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Commodities Briefing 24.Apr 2013

Posted on 24 April 2013 by VRS |  Email |Print

And so another day’s trading begins in the “pit”, or floor, of the New York Mercantile Exchange, the home of the city’s energy and metal trading in downtown Manhattan.
The number of traders on the floor is a far cry from what it was 10 years ago, with the advent of electronic trading meaning more and more people now trade from offices or even the luxury of their own homes………………………………………..Full Article: Source

Posted on 24 April 2013 by VRS |  Email |Print

Commodities are cyclical. In fact the price of natural resources has fallen in real terms over the long haul since the beginning of recorded price history. Commodities have actually fallen after adjusting for inflation over their lifetime.
This adage is often not appreciated by many because they assume commodities are an inflation hedge. So unless “this time is different” we should expect commodities to mean revert or fall in price from recent year’s elevated levels………………………………………..Full Article: Source

Posted on 24 April 2013 by VRS |  Email |Print

Commodity prices, on average, are down about 15%-20% from their all-time highs two years ago, but they remain very high relative to their 2001 lows.
The recent weakness in commodity prices could be explained by slower economic growth here and in places like China, but commodity prices are not weak enough to point to any monetary policy errors (i.e., deflationary risk)………………………………………..Full Article: Source

Posted on 24 April 2013 by VRS |  Email |Print

Sweeping political and economic changes over the last half century have set the stage for Africa’s emergence as a global economic power, and the continent should take advantage of that opportunity through a commodity-based industrialization strategy, according to United Nations economic report.
“Massive industrialization based on commodities in Africa is imperative, possible, and beneficial”, states the 2013 edition of the Economic report on Africa, co-authored by the United Nations Economic Commission for Africa (ECA) and the African Union and launched at an event at the UN’s New York Headquarters this afternoon………………………………………..Full Article: Source

Posted on 24 April 2013 by VRS |  Email |Print

Brent crude fell below $100 a barrel on Tuesday after manufacturing data from China pointed to a lukewarm recovery in the second quarter, denting the outlook for fuel demand in the world’s second largest oil consumer.
The flash HSBC Purchasing Managers’ Index for April fell to 50.5 in April from 51.6 the month before as new export orders shrank in China, suggesting the country faces considerable headwinds………………………………………..Full Article: Source

Posted on 24 April 2013 by VRS |  Email |Print

Iran is currently negotiating with members of the Organization of Petroleum Exporting Countries to maintain oil prices around $100 in international markets, Iranian oil ministry spokesman Alireza Nikzad stated on Tuesday.
Iran considers the logical price of crude to be around $100 to $120 a barrel, the Mehr News Agency quoted him as saying………………………………………..Full Article: Source

Posted on 24 April 2013 by VRS |  Email |Print

Crude oil prices at “roughly” $100/barrel are required for future upstream investments in unconventional oil production as well as for the sustainability of producer governments, Xavier Preel, vice president for Middle East E&P at France’s Total, said Tuesday.
Speaking at the Middle East Petroleum and Gas Conference in Abu Dhabi, Preel said that without the relatively high oil prices since 2005, upstream investment would not have seen the “fivefold increase” that has happened. “Without those prices, we would not be where we are today.”……………………………………….Full Article: Source

Posted on 24 April 2013 by VRS |  Email |Print

Describing the current demand supply patterns in the world oil market as well-balanced, United Arab Emirates’ (UAE’s) Energy Minister Suhail Al-Mazroui said there is no need for OPEC countries to increase production, Xinhua news agency reported citing a local media report.
Delivering a keynote speech at the opening of the two-day annual Middle East Petroleum and Gas Conference in Abu Dhabi on Monday, Al-Mazroui said that despite rising energy demand in emerging markets in East Asia in particular, many OPEC exporting nations will not be able to increase their oil production, news agency WAM reported………………………………………..Full Article: Source

Posted on 24 April 2013 by VRS |  Email |Print

The collapse in the price of gold has surprised many investors, but it really shouldn’t be for those who know their financial history.
Gold closed at an all-time high of $1,895 on Sept. 5, 2011. While it had dropped to $1,690 a year later, an upward swing caused many to predict that gold was again on the rise. Those predictions and the almost uninterrupted rally since 2002, when the precious metal was trading below $300, drove investor interest in gold………………………………………..Full Article: Source

Posted on 24 April 2013 by VRS |  Email |Print

Killian Charles, an analyst with Industrial Alliance in Montreal, isn’t too concerned if the gold price hits $1,300 an ounce or even $1,000. He’s more concerned with the gold breaking point. How low can the gold price go without breaking a project? Investors will be surprised to know that a wealth of junior miners are lean and mean enough to survive a pint-sized gold price.
Charles talks with The Gold Report about which companies have resized and redesigned their projects to make it in this unforgiving market. There’s an unspoken belief that, when you invest in a junior mining company, you’re essentially buying a portion of the deposit………………………………………..Full Article: Source

Posted on 24 April 2013 by VRS |  Email |Print

Gold prices are expected to end 2013 at $1,450-1,550 per ounce, only partly recovering from a recent brutal selloff that shook investor confidence after 12 unbroken years of gains, a Reuters poll showed on Tuesday.
Most of the 29 banking analysts and consultants polled expected prices to stay above the $1,400 mark, finding support after the biggest two-day loss in 30 years sank gold to its lowest since early 2011 last week at around $1,321………………………………………..Full Article: Source

Posted on 24 April 2013 by VRS |  Email |Print

The recent run of the gold bears in financial markets has been positive for India’s current account balance. If this continues along with the persistent softness of oil prices, as many expect at least for the short term, it just might give the government the opportunity it needs to implement certain measures that have so far run against popular sentiment.
The plunge in the gold price since the start of the year, triggered by speculation and hints that the U.S. Federal Reserve may trim its bond-buying program sooner than markets had assumed, has helped the rupee hold up well against the dollar………………………………………..Full Article: Source

Posted on 24 April 2013 by VRS |  Email |Print

Société Générale S A became the fourth money center bank to mark down its 2013 gold target price following record outflows from gold ETPs.
Holdings of gold exchange-traded products sank 154 metric tons worldwide over the first quarter, the largest drop-off on record, according to analysts at Barclays Capital. By contrast, gold assets rose 71 tons in the year-ago quarter………………………………………..Full Article: Source

Posted on 24 April 2013 by VRS |  Email |Print

A week ago I wrote about a potential rebound after capitulation and panic selling in precious metals and the miners. It now appears Goldman Sachs (GS) is covering its short on gold as it rebounds above $1,400.
Meanwhile, many banks have helped confuse and misdirect the investment community out of gold (GLD) and silver (SLV). This was a classic shakeout and bear trap, which may start a major short covering rally………………………………………..Full Article: Source

Posted on 24 April 2013 by VRS |  Email |Print

Morgan Stanley Research cut its 2013 price outlooks for several base metals on Tuesday, citing a soft patch in global growth, which is being exacerbated by extended destocking in China and the growth of new capacity.
It also lowered its outlook for silver and platinum in 2013, having already cut gold on April 16
The firm cut its 2013 aluminum price estimate to 90 cents per pound or $1,987 per tonne from $2,200 per tonne, citing high levels of smelting production in China and LME stocks of the metal………………………………………..Full Article: Source

Posted on 24 April 2013 by VRS |  Email |Print

The only thing that investors have heard recently about the copper market is that there is vast oversupply ahead as evidenced by a buildup in copper warehouse inventories globally.
Inventories at LME (London Metals Exchange) warehouses have risen in excess of 190% since October alone. Inventories are now at levels not seen since 2003 at more than 590,000 tons………………………………………..Full Article: Source

Posted on 24 April 2013 by VRS |  Email |Print

Indian-dedicated funds and ETFs have sold shares worth $1.2 billion during the March quarter as concerns mount over implementation of reforms amid lingering political uncertainty. The funds and ETFs, which sold the shares, include the likes of HSBC, Fidelity, JPMorgan, Lyxor, WisdomTree and iShares, data from US-based global fund tracker Morningstar shows.
The benchmark index Sensex fell over 3.5% during this period, despite foreign institutional investors (FII), which can access Indian stock markets, having pumped close to $10 billion into Indian equities………………………………………..Full Article: Source

Posted on 24 April 2013 by VRS |  Email |Print

A Scottish currency – let’s call it a Scotdollar – would be a simple solution. Royal Bank of Scotland, Bank of Scotland and Clydesdale already print their own notes, so a switch in name and letting it float against other currencies would not be much of a leap.
But as Iceland has discovered, currencies belonging to small countries can rise and fall with alarming regularity, causing havoc for exporters. And pain comes with a fall. A decline in the value of the Scotdollar would push up the cost of imports and send inflation soaring. Businesses would say they could not plan with such uncertainty………………………………………..Full Article: Source

Posted on 24 April 2013 by VRS |  Email |Print

On April 12, Cyprus was at the top of the agenda for European Union finance ministers meeting in Dublin to discuss aid for struggling EU members. The EU finance ministers confirmed that 10 billion euros will be provided to Cyprus by the EU and the International Monetary Fund. The ministers also rejected reports that the country would be granted more financial assistance.
Cypriot presidential spokesman, Christos Stylianides said that the country was not seeking more aid under the bailout programme, but was instead seeking assistance through other European support mechanisms, as noted by the BBC………………………………………..Full Article: Source

Posted on 24 April 2013 by VRS |  Email |Print

The fate of Europe’s struggling carbon market could be decided by a second vote on proposed reforms, according to the EU’s top climate officials.
Speaking at a meeting of Environment Ministers hosted by the Irish Government, holders of the revolving presidency, Ireland’s Environment Minister Phil Hogan said it was time for people to decide if they wanted the Emissions Trading Scheme (ETS) or not………………………………………..Full Article: Source

Posted on 24 April 2013 by VRS |  Email |Print

Power companies are demanding the federal opposition rethink its “direct action’’ plan for reducing carbon emissions, warning that its company baseline approach could be more difficult to operate than Labor’s trading scheme.
The Energy Supply Association of Australia said falling demand for power meant the Coalition must review its energy and climate change policy if it gains power at the September 14 federal election………………………………………..Full Article: Source

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