% from a year earlier to 116.48 billion rupees ($2.14 billion) in the last financial year that ended March 31, despite a rise in the total number of schemes, data from the Association of Mutual Funds in India showed Thursday……………………………………..Full Article: Source

Posted on 12 April 2013 by VRS |  Email |Print

Tiberius, the Swiss investment manager known as a leading independent commodity specialist, has further enlarged its product offering by taking over the VCH Natural Resources Fund as of 1st April 2013.
The fund which has about USD 60 Million in assets will be embedded into the research platform of Tiberius and benefit from its strong fundamental analysis. The fund complements the product range which already includes long only, long/short and global macro products……………………………………..Full Article: Source

Posted on 12 April 2013 by VRS |  Email |Print

With investors flocking towards equity yields, Zenith is reminding investors that commodity trading advisers (CTA) could benefit them in the long term. In its 2013 CTA/Macro Sector findings, Zenith has said that CTAs are long gamma, which could be beneficial for long-term diversification.
“Medium-term CTAs have historically provided an offset at times of acute equity market stress,” Zenith head of alternatives Daniel Liptak said. “This observation is the likely cause of many investors believing that CTAs are long volatility, when in fact they are long gamma (they become more exposed to a trend as it becomes more pronounced, regardless of direction).”…………………………………….Full Article: Source

Posted on 12 April 2013 by VRS |  Email |Print

JPMorgan Chase & Co. (JPM), the largest U.S. bank by assets and the top investment bank by fees, is questioning the so-called universal bank model’s future.
Top-tier investment banks are “uninvestable at this point with a risk of spinoff from universal banks,” JPMorgan analysts led by London-based Kian Abouhossein wrote in a research note today. They cited potential rule changes and curbs on capital and funding……………………………………..Full Article: Source

Posted on 12 April 2013 by VRS |  Email |Print

Commodity market can create an additional five million jobs over the next five years if the liberalisation policies are continued, a top official of commodity exchange MCX said.
“5 million jobs can be created in next five years if liberalisation policies are continued and forward and backward linkages are improved further,” MCX Vice-Chairman Jignesh Shah said at a book launch ‘A Million Jobs and a Million more opportunities’……………………………………..Full Article: Source

Posted on 12 April 2013 by VRS |  Email |Print

Czech agricultural and food exports should focus in particular on fourteen countries outside of the EU, and ten countries of the Commonwealth of Independent States (CIS), Balkans and southeast Asia have a priority, according to the Agriculture Ministry’s new pro-export initiative.
Among the countries interesting for Czech agricultural and food exports are also the USA, Canada, Japan and South Korea. Over 90 percent of these exports now target EU countries. Within the project okayed by the ministry this year in January, all existing pro-export measures in trade in agricultural products are to be unified, linked and finetuned, said ministry spokesman Jan Zacek……………………………………..Full Article: Source

Posted on 12 April 2013 by VRS |  Email |Print

Small tribes have often used unique forms of money. Until recently, west Africa’s Ashanti had perhaps the oddest. Eschewing the convenience of metal discs, stones or shells, they used metal painstakingly moulded into the shape of small chairs, representing the tribal chief’s throne. But the latest cult currency—Bitcoin—is stranger still. Invented in 2009, this computerised money exists only as strings of digital code.
The Bitcoin tribe is still a small one, and consists mainly of computer geeks, drug-dealers, gold bugs and libertarians. But wild fluctuations in the value of a Bitcoin, from under $20 at the start of the year to over $200 at one point this week, has won the currency wider attention. The price may yet crash to earth. But whatever happens to Bitcoin, it shows how useful a widely accepted digital currency could be…………………………………….Full Article: Source

Posted on 12 April 2013 by VRS |  Email |Print

In 1999 an 18-year-old called Shawn Fanning changed the music industry for ever. He developed a service, Napster, that allowed individuals to swap music files with one another, instead of buying pricey compact discs from record labels. Lawsuits followed and in July 2001 Napster was shut down. But the idea lives on, in the form of BitTorrent and other peer-to-peer filesharers; the Napster brand is still used by a legal music-downloading service.
The story of Napster helps to explain the excitement about Bitcoin, a digital currency, that is based on similar technology. In January a unit of Bitcoin cost around $15 (Bitcoins can be broken down to eight decimal places for small transactions)……………………………………..Full Article: Source

Posted on 12 April 2013 by VRS |  Email |Print

Nascent carbon emissions-trading exchanges in several countries are increasingly looking at options to interlink with one another, which advocates say would offer investors long-term stability, increase revenues for the development of renewable energy and strengthen corporate support for climate policy.
Yet critics warn that so-called cap-and-trade systems are inefficient and create incentives for polluting industries to continue with business as usual. They also warn that the new systems in the United States are dependent on mechanisms that adversely impact on poor and indigenous communities in developing countries……………………………………..Full Article: Source

Posted on 12 April 2013 by VRS |  Email |Print

Emission credits issued by the United Nations increased 38 percent this month, Bloomberg reports. The surge came amid speculation that developers are buying up the contracts — which are sold by the UN in a bid to encourage investment in climate-friendly projects — to meet commitments with buyers to deliver offsets.
Certified Emission Reductions reached a 12-week high of 43 European cents ($0.56) in London on Monday but the contracts are still down 91 percent from a year ago due to an oversupply, Bloomberg says……………………………………..Full Article: Source

Posted on 12 April 2013 by VRS |  Email |Print

Ministers and lawmakers have ramped up pressure on MEPs in a last ditch attempt to persuade them to back a plan to rescue the EU’s carbon market, claiming if they vote down the Commission’s so-called backloading bill they would tear up European climate policy and damage industry.
Ministers from Germany, Britain, France, Italy, Sweden and Denmark have written to MEPs urging them to pass a bill on April 16 that will delay or backload the sale of hundreds of millions of carbon permits in the EU Emissions Trading Scheme (ETS)……………………………………..Full Article: Source

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