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Commodities Briefing 15.May 2013

Posted on 15 May 2013 by VRS |  Email |Print

Major investors are sweeping their portfolios clear of commodities as they start to fret again that the Chinese economy could suffer a ‘hard landing’, hitting demand for the world’s raw materials.
Allocations to commodities among global fund managers have fallen to their lowest point in four-and-a-half years, according to a study of 231 money managers responsible for $661 billion worth of assets. One in four investors are now worried that a Chinese ‘hard landing’ is the greatest tail-risk – or known unknown – they face………………………………………Full Article: Source

Posted on 15 May 2013 by VRS |  Email |Print

Stocks are up because of rampant QE, which is squeezing investor flows out of bond markets and into equities. And the reason we’ve got rampant QE is the continued lack of near-term economic recovery globally, which is manifestly bad for industrial commodities.
Julian Jessop at Capital Economics notes that industrial metals are particularly sensitive to Chinese growth prospects and it seems noteworthy that Shanghai is one stock market that is not rising at present………………………………………..Full Article: Source

Posted on 15 May 2013 by VRS |  Email |Print

Once the darling of hedge funds, commodities are now looking like a poisoned chalice. Last year, hedge funds such as BlueGold, which specialized in crude oil; Centaurus, in natural gas; and Fortress Commodities, across all raw materials, shut down. Several commodities fund of funds also closed last year after clients fled.
Commodities trading, it seems – and in particular oil – is not for the faint of heart. The field is littered with failed ventures and prison sentences………………………………………Full Article: Source

Posted on 15 May 2013 by VRS |  Email |Print

Money managers are the most bearish on commodities in more than four years as a majority expected a weaker Chinese economy for the first time in 14 months, a Bank of America Corp. survey showed.
A net 29 percent of the fund managers surveyed were underweight the asset class in May as their positions “collapsed” to the lowest level since December 2008. One in four now consider a “hard landing” in China as the biggest risk to their investments. The bank surveyed professional investors who together oversee $517 billion………………………………………Full Article: Source

Posted on 15 May 2013 by VRS |  Email |Print

Prolonged low inflation has sent commodities allocations among fund managers to a four-year low, according to a new survey. A quarter of respondents to the Bank of America Merrill Lynch’s monthly poll on manager sentiment said a commodity collapse is the number one tail risk, an increase from 18% in April.
The panel of 231 managers, with a combined £432bn of assets under management worldwide, have responded to the perceived threat by reducing allocations to commodities and emerging markets and upping their weighting to bonds………………………………………Full Article: Source

Posted on 15 May 2013 by VRS |  Email |Print

European officials have begun investigating several big oil companies including Shell, BP and Norway’s Statoil over suspected attempts to manipulate global oil prices for more than a decade.
The European Commission said anti-trust officials had carried out unannounced inspections in three European countries on Tuesday………………………………………Full Article: Source

Posted on 15 May 2013 by VRS |  Email |Print

China will probably commission additional storage sites for its strategic petroleum reserve this year, boosting crude demand even as construction work on the program takes longer than expected, according to the International Energy Agency.
The nation, the world’s second-biggest crude consumer, will add 245 million barrels of capacity in the second phase of its emergency stockpile plan, the Paris-based IEA said in its Medium-Term Oil Market Report……………………………………..Full Article: Source

Posted on 15 May 2013 by VRS |  Email |Print

The US will account for a third of new oil supplies over the next five years, more than previously expected, according to the International Energy Agency, illustrating the impact of the shale revolution.
In its medium-term review of the oil market, the industrialised countries’ energy watchdog sharply raised its forecast for North American oil production from six months ago and slightly cut its forecast for capacity additions from the Opec oil cartel………………………………………Full Article: Source

Posted on 15 May 2013 by VRS |  Email |Print

The U.S. shale boom will send “shockwaves” through the global oil trade over the next five years, benefiting the nation’s refiners and displacing OPEC as the driver of supply growth, the IEA said.
North America will provide 40 percent of new supplies to 2018 through the development of light, tight oil and oil sands, while the contribution from the Organization of Petroleum Exporting Countries will slip to 30 percent, according to the International Energy Agency………………………………………Full Article: Source

Posted on 15 May 2013 by VRS |  Email |Print

Oil production from the Organization of the Petroleum Exporting Countries rose by 250,000 barrels per day in April from a month earlier to 30.5 million barrels per day, according to a Platts survey of OPEC and oil industry officials and analysts released Monday.
“The Platts estimate of OPEC production is about a million barrels per day more than what the International Energy Agency estimates is the output needed to keep supply and demand in balance,” said John Kingston, Platts global director of news, in a statement………………………………………Full Article: Source

Posted on 15 May 2013 by VRS |  Email |Print

Iran’s oil minister says the upcoming meeting of the Organization of the Petroleum Exporting Countries (OPEC) will mainly focus on the situation of the global oil market.
Rostam Qasemi said on Monday that the OPEC member states would also address the production ceiling of the organization during the meeting, which will be held later in May. The Iranian oil minister made the remarks on the sidelines of the 10th Iran Petrochemical Forum (IPF) in the capital, Tehran………………………………………Full Article: Source

Posted on 15 May 2013 by VRS |  Email |Print

Rising U.S. shale oil production will help meet most of the world’s new oil demand in the next five years, even if the global economy picks up steam, leaving little room for OPEC to lift output without risking lower prices, the West’s energy agency said.
The prediction by the International Energy Agency (IEA) came in its closely watched semi-annual report, which analyses mid-term global oil supply and demand trends………………………………………Full Article: Source

Posted on 15 May 2013 by VRS |  Email |Print

If Europe thought it had a crisis on its hands in the Eurozone, it’s nothing to the crisis a lack of oil would inflict. Thanks to the EU’s disastrous energy policies, while the world is proving to be awash with black gold in one form or another, Europe is fast losing the security of its oil supply.
And, just for good measure, a UK House of Lords report just published concludes that the EU will need a trillion euros of new investment if it is to stave off an energy crisis; investment its “muddled” policies are currently failing to attract………………………………………Full Article: Source

Posted on 15 May 2013 by VRS |  Email |Print

Jim Rogers recently said in an interview to Morningstar, that he is not disturbed by the recent tumble in gold prices. “Gold had gone up 12 years in a row, without a down year, which is extremely unusual in any asset. Equally important, gold has only had one 30% correction in 12 years.
Again, that is extremely unusual. Most things correct 30-40% every year or two. So the action in gold has been very unique and gold needed a correction. The main thing that caused it, as far as I am concerned, was that the market was ready. It needed it and it is good for gold to have a proper correction,” said Rogers. We agree. At the same time we would like to point out that this has no implications on the short term………………………………………Full Article: Source

Posted on 15 May 2013 by VRS |  Email |Print

Gold lost its sheen on the auspicious Akshaya Tritiya day by falling nearly Rs 400 but retail purchase got a boost with jewellers saying sales recording at least 15 percent growth.
Delhi, Mumbai and Coimbatore witnessed maximum buying on Akshaya Tritiya day, considered to be an auspicious day for buying gold and silver. Trading in Gold ETFs also rose by 14 percent to Rs 691 crore on NSE Monday………………………………………Full Article: Source

Posted on 15 May 2013 by VRS |  Email |Print

Are diamonds an investor’s best friend? The collapse of gold prices earlier this spring seems to have been met with a kind of muted elation from those promoting the idea that diamonds, like the precious metal, could become a recognized asset class and another form of haven investment.
It’s perfect timing for the diamond industry: With an exchange-traded fund backed by diamonds due to roll out sometime next year, once it has received the stamp of approval from the U.S. Securities & Exchange Commission, supporters of the idea admit that they need to educate investors in North America on the advantages of diamonds as investments………………………………………Full Article: Source

Posted on 15 May 2013 by VRS |  Email |Print

While gold has seen a decent rebound, silver and the mining shares (the more speculative side of the complex) have failed to sustain any rebound despite tremendously supportive sentiment amid an extreme oversold condition. Is the failure to rebound bearish? Not really.
This is a sector that is completely sold out but there are yet to be enough buyers to generate a sustained rebound. The combination of strength in conventional asset classes (stocks and bonds) and poor performance over the past two years is causing this sector to read like the heart rate monitor of a heart patient………………………………………Full Article: Source

Posted on 15 May 2013 by VRS |  Email |Print

The “mora” is one of many people’s currencies springing up in Spain as the economic crisis advances, inspired by old methods such as barter or time-banks. The mora has been around now for a year, and there are over 400 users throughout some 10 municipalities in the Sierra Norte de Madrid region. Several establishments have also signed up to accept payment in moras.
The moras system follows the Local Exchange Trading Scheme or LETS model that aims to reduce the negative consequences of globalisation in local economies………………………………………Full Article: Source

Posted on 15 May 2013 by VRS |  Email |Print

Here’s a very strange thing: Europe’s decades-long effort to reduce carbon emissions has been thrown into a shambles because utilities and manufacturers are exceeding their carbon-reduction targets. That’s right. Exceeding them. It almost sounds like a joke, but it’s not.
Europe’s $100 billion carbon market, an innovative force in the powerful carbon-reduction approach known as cap and trade, has ceased to function the way it’s supposed to. The resulting chaos in Europe’s energy and environmental policies is threatening carbon-reduction initiatives in Australia, Asia, and elsewhere………………………………………Full Article: Source

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